Seanad Éireann debate -
Thursday, 26 Jul 1973

Vol. 75 No. 8

Private Business. - Dairy Produce (Miscellaneous Provisions) Bill, 1973: Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

Minister for Agriculture and Fisheries (Mr. Clinton)

This Bill provides for certain changes in connection with our exports of dairy products that have followed from our accession to the EEC and the adoption of the Community's agricultural system. Up to 1st February last most of our exports of dairy produce were handled by An Bord Bainne under what was in effect a statutory export monopoly. The board was established in 1961 by the Dairy Produce Marketing Act, 1961, and over the period since then it has been responsible for the development of our dairy produce exports. It has performed this task with considerable success and its Kerrygold brand has gained a first-class reputation for Irish dairy produce on world markets.

As I have said, the board had in effect a statutory export monopoly. Under EEC regulations, however, other persons could not be prohibited from exporting dairy produce, and so the fundamental basis of the statutory board had to be abandoned. To provide for the altered situation the dairy industry was encouraged by my predecessor in office and myself to get together and organise on co-operative lines to carry on the marketing functions previously carried on by the statutory board.

The dairy industry has responded by setting up a co-operative body—An Bord Bainne Co-operative Ltd. —and since 1st February this society has been engaged in the export marketing of much of our dairy products. A small number of co-operative societies have not yet committed themselves fully to the new society but I am hopeful that their reservations will be withdrawn and that the societies concerned will join with the great majority of Irish co-operative societies. It is only by operating as one large centralised exporting unit that we can make the most of the opportunities that EEC membership has opened for us in the dairy products sector. Only such a unit can command the necessary expertise and carry out promotional and marketing operations on the scale which is now required in international trading. Also such a large unit is best able to arrange for the development and production of new products, which is so essential if our farmers are to get the maximum return for their milk.

Under section 3 of the Bill before the House the new co-operative society is being helped to make a good start. This section transfers the assets and liabilities of the statutory Bord Bainne to the new society. The assets were built up entirely from the former levy on milk supplied to creameries. No Exchequer money is involved. Until the accounts of the statutory board have been finalised, it is not possible to indicate precisely the net value of the assets but it is estimated at not less that £2½ million. This sum is represented mainly by a majority holding in a British subsidiary, by an office block here in Dublin and by some cash.

The assets are really the property of Irish creamery suppliers and so it is only proper that they should be used to benefit milk producers generally. It is accordingly provided in section 4 that the assets transferred shall be used for the orderly marketing and distribution of dairy products for the benefit of the dairy industry. As a safeguard for producers it is provided that if the society wish to dispose of or use the assets for purposes other than those specified in this section the consent of the Minister for Agriculture and Fisheries must be obtained.

Section 5 provides for the dissolution of the statutory board. At the moment it is not possible to give a precise date for this as it will depend on such matters as the finalising and auditing of the board's accounts.

In section 6 provision is made for a State guarantee in respect of borrowings of up to £20 million by the new society. This is necessary as centralised exporting of dairy products involves the borrowing of very large sums to finance the purchase of dairy products from creameries and processing firms. Such borrowings by the statutory board have reached nearly £40 million at times and it is likely that the borrowing requirements of the new society will be even greater. Under the 1961 Act a guarantee in respect of borrowings of up to £5 million by the statutory board could be given by the Minister for Agriculture and Fisheries. To help the new society to build up the same reputation, confidence and borrowing power which the old board had, the Government have decided to guarantee borrowings by the society up to the total of £20 million which I have mentioned. This guarantee will be available up to the end of 1977, after which time the society should be able to borrow without State assistance. A statement giving particulars of any guarantees given under this section will have to be laid before each House of the Oireachtas each year.

Sections 7 and 9 provide for the staff of the statutory board. They ensure for the staff the same terms that previously applied to them, and make detailed provision for their superannuation rights. The society and the staff have agreed to the transfer arrangements.

In section 8 it is provided that 1973 shall not be a nomination year for the purposes of the Dairy Produce Marketing Act, 1961, under which Board Bainne was originally established. The term of office of the existing board members expires on 30th September but in view of the impending dissolution of the board there would be little point in implementing the elaborate procedure for electing new board members. Because of this it is proposed by section 8 to prolong the term of office of the existing members until the board is dissolved.

Under the 1961 Act the amount of the Exchequer grant to An Bord Bainne in any financial year must not exceed two-thirds of the board's export losses and subsidies. The remaining third was met out of the levy on creamery milk suppliers. At the end of 1971 with a view to gearing ourselves for entry into the EEC the milk price support arrangements were re-structured. The milk price and quality allowances formerly paid direct to the creameries were incorporated in the board's export prices and as a result there was a substantial increase in the board's export losses and subsidies. This however merely reflected a change in the method of paying Exchequer support. The small amounts arising in the period between December, 1971, and 31st March, 1972, were dealt with on the former two-thirds/one-third basis but for the period from April, 1972, onwards it is necessary to remove the two-thirds limit on the proportion of the board's losses and subsidies which may be met by the Exchequer. This is provided for in section 10 of the Bill.

For the first time the dairy industry now has the opportunity to exploit its full potential. It is important that the marketing side of the industry should be in a position to make the most of the opportunities that are available. This Bill helps the industry along the right road and I confidently recommend its terms to the House.

Mr. O'Callaghan

I welcome this Bill to the House and in doing so I should like to make a few short comments. First of all the Bill, as the Minister has already pointed out, is necessary because of our entry into the European Economic Community and because of regulations which the old board would not comply with in these circumstances. A new co-operative board has to be formed to comply with EEC regulations.

The growth of the dairy industry has been substantial within the last few years and there is a considerably greater quantity of milk products to be marketed. Because of this a board involving all the interests of the dairy industry to a greater extent than ever before is an absolute essential.

Previously we were relying on the British market to sell the greater proportion of our dairy products. Now we will be getting our products, in so far as we can, into the European market and because of this the new board will have their work cut out for them to establish their brand on that market. Milk production has leapt forward within the last year or two and I believe will continue to increase within the coming six, seven or eight years. The result of this is that there is a great need for an active and very virile marketing arm with a clearly identified product brand, such as we have already in the "Kerrygold" brand, and that this brand would be firmly established in the markets in Europe, as well as those in the Third World. It is an absolute essential for our dairy farmers and for the processing portion of the industry as well.

I would hope also that the new board will be fully representative of all the dairying interests in the country and that those processors who are still hesitant about coming into the new set-up will eventually do so in their own time. We all know the difficulties of establishing a brand in the market place. We must say that the old Board Bainne was eminently successful in establishing the "Kerrygold" brand in Great Britain and indeed in many other markets throughout the world.

The Minister in his statement has suggested that the new board will be responsible for new product development. I believe this to be a very important aspect of the new board's functions. Because the present pricing system for our dairy products in Europe is based on an intervention price for butter and skim milk powder, at this moment if one asks what dairy products a processor should make from his milk intake the simple answer is that he should make butter and skim milk powder only. Not alone is he guaranteed a price for his product if he does this but he is also guaranteed a market. The intervention system is such that if he cannot sell in the open market his product will be brought up by the Community.

The price of all other dairy products, as far as I know, is related to the butterfat price for milk. It is thought by some authorities here that this mitigates against getting the best price possible for the farmer. At the moment, as far as I am aware, milk which is processed into cheese is worth a halfpenny a gallon less than milk which is processed into skim milk powder. I am open to correction on that but I believe that is the case.

The present pricing system for milk in Europe is merely, in my view, compounding the difficulties of the butter and skim milk "mountains", and of the butter mountain in particular. There is very little incentive for those who have not already diversified into other milk products to do so. Because of this I feel that possibly in the future the intervention price and buying should be related to a much wider range of dairy products. This would help to divert a great deal of milk into, say, cheese manufacture and more milk powder manufacture and thus help to alleviate the position in regard to the butter "mountain".

Milk producers generally have responded very well to the price impetus which the Common Market has given us for our dairy products. Our export figures in 1972 were approximately £53 million worth of dairy products. I believe that in 1973 we will possibly export as much as £100 million worth of dairy products, and from projections for the 1980's, beginning in 1980, it would appear there would be a total export of approximately £200 million worth of dairy products at that time. If this is the case our farmers have shown great confidence in their industry. We all hope that this confidence will be justified by events in the future. They have invested very heavily in dairy cattle and dairy machinery and most of the money they have invested in this is borrowed capital.

If the predictions which have been made in regard to the production of milk are correct the new board will have its work cut out to sell all these products to the best advantage in the European markets as well as in the world markets. We all wish them well in their efforts and hope that our brand will be as firmly established in Europe as it has been in Great Britain in the past.

Mr. Butler

I welcome this Bill but I do not agree entirely with some of the statements made by the Minister, in particular his statement regarding the monopoly of sales by one organisation. I believe in competition and within the EEC this is what is required. I shall refer to that later. In welcoming the Bill may I say I have personal knowledge of the workings of An Bord Bainne which has now been replaced by An Bord Bainne Co-operative Limited.

Bord Bainne was set up in 1961. At that time we had difficulty with our exports abroad and it was necessary that a board be set up to explore the world markets to enable us to get the best benefit for all of our products. Were it not for An Bord Bainne we would have had very lean times during the years prior to our entry into the EEC when our dairy products were on quota in the British market. Many nations throughout the world were importing dairy products. Before Bord Bainne was set up we had not the ability to explore those markets. When the board was set up the job was carried out efficiently by the people involved and we were able to export to countries even in the Far East. The prices we obtained were not substantial but they helped to balance our payments and relieve us of a mountain of butter that was building up even in this country. I extend my congratulation to the board for all they have done. The farmers owe a debt of gratitude to An Bord Bainne.

In 1961, the year An Bord Bainne was established, 305 million gallons of milk was supplied to creameries. In 1971, ten years after, 530 million gallons was supplied. This year it is expected that 600 million gallons of milk will be supplied to creameries. The consumption of dairy products did not increase very substantially. The increase in the production of milk which had to be converted into dairy products had to be sold elsewhere. There was an increase from 1961 to 1971 of 225 million gallons and this had to be exported. The value of our dairy products in 1971 was £48 million. In 1972 it rose to £59 million. It is estimated that the value of the 1973 figure will be substantially increased due to the substantial increase in prices for our dairy products abroad.

By 1980, as Senator O'Callaghan has stated, it is estimated that our dairy products will be worth £200 million. This is a substantial income to this nation. The farmers should be encouraged to produce more milk. The breakdown of our produce exported by An Bord Bainne in 1971 is something we should look at. It is very interesting from the point of view of the type of product we did produce and the type of product we should produce for the coming years. In 1972 we exported 37,000 tons of butter, 27,500 tons of cheese, 27,000 tons of skim powder, 10,700 tons of whole milk powder, 52,000 tons of chocolate crumb, 5,600 tons of cream, 800 tons of casein and 7,000 tons of other dairy products. That was the job Bord Bainne had to do. They deserve our congratulations for doing it. The value of those exports was £59 million. It was a great help to this nation that we could obtain through dairy products £59 million.

In the United Kingdom Irish butter was getting the premium price of £455 to £465 a ton for sweet cream "Kerry-gold" butter and £477 a ton for lactic butter whereas the Danes, the Dutch and the New Zealanders were obtaining £416 to £476 a ton. The price for Irish cheddar cheese on the British market was £500 a ton whereas once again the Dutch, the Danes and the New Zealanders were receiving £470 to £500 a ton. There was a difference in the type of cheddar cheese we were exporting. Our cheddar cheese contained a higher butter fat. Nonetheless the compensation we were receiving was higher than those countries would have obtained if their cheese had the same butter fat content as ours.

With mountains of butter rising every now and then within the EEC it is up to us to seek alternative purchasing agencies. The only way to do this was to form some kind of marketing board. Ireland is a country of small creameries and such small creameries could not export dairy products. Most of the small creameries were only making butter. As Senator O'Callaghan has said, perhaps it would pay us all better if we were only making butter and skim milk powder now. It is a matter the Minister should look at.

Ours being a country of small creameries it was necessary to set up some type of marketing organisation. What better organisation could we set up than the type of organisation represented by An Bord Bainne? That board had the personnel, the people who had obtained the markets for us previously and who knew the contacts. The transfer from Bord Bainne to Bord Bainne Co-operative Limited was the correct action. Those who will make up the new board should be the people who made up the board of Bord Bainne. These people knew what they are up against. They would be able to get the maximum benefit for us.

The bigger creameries may be able to sell against world competition. Bigger creameries are made up of all sections of the farming community, from the farmer right up to the top executive negotiating in the EEC. They were the people who got for us the type of product we have. Bigger creameries can and will create the competition we need to earn the best price for our products and in turn the farmer will get the best price for his milk which produces these products.

Bord Bainne, as the Minister stated, has a commanding share of Adams Foods in England and I congratulate the bord on that purchase. They have obtained for us through that purchase access to the British market. We can display our products on the British markets now. We will be able to gain substantially from this access.

While New Zealand exports to the UK will be declining from now until 1980, we must be in a position to fill the gap created by that decline. We must be able to sell the same products as new Zealand as well as our own products. The UK is a big market. We need all the expertise we can get to get into this market. We must also have competition in our market also. The only problem will be if we have superflous competition. The way the creamery industry is developing at the moment we will not be troubled by superfluous competition.

When the Bill had passed through the Dáil many of the directors of Bord Bainne asked the executive to have confidence in An Bord Bainne Co-operative in the future. I also ask the executive of that board to have confidence in An Bord Bainne Co-operative whether it is in a monopoly situation or whether it is in competition with the bigger creameries.

Senator O'Callaghan mentioned the transfer of butter fat from cheese to butter. He mentioned that it pays more to make butter than cheese. This is a fact. Enormous amounts of butter are being produced within the EEC. Some notice must be taken of the fact that cheese is a product which contains from 30 per cent up to 50 per cent butter fat. It is a way of selling butter fat. Cheese is a product which is nutritious in every way. Creameries which are producing cheese at present are losing money substantially. I know one creamery which over a period of four or five months have lost over £100,000 in the production of cheese. Now that the Minister is present—I have already spoken to him on this matter —maybe something will be done. I know the matter properly belongs to the Department of Industry and Commerce, but with his influence something may be done.

Professor Quinlan

I join with the others in welcoming this Bill. At the outset I wish to pay a very well-deserved tribute to Bord Bainne. In the 12 years of its existence it has more than justified all the high hopes which were expressed for the board when it was launched in 1961. No greater tribute can be paid to the board than to say that in that short period it has moved our dairy products in the British market into the position where they are commanding a premium—a premium on butter and, as outlined by previous speakers, a premium on cheese also. That is a very satisfactory position and a great deal of credit is due to the imaginative approach to marketing which was taken and the launching of the brand name "Kerrygold" which succeeded in making a very big impact on the British public. Everyone connected with the board deserves the highest praise and compliments for what they have done, especially the present chief executive, Mr. McGough, who has contributed so much during his tenure of the office. We can face the future, then, with confidence.

It is a happy augury that what in a sense is being forced on us through the EEC regulations or through the procedure of free competition succeeds in changing a statutory board to a co-operative one. This is a step in the right direction and one we are ready to undertake. It is a step where the industry must take more responsibility for the job than prevailed heretofore when it was a statutory board and governed by that.

I hope that this transfer to the co-operative system will at last succeed in sparking the co-operative movement. We have a proud history in the matter of the co-operative movement. It was the thinking of Sir Horace Plunket and Father Tom Finlay which at the start of the century launched the co-operative movement. The idea was taken up by Denmark and New Zealand and they quickly surpassed our use of it. There are reasons why we did not develop fast enough due to our markets and our general history at the time. They have taken the co-operative movement to the type of joint international trading combines which are dealing with Danish, Dutch and other products. Now we are arriving on the scene with this.

In our approach to this I hope we shall be able to infuse a dash of Father Tom Finlay's thinking: that the end result of co-operation is the betterment of the people concerned in the industry and of their fellow citizens. I hope the idealism of the early founders will serve to guide the new co-operative movement and that this will more than counterbalance the rather rugged cut-throat business methods which are unfortunately a feature of many of the joint co-operatives in other countries. We should take a balanced approach; and I appeal to the giants of the co-operative movement, such as the creamery combines, to play their part fully in this new development. There may be some short-term gain for standing aside but the national interest in the long run will be best served if the larger creamery units accept it as a national duty to play their part and to help the weaker section of the co-operative movement to expand and develop as part of An Bord Bainne Co-operative Limited.

The previous speaker stated that some creameries have lost by producing cheese over the past few months. I agree, and as far as it lies within the power of the Government some effort should be made to compensate to some extent for that. Be that as it may, in such circumstances cremeries geared for the production of cheese, if they look to the long term prospect of the dairying industry, will see they must stay in production. They cannot afford to lose the market they have so carefully fostered and developed over the past decade and they will need those markets and the premiums to be got in those markets over and above the production of easier products such as butter. These premiums will be there to be got in the years ahead. If there is a loss to be taken this year I am confident that that will be more than made up in the years ahead when a more rational policy, which will make for better utilisation of our milk, will gradually emerge.

Cheese is far more labour-intensive than butter, and while the switch over from cheese to butter this year might have been economic for the creamery unit concerned, for the nation it meant the throwing of several thousands of workers in the creameries out of employment. In this era of free competition we must endeavour to ensure that the national interest is kept to the fore; and while I do not think the Government, under new EEC regulations are in a position to compel, they can exhort, and this applies to all sections of the community who can exert a moral pressure in this supposedly free-for-all EEC system. We must put the national interest first. Our first job and the greatest contribution we can make to the welfare of Europe is to put our own house in order and to develop our own community and its resources. I hope this new co-operative will, from the outset, take Father Finlay's and Sir Horace Plunkett's philosophy as their guide and that they and the Minister will strive for this.

I should like to ask the Minister to have a look at the legislation for the co-operative organisation. Some slight amendment on voting procedures was made two years ago. That ensured in a minor way that only those who were genuinely part of the industry had a real say in it. Take the case of the village publican with one cow; his voice was reduced to the level of one cow. The time is long overdue for a good look at the legislation under which this operates.

The assets of Bord Bainne are being transferred even though they have substantial capital of £2½ million. That is worth an annual income of £200,000 per year approximately to this new body. There is no immediate wish to run down the capital involved. Not too much can be done with £200,000 a year, yet I should like to think that the priorities could be extended somewhat. The Act states this can be used for the orderly marketing and distribution of the product. There is a step before marketing: the orderly production, marketing and distribution. We must start from production and that is probably our weakest point at present in that we still have not succeeded in organising a 40-hour week for the dairying industry. I do not mean that literally, but we have not made it possible for those working in the dairying industry to have time off, holidays and relief service to take over when they are sick.

An absolute essential for the real development of the dairying industry is the development of a really efficient relief service for farmers. This could be attached to the local co-operative centre and could include milking units. In that way a farmer could ring up and arrange to get the milking unit down to his farm to do the milking for him for a day, a week, a month, or even to contract it out for a year if necessary. If we introduce such a system it will mean that workers in the dairying industry will no longer feel tied for seven days a week to the job, that they can have time off whenever they want it. They can pay for the service and they will be willing to pay for it.

That is something that I had hoped the Government in the past would have taken a much more positive lead in by giving some financial inducement in the early years to get the service going. After a very short time such a service should be more than self-financing. I doubt if the Government can now enter that field under EEC conditions. I believe the impetus will now have to come from the co-operative movement itself. Perhaps Bord Bainne Co-operative Limited could take a lead in this and provide some financial incentive to get the scheme under way. Can the Government in any way co-operate in getting such an overdue and worthwhile system going? From a national point of view it would result in some very good and permanent employment for our people. That is still our first priority.

I wonder why the guarantee of Bord Bainne Co-operative Limited—the Government guarantee has been increased from £5 to £20 million —is to be ceased 1977. That does not do very much more than make up for the devaluation that has occurred since 1961. If it is possible, it should be left open-ended. It is a pity to tie it to just four years hence. I welcome what has been done and I hope that this will be the spur for which the co-operative movement has been waiting.

In the past the central organisation of the co-operative movement, the IAOS, had little power and less money. I wonder if in the future the financial angle of it will be capable of being subvented in some way through the dealings of Bord Bainne Co-operative Limited. It is essential that such a board undertakes its functions correctly and that it should be prepared to invest in research into orderly marketing of products and so on. It is quite a common feature of co-operatives elsewhere that they are alive to the advantages of research and they invest fairly heavily in that field. I hope that this co-operative will do likewise.

In conclusion, I would ask the Minister to resist the present ill-advised effort that is being made to try to bring agricultural research under the one umbrella of all research in this country. There is an effort to tie-in the spending on agricultural research and to make it subservient to or dependent on the Science Council. I think that would be the height of folly, because research as carried out in agriculture is 95 per cent development. It is not the type of research pioneering into the unknown that is properly labelled as research in other fields. The personnel of the Science Council would not be sympathetic to that type of approach. I appeal to the Minister to use his influence to see that that does not happen. I welcome what has been done. We look forward to a continuation of the pioneering spirt of Bord Bainne Co-operative Limited in this great work.

Mr. Keegan

I should like to join with other Senators in welcoming this Bill. We are all aware that it has been necessary to insert the word "co-operative" after the title of the old Bord Bainne, which was first established in 1961. I should like to bring Senator's minds back to a period prior to 1961 when this country was importing dairy products. Great changes have taken place in that short period. We have now become a powerful competitor in Europe and in Britain in the sale and disposal of our agricultural products. Great tribute should be paid to Bord Bainne for their success and their achievements in the last 12 years.

I remember that when Bord Bainne was established many people had grave misgivings and doubts with regard to the ability of this board to market our dairy products, to succeed in establishing new markets for our farmers or to succeed in getting our farmers to produce more dairy products. Many people at that time felt that the establishment of Bord Bainne was just another way of creating "jobs for the boys" but I am glad to say that it has exceeded the expectations of many and its achievements are now accepted by every section of the community. Bord Bainne's efforts would have been useless had it not been for the fact that the farming community responded to the call to produce more and more dairy products over the years. We must pay tribute to them for their efforts to produce such products in recent years when it was not profitable for them to do so. Now it has become a profitable enterprise and our farmers have responded to the call to increase their production.

We now fully realise that this new board must meet the challenge of the future. They must endeavour to secure more and more markets for the greater amount of produce which will be available from Irish farms. Every effort must be made to give this board our full support. We must ensure that every possible outlet is availed of and that no surplus products are left on our hands in the future. We had mountains of butter in cold storage in this country some years ago but I am glad that is not the situation now.

The dairy farmers are conscious of the role that they are playing as producers of this great product and of their efforts to build up the economy of this country. For that reason I welcome the changes made necessary by our membership of the EEC. I give this new board my full support and I wish them every success in their efforts in the future.

Mr. Kilbride

I welcome this Bill. My thinking on the advances that are likely to accrue from it follows the lines expressed by Senator Quinlan. The organisation, success and advance of dairying in this country, is entirely due to the co-operative movement. I come from an area which is to a considerable extent within the ambit of one of the most successful co-operative's in the country, that is, the Killeshandra Co-operative. With Senator Keegan, I feel that Bord Bainne, through their association with the manager of that co-operative, Mr. O'Neill, has done a lot of good in that area, and I express thanks to Mr. O'Neill for that. For his contribution in the management and advance of Bord Bainne the nation stands in considerable debt.

Technical organisation is a very important factor in the marketing and the efficiency of the dairying industry, from the level of the collection of milk to its transport and manufacture into butter and cheese in the creameries. The distance, the mode of conveyance and the efficiency in the creamery have a considerable effect on the national advantages that our dairy expert and industrial services represent with resulant effect on the national income.

Whether or not the farmer with the three, four or six cows in North Longford, in Leitrim, Roscommon or Cavan can look forward to the same income as the man with the 150 cows in Cork, Tipperary or Limerick— that is the real basis on which this industry is to be judged. In the part of the country where milk production has been introduced, in counties like Meath, Westmeath and South Longford, which are essentially grade A areas, the Government over the last number of years have been offering incentives to farmers to get out of milk. Recently those incentives have been increased. We get a bigger grant if we get out of it and stay out of it for a certain length of time. On a national examination of this we must feel there is a conflict of interests somewhere. The success of the dairying industry, which was referred to by Senator Keegan, and the grasping of opportunities by the dairying farmers—all this does not appear to fit in with the need that seems to exist to get people out of milk production.

In the past the smaller farmer, and to some extent the bigger farmer, had been producing milk from a breed of cow that was capable of producing a good cross breed: the Irish Dairy Shorthorn. We had a very successful export trade of Herefords or Aberdeen Angus in the past, but that apparently is now disappearing. If we had the foundation stock of a very well developed Irish shorthorn dairy cow producing that type of breed it would be much easier to feed than the other breeds we have in the country—for instance, the Friesian, which is a very good milk-producing animal. However, one could nearly say that three Shorthorns could be fed on the same amount that it would take to feed two Friesians. I should like the Minister to know that this foundation stock, the Irish Dairy Shorthorn, is fast disappearing in this country.

An effort was made a year or two ago to have a record taken of the extent to which it is disappearing and incentives were offered to people to produce from that dairy stock a succession of animals to ensure it would be retained. Look now at the whole picture of dairying in this country. We have an incentive to produce milk, we have an incentive to leave milk production; we have an incentive to change our breeds; we have, at the same time, fear that certain very essential breeds are disappearing.

Senator Ouinlan referred to the establishment of a 40-hour week in the dairying industry. I can assure him that such is not known in places like North Longford, Leitrim or Roscommon or in the western counties. What these people hope to attain is an 80-or 90-hour week. I hope that when the Minister comes to apply standards he will apply them in such a way that the family producer of milk and his wife who work all those long hours will see some advance in their income, resulting in a better and a happier home. That is what we must have: people who live on the land being kept on the land.

We must reach the stage when as many dairy farmers will be on the land as were on it ten, 15 or 20 years ago and that they will be getting a better living resulting in a happier home. While I appreciate fully that it is through the co-operative system this can be done, we must not lose sight of the standards of living of the family people engaged in dairying. I wish the Minister every success with this Bill.

Mr. Dolan

I, too, welcome this Bill and join with the others who have paid a well-deserved tribute to the members of Bord Bainne for the excellent work they did since they were established in 1961. The figures quoted by Senators have shown the tremendous expansion that has taken place in our agricultural production since then. The policy pursued by the various Ministers was certainly responsible and the encouragement given to farmers helped considerably.

One of the most important factors in bringing about that increase was the heifer scheme introduced some years ago, which helped to increase the cattle population. If we had not the cows, naturally we would not have all these milk products; and you do not get them except by long-term planning.

I want to agree wholeheartedly with what Senator Kilbride has said regarding the Killeshandra area, where I live myself. I want to join with him in paying a well-deserved tribute to the chairman of Bord Bainne and Mr. O'Neill, whom he mentioned there. I might mention incidentally that Mr. O'Neill has been manager in Killeshandra since 1947. We are in a traditional milk area and our creamery has been exporting since 1898. It could not have lasted in a competitive market such as we then had without being able to produce a very efficient product. Indeed, the standard and quality of our butter was so good that our creamery has won the Reed Cup on many occasions.

The key to good salesmanship is clean excellent production. It reflects great credit on the local farmers, who supply this clean milk, and on the efficiency of the staff that we have this reputation. Without boasting, I may say that in our county we have won the Tidy Towns Competition on many occasions and we have also won the trophy for the tidiest county in Ireland. As I said, we also scored many times as far as best butter production is concerned.

So that this trend will continue and expand the Minister will want to look into this position in future and indeed get into consultation with his other Cabinet colleagues regarding the rapid expansion of the regional water scheme. Such a scheme is certainly tied up with the efficiency which goes with producing milk and clean, top class dairy products of various kinds.

Could the Minister also examine the question of diversification, apart from going into cheese and milk powder which is already being catered for. Up in the North-West we have an excellent factory which was established in 1961 for the export of milk powder. This has been a tremendous asset to this area and over 300 are employed there. Again it is true to say that without the contacts which we have had—and I mention here especially Mr. Lawless of McCormack's Milk Powder—and without the effort put into it by Bord Bainne, it would be impossible to sell in the now highly-competitive market situation abroad.

Practically all our economy in this country is in one way or another tied to the farming industry. While farming to some may be a satisfying life, it is a very difficult occupation for people in 1973. Very many people are now leaving the land; indeed very many young farmers often find it difficult to get eligible marriage partners to live a life on the land with them. Consequently the rural population has been dwindling and the only method now whereby we can counteract it is by giving to those living in rural Ireland amenities and opportunities equal to those now enjoyed by the people living in urban and city areas.

Education must play a major part in this. It is very important that the role of the farmer's wife and her status should be looked upon as equal to that of those in any other profession or position in this country. As it is at present, it is deemed by many a very hard life. I came from Killeshandra this morning and before 7 o'clock the cows all around that area had been gathered in for milking. That means that these people had to be out since 6 o'clock this morning. They will have to do the same again in the evening and on Saturdays and Sundays. Some Senators will agree that there is no 40-hour week and no set hours. This should be remembered that those who are now clamouring to tax the farmers because they seem to be enjoying some well-deserved, hard-earned bit of extra remuneration and because they have succeeded in ekeing out a meagre existence for themselves and their families. Many of the small farmers I know just barely succeed in doing this.

I would also ask the Minister to speed up if at all possible the rationalisation of smaller creameries in areas where those creameries are not in a position to pay people an economic price for their milk. The difference between the prices paid is sometimes rather alarming. While I appreciate that smaller creameries may not be able to pay a price similar to those paid by their more efficient neighbours, at the same time that is no satisfaction to the family producing milk in an area hemmed in by the Border on one side and probably by mountains on the other.

This rationalisation should be done immediately. Up in the north-west of Cavan and Leitrim, in particular, it is very much needed. Here, the land and the soils present a very difficult obstacle for people who keep cattle, especially in the winter period; and a much below average price for the milk produced does not help. Apart from these few observations, I welcome the Bill.

An Leas-Chathaoirleach

The Minister has been called away for a Division in the Dáil. If the Seanad so wish we can continue the debate in the Minister's absence; otherwise we can wait, perhaps, until the Minister comes back.

Mr. Whyte

I, like the other Senators, welcome this Bill. It is necessary at this time because of the new EEC regulations. I, too, would like to compliment the old board. They did a good job in difficult times after they were established. The situation which obtained when they were established was the worst it could possibly be. We did not have any arrangements at all for the marketing of our dairy produce. They had to build from the ground up. They succeeded far better than many of us thought. Some Senators have already remarked that people said it was just another arrangement to establish a further board to make jobs for the boys. It did not turn out to be so, and they deserve to be complimented.

This new board has a huge job to do. They are coming in at a time when there are markets for our dairy produce, markets which were not there in the past. They are coming in at a time when we are not as well geared to use those markets as we ought because over the past number of years we have had a stock low policy. Today it is feasible, and supposedly patriotic, to produce milk and dairy produce.

For some political reasons we are expected to tone down production. Anybody engaged in agriculture knows that this is not possible. It is a long-term job that needs long-term planning over a number of years. Unfortunately in the past this has not been the position in agriculture. I often thought that agriculture ought to have been taken outside the field of politics altogether and that an independent board should plan for agriculture. This has not happened.

One would hope that from now on we would have a more enlightened view on those matters. Let us remember that this country by and large depends to a great extent upon agricultural produce. It might be said that dairy produce is a by-product of other things and may become more so in the future. We may have a surplus of dairy produce. Nonetheless, without dairy duce you cannot have beef and other things that spring from that. This country produces only half of what it could produce in the nature of dairy produce, beef and meats of all sorts.

The people engaged in agriculture up to now have been living at a mere subsistence level. The people who are still engaged in agriculture may accept that for the rest of their time, but young people coming into agriculture will no longer accept the conditions that have existed up to now. One Senator remarked this morning that many of the cows have to be collected before 8 a.m. and the farmers will still be working until 8 p.m. This is a 12-hour day. People cannot be expected to accept this. In addition, farmers work a seven-day week. If we are to keep people in this industry then they need reasonable pay, reasonable hours and reasonable facilities for off-time. If people are given such conditions then the industry will be efficient. It must do as good a job as is possible for the nation.

I accept the view expressed by a Senator that we need competition. But competition within the country may not be the best way of doing things. We are a small country exporting to a world market. We have huge competitors also exporting to that market. We have to ensure that our produce is up to the highest possible standard. We have to ensure that our products are marketed in the best possible way without any waste or duplication. To do that we all need to work together.

I agree with the Minister when he said he would like to see all of the co-ops supporting this new board. We have got to do that. Even doing that, we are still a small unit within the European context. Competition is necessary; but we have to ensure that our dairy produce leaving this country, whether through this new board or Government-inspected, is up to the very highest standard. Produce which is acceptable on the world market now may well be out-of-date in a year or two.

It is necessary that a huge amount of money be available for dairy research in this country. This will be a recurring process. The money necessary for this must come from the dairy industry itself. This is all the more reason why this new board which it is proposed to set up ought to be in a position to retain a certain amount, however, this is to be arranged, in order to ensure that we continue to be in the forefront of the markets of Europe and the world.

We have the growing volume of produce in this country. We could produce twice as much as we are doing at present. I believe we will do this because farmers in general have confidence in their industry. Very much of the profits that have been made in agriculture over the last two or three years have not gone to ease the lot of the farmer, very often they have not gone towards improving his living conditions, which need to be improved very considerably. Most of that extra money has gone back into agriculture. The production from those extra moneys will not be seen for a year or two. It is almost a certainty that a huge volume of produce will be coming on the market over the next few years and it is essential that this board should have proper markets for this produce and be in a position to continue to develop those markets. That problem is best handled by a co-operative board with the full support of all the co-operatives.

There are many aspects of the dairy industry which one could discuss here today, but it is perhaps better not to stay too long on that. Nonetheless, farmers will have to realise that we are now in the age of specialisation. It is very likely that much of our agricultural produce here will be switched into particular lines. It looks as if dairying will be one of those.

Senators have already asked what is the future of the smaller farmer, the man with four or five cows. The future for the man in that job alone is not very bright. We must remember that very many farmers have a small number of cows and they are also dabbling in other types of agriculture. They will probably come to realise that in their own interests, and probably in the national interest, they should specialise in one particular line. It may well be dairying. We have a long way to go there. The markets are there now. There is confidence in the industry. There is no reason why we should not continue to expand.

If we are to do that we will need the full co-operation of other boards in the country. The ESB spring to mind at once. I will not dwell on this but the amount of current available at farm level is very important to the agricultural industry. It may well be said that farmers installed the current ten, 15 or 20 years ago and they may not have done as good as job as was necessary then. They did not envisage the huge amount of current now needed. Nonetheless, the ESB are probably at fault because they have not made the necessary current available to the farmers. They will have to do this in the future because it is very important to the industry. Without that increase the industry cannot carry on in an efficient way.

Farmers ought to be in a position to have their farm workers properly trained. There should be opportunities to acquire the skills that are necessary and which will be even more necessary in the future. Our policy with regard to agricultural education is rather lacking. A few scholarships are available at county committee level. If people do not measure up to the high standard required there are no facilities for them to obtain further education on agricultural lines. This is deplorable. Everybody going into agriculture now ought to have a very high standard of education and a high degree of technical skill.

I welcome the Bill. It was necessary at this time. A huge amount of money will be necessary. When I see those figures of the guarantees available to us in the future I feel that more moneys will be necessary. It will be necessary for the farmers, through this board and through the other co-ops, to push a lot more money into agriculture. The markets are there. The opportunities are there. We have the will from our present Government to ensure that all those favourable opportunities will be availed of.

Minister for Agriculture and Fisheries (Mr. Clinton)

I should like to apologise to the Seanad for having to leave the House to take part in a Division in the Dáil. I wish to thank the Members of the House for their support for this Bill and for their appreciation of the need and desirability for such a measure. From the contributions made, it is quite obvious that there is a very full appreciation of the importance of the dairy industry and of the opportunities available in present circumstances for further expansion and development in this industry generally.

I will try in the course of replying to answer the various comments made by the speakers. I agree generally with the ideas and comments expressed in the course of this debate. It was remarkable throughout the debate that speaker after speaker complimented Bord Bainne on the wonderful job they had done over the years and expressed high expectations of the work they were likely to do for the industry in the future. I share that confidence and I should like to add my tribute to the work that Bord Bainne have done for the dairy industry. The only real disagreement I have—and I am sorry to have to disagree with my own colleague—is with the view which Senator Butler put forward on centralised selling and which he holds quite strongly.

I find it extremely difficult to understand Senator Butler's approach to this matter and how he sees that competition could be healthy and desirable in this particular aspect of the industry. It will be shown before very long that individual units of the industry, perhaps, could have a short-term advantage by selling in a particular market, but that is something which I do not think will survive. Large-scale selling will show its advantages as time goes on. We will have a 100 per cent selling, I hope, through this centralised agency which we are setting up and supporting on a co-operative basis.

I must say that I was extremely disappointed recently to discover that, without any necessity whatever, two processing firms had put very substantial quantities of skim powder into intervention. One of these was a co-operative and the other was a private enterprise firm. I emphasise that there was no necessity for putting these quantities of skim milk into intervention. I also want to emphasise that it does us nothing but harm on the Continent and in the EEC generally to put surplus products of this kind into intervention. It is a wonderful thing for a Minister for Agriculture to go over to the Council of Ministers and say that whoever is building up the mountain of butter or milk powder in Europe it is not Ireland. When we are fighting for better prices for these products next Spring, it will be invaluable for us to be able to make this claim.

It is all the more disappointing to see these products going into intervention now when we know it is not necessary and can be avoided. We know that there are outlets for these products. When all the anticipation is that the price of skim milk powder will increase substantially in future, it is very regrettable that this action should be taken. I would hope that people like Senator Butler and other Senators who are very closely connected with the industry would use their influence to dissuade these particular concerns from selling to intervention and would appeal to them to come into this centralised marketing agency and give Bord Bainne their very full support.

It was obvious from the debate generally that there was a very full appreciation of the importance of the dairy industry in the economy as a whole. Senator Butler in particular gave detailed figures for output and income and for participation in the industry. One point which he did not refer to was the value of calves produced because of the dairy industry. When we add the value of the milk output to the value of the calves it comes to about £160 million. This sum is equal to one-third of the total farm output. We are speaking, then, of a very substantial industry, of a growth area which will get very much bigger in future. Milk output is increasing at the rate of 70 million or 80 million gallons per annum. Some of the speakers emphasised that this growth would need an immense amount of investment. The estimated investment which would be required for the expansion expected between now and 1980 is no less than £300 million. This is an enormous sum of money, but it is necessary if the producers in this country are to equip themselves properly to be competitive in the European scene. I look forward to a continued expansion of milk output.

Senator Kilbride was wondering whether we should be inducing people to take advantage of the various European schemes and incentives which are presented in order to get people to change from milk production. My advice is very strongly in favour of keeping people in milk production and expanding its growth further. This is the surest way, particularly for small farmers, to pull themselves up by their own shoestrings. There is nothing paying as well at the moment as milk production. People who are reasonably well-equipped and who can reach a certain size in the industry are getting substantial incomes. I have been extremely impressed recently on a tour of the South of Ireland to see the strides being made in modernising milk production. I hope that those efforts will continue.

Somebody spoke about a 40-hour week. Senator Kilbride said there was no 40-hour week in Longford. I hope there will be a 40-hour week in Longford. If we are to keep our young people in farming we must take the drudgery out of the job. There are all the signs that that is the line being pursued by the more progressive milk producers in the country at present. They are making their farming an attractive business. Arrangements are being made in areas where the job is being well done and where the workload is being properly organised for weekend and holiday relief. It is a development I should like to see expanding.

The question of skim milk and butter production was raised. Senator O'Callaghan said that these were the obvious and best-paying products. There was a temptation, however, to stay in these products. I agree with him, but I hope it is a temptation which will be resisted. The fact that cheese as a product is not paying well at the moment is no reason for people either to change from cheese production or to reduce it. It is agreed by all that cheese was one of the advantage products prior to our entry into EEC. The present position has arisen by overstocking of the British market by cheeses from third countries prior to entry. The effect from that still exists, but I hope it will rapidly disappear. I hope cheese will again be a very high-priced product.

There is an immense amount of work to be done in new product research and in broadening the product range generally. We must as far as possible keep away from surplus products because of the danger that the common agricultural policy might be in danger if we were producing surpluses and disregarding the fact of these surpluses. We must get milk by every and any means into the highest-priced products, whatever they are.

There must be considerable research into the market for milk products and the range of products possible to new product production and marketing. We must hope for and expect a much greater investment not just by the State or by the market place but by those in the industry. Farmers must realise that if they want security in the future for their products they must put a substantial amount of money into research in new products and into marketing. I hope they will be convinced of this and will be induced to act accordingly. Reference was made to the fact that a lot of the money put into cheese and the industry generally was borrowed capital. I hope we are quickly getting out of that situation where we must depend on borrowed capital.

It has been stated that there is no increase in home sales. We should not be overconcerned about this, particularly in relation to butter sales, because we are leading Europe in the consumption of butter. We could be consuming more cheese; that is the only disappointment. One of the highest-priced products in France, for instance, is cheese. A considerable amount of milk goes into this high-priced cheese in France. It is a fairly perishable cheese, and if we were to produce the same cheese we would have certain difficulties about getting it on to the market fast enough, but that is part of the research we feel is necessary.

A number of speakers referred to the success of our export sales and to the important part that Bord Bainne played in all this success. This comes back to the point that we must rely more and more on Bord Bainne and on their experience in selling milk and milk products throughout the world.

Senator Quinlan asked why have guarantees to cease in 1977? I do not think they have to cease in 1977, but the need for continuing these guarantees will be non-existent after 1977. It is a question of building up confidence in the co-operative being set up. Bord Bainne as we knew them in the past, where the Government were guaranteeing only £5 million, were able to borrow quite substantial sums and carry on their business. There should not be any need after 1977 for this guarantee; but, if there is, no Irish Government will fail to provide support.

Everything possible is being done to get more co-operation and more of the industry into the co-operative movement. This is something upon which I have concentrated a good deal of effort since coming into office. I expect that before long the entire industry will be in the hands of cooperatives. Farmers, in other words, will be doing their own business; and the sooner we arrive at that position the better for all concerned. The Government, as such, should not be in direct production. We should get out of that position as soon as possible. The farmers are well able to look after themselves.

Somebody mentioned with great regret the disappearance of the Shorthorn cow. We should not have any such regrets. People should keep the breeds they feel are best suited to the industry and should concentrate on these. Income matters more than sentiment in relation to any industry, and the agricultural industry is no exception.

Senator Quinlan made reference to legislation in relation to the co-operative movement. I should like to say in reply that the necessary legislation is under active consideration and will be put forward as soon as possible. There will be no delay in this matter as the Government fully appreciate the need for this legislation.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without amendment, received for final consideration and passed.