The object of this Bill is to facilitate the amalgamation of co-operative dairy societies, commonly known as creameries. The amendment was proposed by my colleague, the Minister for Agriculture and Fisheries, and I am sponsoring it as I am responsible for the administration of the relevant Acts.
The existing law tends to hinder amalgamations and I feel the time has come to amend it in order to simplify the process of amalgamation. This is necessary because the rationalisation and diversification of the creamery and milk processing industry is regarded by the Government as an essential and urgent aim of agricultural policy. This was indicated in the Third Programme for Economic and Social Development. The Minister for Agriculture and Fisheries has indicated that relatively few amalgamations of co-operative dairy societies have taken place over the past few years. Progress towards the rationalisation of the creamery industry has been much slower than had been hoped for. With the prospect of early accession to the European Economic Community, it is necessary that progress be expedited and it is expected that the proposed amendment will achieve this.
I should explain that co-operative dairy societies are industrial and provident societies, that is, societies which are registered under the Industrial and Provident Societies Act, 1893. Section 53 of that Act provides that two or more societies may amalgamate but only if each society passes a special resolution. Section 51 Paragraph (a) of that Act provides that a special resolution must be passed at a general meeting by not less than three-fourths of the members who vote, and paragraph (b) of the same section provides that the resolution must be confirmed at a subsequent general meeting by a majority of the members voting. Voting in either case may be in person or by proxy.
The purpose of this Bill is specifically to amend section 51 (a) of the Industrial and Provident Societies Act, 1893 to facilitate the passing of a special resolution for the amalgamation of co-operative dairy societies by a simple majority instead of by a mimimum three-fourths majority as at present.
The Minister for Agriculture and Fisheries has stated that the Irish Agricultural Organisation Society Limited and other farming organisations had emphasised to him that the passing of a resolution for amalgamation by the required minimum three-fourths majority had proved a serious factor in delaying the amalgamation of co-operative dairy societies and in the rationalisation of the creamery industry. These organisations support the proposed change to a simple majority requirement.
The Minister for Agriculture and Fisheries has told me that he accepts that the arguments made by the farming organisations are valid. He himself is aware of many instances where resolutions for amalgamation have been supported by a substantial majority of members at meetings. They have, however, not been passed because they did not get the required three-fourths majority. These instances have occurred particularly in Kilkenny and in the Golden Vale area of County Limerick and north Cork. It would be only in a few cases that all members of a co-operative dairy society would derive their living solely or mainly from farming. Consequently, in some cases it is a relatively easy matter to secure 25 per cent support, on various personal grounds, to oppose an amalgamation resolution. The result is that the real economic interests of the majority of members of such societies are not being realised. Further, agricultural development in accordance with the Government policy is being impeded.
I believe that amalgamations are desirable so that greater resources, both financial and other, would be available to the enlarged societies. This would enable them to achieve their aims more readily, and would be in the interests of the members and of the farming community generally.
I therefore agree fully with the Minister for Agriculture and Fisheries that, so far as co-operative dairy societies are concerned, it is urgently necessary that section 51 (a) of the Act of 1893 should be amended to enable a resolution for amalgamation to be passed by a simple majority.
I should like to make it quite clear that the proposed amendment will not change, in any way whatever, the present requirement for a confirmatory resolution as set out in paragraph (b) of section 51 of the Act, and it will not affect any other matters which, under the Industrial and Provident Societies Act, require the passing of a special resolution. For example, the amalgamation of registered societies, other than co-operative dairy societies, would still require the passing of a special resolution by a minimum three-fourths majority.
In conclusion, I should like to mention that this Bill passed all Stages recently in Dáil Éireann without adverse comment or opposition. I commend this Bill to the House.