Seanad Éireann debate -
Thursday, 20 Mar 1986

Vol. 111 No. 16

Slaughtered and Detained Animals (Compensation) Bill, 1985: Second Stage.

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

Minister of State at the Department of Agriculture (Mr. Hegarty)

This Bill has as its main purpose the updating of some of the provisions of the Slaughtered and Detained Animals (Compensation) Acts, 1928 to 1938, under which a special fund was established for use in compensating livestock exporters who might suffer financial loss if, as a result of an outbreak or a suspected outbreak of foot-and-mouth disease in Britain, their animals were slaughtered, died or were unduly detained at a British landing port. The fund is financed from charges levied on exports of livestock to Britain and is administered by trustees appointed by the national executive of the Irish livestock trade.

The Bill now before the House arises from a request by the trustees for amendments to the basic legislation to enable them to purchase offices and to provide greater flexibility in the fixing of the export charges payable under the Acts and of the amount of remuneration payable to their secretary. The Bill also includes provisions whereby the trustees might be wound-up if, at some future date, such winding-up is considered necessary or appropriate.

I would like now to make some comments on the principal provisions of the Bill.

Section 2 deals with the acquisition by the trustees of office premises. The trustees have no legal power under the Acts to enable them to purchase offices. Up to now they have had the use of offices in premises owned by the Exported Live Stock (Insurance) Board. Legislation enacted in 1984 — The Exported Live Stock (Insurance) Act, 1984, No. 22 of 1984 — provided for the winding-up of the latter board and for the sale at market value of its premises. Consequently, the trustees must now provide their own accommodation and they are anxious to buy the premises of the insurance board and to continue to provide accommodation there for the other livestock agencies which are in the building. The purchase of the insurance board's premises by the trustees will provide the trustees with suitable office accommodation and an investment outlet for some of their considerable funds.

Section 3 concerns the remuneration of the secretary to the trustees. The 1928 Act — section 7 — provided for the appointment by the trustees of a secretary whose salary was fixed at £200 per annum — later increased by the 1938 Act to £300 per annum. It has remained at that level ever since. This ceiling is clearly unrealistic in present-day terms and the Bill proposes that the trustees themselves, with the Minister's consent and with the concurrence of the Minister for the Public Service, may determine the amount of the secretary's salary in the future. Incidentally, the secretary is part-time.

Section 4 deals with the scale of export charges. The collection of the export levies has been suspended since 1973. Since then the amount of money in the compensation fund has exceeded the £40,000 which was the level considered in the Act as being sufficient to meet any charges which might be expected to be paid out of the fund. In fact payments from the fund when last made in 1963 were very small. The scale of charges which would be applicable if the levies were to be reintroduced would be those fixed under the original Acts, that is 2½d. for cattle and 1d. and ½d. for pigs and sheep. This section amends the 1928 Act by providing for the fixing at realistic levels of any new charges by ministerial order.

I should add that it is unlikely that levies will be introduced in the near future. As I mentioned, the compensation fund had in excess of £40,000 in 1973 and this sum has been earning interest over the years and the balance in the fund is at present over £132,000. The livestock trade are satisfied that, even after the purchase of office premises which they will be enabled to do under the Bill, there will be more than enough money in the fund to meet any foreseeable claims. Senators will be aware of the steady decline in the level of live cattle exports to Britain in recent years. There is also the fact that the last outbreak of foot-and-mouth disease in Britain was in 1981 — Isle of Wight — and before that the last major outbreak occurred in 1968. While one can never be dogmatic about disease outbreaks, it is not unreasonable to assume that with harmonised conditions in the EC for dealing with foot-and-mouth disease and more stringent requirements for trade in meat and livestock, the likelihood of another epizootic of foot-and-mouth disease in Britain is rather remote.

The compensation fund is therefore more of an "insurance safety-net" which can be used in the unlikely event of a disease outbreak causing losses for Irish cattle exporters.

Section 5 concerns the winding-up of the trustees. The original Acts did not make any provision for the winding-up of the trustees nor for the termination of the employment of the secretary to the trustees.

Under this section the trustees are empowered to take such action as is necessary to wind-up their affairs, either on foot of a direction given by the Minister or of a decision taken by them with the concurrence of the national executive of the livestock trade.

We have also included in this section a mechanism by which the trustees may terminate the employment of their secretary, either on terms agreed between themselves and their secretary, with the concurrence of the Minister for the Public Service, or, failing such agreement, on terms determined by the Minister for the Public Service. This will ensure that if the secretary is not satisfied with the terms offered by the trustees he can refer the matter to the Minister for the Public Service who will then determine the appropriate terms. It is well to remember that the Slaughtered and Detained Animals Fund was set up at the request of the livestock trade. It is wholly financed by the trade. It is only reasonable to make provision for the winding-up of the fund and the ending of the employment of secretary, whenever the trade decide that it no longer requires the system.

The disposal of any premises acquired by the trustees is subject to the Minister's prior approval.

Section 6 sets out the arrangements to be followed when a decision has been taken to wind up the trustees. Subsection (1):

—paragraphs (i) and (ii) require the trustees to prepare a final account;

—paragraph (iii) lays down a time limit of six months for the making of claims for compensation;

—paragraph (iv) requires the trustees to publish a notice specifying the final period during which claims for compensation will be entertained;

—paragraph (v) (i) provides that the national executive of the livestock trade shall exercise their power to appoint members to the trustees only if it is necessary to do so to maintain a quorum at meetings of the trustees;

—paragraph (v) (ii) provides for the repeal of those sections of the 1928 and 1932 Acts concerned with appointment of trustees, scale of charges, method of payment of charges and the making of rules by the trustees;

—paragraph (vi) provides for the repeal of section 4 (2) of this Bill, which is concerned with the fixing of the scale of charges by ministerial order.

Subsection (2) requires the secretary to the trustees to submit a copy of the final account together with a copy of the auditor's report thereon.

Subsection (3) requires that the final audited account be made available on request to persons engaged in the livestock trade.

This section is merely providing for the technical steps to be taken for winding-up the affairs of the trustees. The trustees must prepare final accounts and deal with outstanding claims. Certain provisions of the Acts will be repealed and the final accounts will be made available to the Minister and to the livestock trade on request.

Section 7 concerns the disposal of any moneys remaining in the compensation fund. This provision is to cover a situation where funds may remain in the compensation fund after it has been wound-up and after the trustees have discharged all outstanding liabilities. It may, of course, happen that there will be no residual moneys remaining. In that case no problem arises. However, if some funds remain the national executive of the livestock trade can advise the Minister as to what should be done with those funds. If no advice is sought, or if he does not accept that advice, then the Minister can determine what should happen to the money.

Section 8 deals with the dissolution of the trustees. This section provides for the dissolution of the trustees by ministerial order after the trustees have wound up their affairs, have dealt with all claims for compensation and have submitted the final account.

Section 9 simply repeals the various enactments following the dissolvement of the trustees.

As I said at the outset this Bill introduces some desirable amendments to the original Acts. Its effect will be to update some of the original provisions, especially in relation to the functions of the trustees, the determination of export charges and the winding-up procedures. It is a Bill which has been introduced at the request of the livestock trade and I can recommend it to the House.

Mr. M. O'Toole

This legislation is to update a position which has been outdated for a long time, but is a necessary safeguard for the livestock trade during the emergency periods. We are fortunate in Ireland, as they are in Great Britain, that we have had no major outbreak of foot and mouth disease over the last 20 years. People in Great Britain in the agricultural, veterinary and administrative area should get together with our officials in the Department to ensure that no outbreak of disease is allowed into the country. The compensation and trustee machinery which was set up at that time is now outdated, both in salary for the secretary of the trustees and also in the levy charges that were introduced as outlined by the Minister. It was 2½d for cattle and a ½d for pigs and 1d for sheep. In modern day terms, that would be completely irrelevant. The £300 per annum paid to a part-time secretary is completely outdated also. For that reason it was necessary that this Bill should come before us.

There is a decrease in livestock exports at present, which is not a good thing. We should have a balance between live meat and dead meat exports if we are to guarantee a price to the producer. The two trades must work hand in hand and in competition with each other in the market area. It is a pity we have not had a greater livestock export input over the last number of years. It would have ensured that that balance would be maintained in the trade. I am sure many of us here remember a period in 1974 when the factories were unable to take our beef and our animals for slaughter and paid the farmers a very reduced price for the animals slaughtered. For that reason it is imperative that we should have a balance between the livestock exporter and the deadmeat exporter.

There is a myth — and it is only a myth found more in the city and bigger urban areas — that if all the meat were processed in the country we would give greater employment. Of course, that is the position; but to date we are not doing that. Eighty five per cent of our production is being exported in hind quarters and forequarters. They are not processed at all. A considerable amount of money has been spent by FEOGA for the installation of more processing equipment in our killing lines.

I am delighted that the Minister had consultations with the Irish Livestock Exporters on the issues of the winding-up of the trustees and salary of the secretary. I understand that the Bill deals with the termination of the trustees and the sale of premises. In that event will they be replaced by an agency, or will an emergency have to arise before we put into place another agency to take up the former responsibility of the trustees? Their responsibility was to be there in the event of an outbreak of foot and mouth disease. In the event of an outbreak of foot and mouth disease, what comes into play? Have we any security measure for the future?

Mr. Hegarty

Just to re-assure the Senator, we have no intention of winding up. There is provision in the Bill to do so if we ever wish to wind up the trustees.

Mr. M. O'Toole

I am delighted that that is the position because it would be at the behest of the trustees of the Irish livestock industry. The Minister is giving them enabling legislation to do this in the event of a decision being taken by the trustees to wind up at any given time. I am delighted that that has been spelt out because there was a doubt in my mind as to who would have responsibility in the event of a possible outbreak of foot and mouth disease in the future.

The decline in the number of cattle exported brought about the termination of the insurance board in 1984. When we have an animal disease free herd, when our OBF declaration will be coming next month and when we have abolished the use of hormones, we will have a commodity that will be needed to be marketed aggressively for the live export trade to get back on its feet in competition with the fresh meat exports. Security will have to be provided for animals arriving at Dublin Airport or at any inspection depot for roll-on/roll-off transport. Animals may be injured in transit and have to be slaughtered. If you arrive at a port or at an inspection depot and if an animal is unable to be shipped and ordered to be slaughtered, are the trustees to provide compensation for that livestock exporter, if the number of Irish livestock exporters increases over the next few years and if we achieve the targets set out in regard to the number of live cattle exports in the future? My concern is that the trustees will still be available. Their remuneration will be updated. Their levies are outdated. When all this machinery is put into operation by this Bill, I hope this safeguard will remain and that any animals coming into the destinations I mentioned will be covered for compensation in the absence of the insurance board. In that event I would be happy enough with the Bill.

Mr. Hourigan

I welcome the updating measures proposed in the Bill. It is also relevant to note that it has been done at the request of those vitally concerned with the trade. The Slaughtered and Detained Animals (Compensation) Acts 1928-1938, which did provide a vital safeguard for Irish exporters of livestock was in need of updating. There was, as already stated, a nominal payment per livestock unit being exported. That nominal unit of 2½d for cattle, 1d for pigs and ½d for sheep did accumulate some £40,000, which, through investment or otherwise, has risen to £132,000.

It is a matter of having the position regularised in the event of the fund being needed in the future. But, having regard to the basis for this legislation in the first instance, one would hope that it does not have practical application in the future. We have succeeded very effectively over many years in keeping foot and mouth disease from our country. This is a magnificent achievement on the part of all concerned. It is something that should be acknowledged — that we have saved our country from economic disaster and ruin. That is all that one could anticipate should that dreaded disease ever come in our direction. One cannot put one's head in the sand. One has to be ready and prepared for eventualities that may occur. Essentially, that is what this legislation is doing.

The payment to the secretary of £300 per annum needs to be up-dated. Nobody will quibble or disagree with that. There is also the question of the requirement for offices. That is an important one for the trustees so that they will be enabled by the Act to purchase offices which are available to them from the livestock exporters insurance company, which has been wound up.

All of us would support what is in the Bill. The Minister has given a very precise and clear outline of the Bill. There is no necessity for anybody to cover that ground again except to compliment the Minister for making quite clear what the updating of this legislation does. As I perceive it, it puts us in a state of readiness for eventualities which we hope will never come. That is not to say that we should not be in a position to cope with that situation should it arise. It is important to recognise that this legislation will enable the trustees to be financed in the future at an appropriate level. That, together with the acquisition of premises, would ensure that there would be a body available to us, if required. The legislation has the total backing of all concerned in the trade.

With regard to our exports to Britain, there was a dramatic reduction over a number of years whereas last year the figures may not have declined from the previous year. But on an overall basis, and taking a ten-year period, we have had a dramatic reduction of exports of live cattle to Britain. In so far as we can we must aim to have more cattle exported in a processed form adding value wherever we can, while at the same time making sure that we retain the element of competition that live exports give to the industry. I believe that is relevant whether the exports are to the United Kingdom or whether they are to the Continent of Europe or to third countries or wherever. I believe that an outlet of live cattle exports is always desirable. It gives a balance with dead meat exports. For that reason we would all recognise that.

I want to conclude by welcoming this legislation and its various provisions which have been so well outlined for us by the Minister, Deputy Hegarty. I believe that this is deserving of our fullest support.

Mr. Mullooly

The explanatory memorandum which was issued with this Bill tells us that under the Slaughtered and Diseased Animals (Compensation) Act, 1928-1938 a special fund was established to compensate livestock exporters for losses resulting from an outbreak of foot and mouth disease in Britain. This fund was financed by charges on livestock exports. The Minister, when introducing the Bill, stated that compensation would arise, that exporters would be entitled to compensation if their animals died or were unduly detained or had to be slaughtered as a result of a foot and mouth outbreak or a suspected outbreak of foot and mouth in Britain.

I must admit that until this Bill was circulated I was not aware of the existence of such a fund nor, indeed, did I realise there was such a group in existence as the Slaughtered and Detained Animals (Compensation) Trustees, to administer such a fund. I am sure that the same applies to many other Members of this House, and, indeed, to the vast majority of the public outside. The Bill amends and extends the Slaughtered and Diseased Animals (Compensation) Acts 1928-1938. It provides that the trustees may acquire an office premises. Secondly, it amends the Principal Act by providing that the export charges laid down in that Act will in future be fixed by the Minister through regulations made by him after consultation with the trustees. Thirdly, it provides in section 3 that the salary payable to the secretary of the trustees will in future be fixed by the Trustees but this can only be done after the prior consent of the Minister for Agriculture has been received and also the consent of the Minister for the Public Service. Lastly, the Bill provides powers for the winding up of the affairs of the trustees if a decision is taken under section 5 at some future date that this should happen. Therefore, there are four main provisions in the Bill.

The Minister stated that the trustees requested the amendments which are contained in the Bill, that is the amendments to the basic legislation. That is why the Bill is now before the House. I wonder did the trustees seek the provisions contained in section 5 or did the Minister, on his own initiative, decide to include the provisions of section 5. Therefore, if I did interpret the Minister correctly, he replied to Senator O'Toole that there were no plans to wind up the trustees. The fact that this section is included would lead one to believe that the Minister envisages the affairs of the trustees being wound up sooner rather than later.

Other points which the Minister made in his speech, too, would seem to indicate that the Minister regards the provisions of this legislation as approaching a stage when they will have become redundant. If that is the case and if the Minister envisages the affairs of the trustees being wound up sooner rather than later, what is the point in the trustees requiring office premises? Perhaps the Minister, when he is replying, might reply to that point.

The whole cattle trade has changed very dramatically since the passing of the Acts of 1928, 1932 and 1938. In those days nearly all cattle were bought and sold at fairs held on the streets of our towns and villages. The vast bulk of our live cattle exports went to Britain. Indeed, in those days almost all our big cattle were exported live for slaughtering in Britain. Everybody was very conscious of the risk of foot and mouth disease and the few outbreaks which did occur caused major problems for our live cattle traders, particularly for cattle exporters. The establishment of the Slaughtered and Detained Animals (Compensation) Fund must have been a welcome development at that time.

A number of factors have contributed to the major changes which have occurred in the cattle trade since those days. The fairs have disappeared and have been replaced by the marts. Meat factories have been established at many locations around the country. Live exports, particularly of beef cattle, have dropped fairly dramatically. Since we became members of the EC the British market has declined in importance as an outlet for our live cattle and for our meat exports. Profits for our cattle farmers have become more and more dependent on EC price support mechanisms.

Perhaps, the biggest changes in the cattle trade were brought about by the regulations which were introduced over the years in connection with the disease eradication schemes, particularly the bovine TB eradication scheme. All the developments to which I have referred were hailed as progress and great advances and great steps forward which would eliminate the problems of our cattle farmers and increase their incomes. Yet today the problems of cattle farmers are greater than they have been for years. Their incomes are falling. Their markets are contracting. EC price supports are under threat and the whole future of the cattle industry is shrouded in uncertainty.

One of the things that struck me when I read this Bill was that it was regrettable that a similar compensation fund was not established for the purpose of compensating farmers whose herds were totally or substantially wiped out as a result of TB or brucellosis problems. I am sure that every Member of this House who comes from a rural constituency is aware of a number of farmers who have suffered very severe losses as a result of outbreaks of TB or brucellosis in their herds. The amount of compensation paid to such farmers was in the vast majority of cases totally inadequate. Indeed, there are many such farmers who during the remainder of their lifetime will never recover financially from the losses suffered.

Even at this late stage I would ask the Minister to give consideration to the establishment of a fund for the purposes of compensating farmers who suffer severe losses as a result of bovine disease problems. I support the Bill before the House.

Mr. Fitzsimons

My contribution will be very brief. Many years ago I met a friend who had an unusual experience. On a visit to New York he suffered an accident and he was stabbed in an alley. He told me that a special Act was passed through Congress to compensate him. He never told me the amount of money he got but he was proud of the fact that a special Act was passed for him. This Bill reminds me of this man. It seems to me to be a very cumbersome way of dealing with a small amount, because what we are talking about here is an amount of £40,000 originally and I cannot see that this is intended to be increased in the Bill. This surprises me. Scott wrote that surprise is the result of ignorance. I must confess my ignorance in this area. If the Minister says it is necessary and that the livestock trade have requested this Bill, I accept that it is necessary and I welcome it in this regard.

I am aware of the importance of agriculture. Our exports are made up of 25 per cent of agricultural products and beef exports account for 19 per cent of this. With regard to the motion, which is coming later on the Common Agricultural Policy, beef is going to be more important in the years ahead. I recall in my youth a very serious outbreak of foot and mouth disease where the local security forces and the Army manned strategic points and I knew the disruption that took place. Some farmers suffered severe losses at that time. I understand the importance of the Bill. It is designed to compensate livestock exporters and does not relate to individual farmers. That comes under a different category.

The salary for the secretary is totally out of date and I welcome the provision to determine the amount of the secretary's salary by ministerial order and discussions with the trustee.

I welcome the Bill, but I am surprised that where such a small amount is concerned it is necessary to go through the process of introducing a special Bill. When at present a good animal could cost a couple of thousand pounds, a ceiling of £40,000 or even the amount there at the moment, £132,000 — and there is no provision for increasing this, as far as I can see — it seems unusual that a special Bill has to be passed for this purpose. I accept the Minister's assurance that it is necessary and I welcome the Bill.

Minister of State at the Department of Agriculture (Mr. Hegarty)

On the last point made by Senator Fitzsimons, it is really a safety net too. We must not forget that there could be an outbreak at some future date, God forbid, and the Bill enables the trustees at that stage to raise the levies to a realistic level. Putting it through both Houses takes time, but if that contingency arose at a later stage, that would not be the appropriate time to consider this move. Under this legislation the trustees will be able to fix realistic charges.

Mr. Fitzsimons

Is the ceiling not adjusted?

Mr. Hegarty

Yes, that can be adjusted in consultation with ourselves. That will have to be put before both Houses of the Oireachtas.

To clarify another important point, there might be some confusion about insurances. The Livestock Insurance Board was disbanded in 1983. The trade itself decided to disband the insurance board in 1983. That legislation went through this House. I will quote what was said at that time:

The current pattern of non-UK cattle trade involves a greater insurance risk and would call, indeed, for very high premiums. The exporters involved in the trade preferred to make their own insurance arrangements and so also exporters to Britain if faced with substantially increased rates of levy that would be necessary to replenish the fund. The national executive of the board saw no option other than to wind up the activities of the board.

Basically, all we are talking about now is not insurance; we are talking about the slaughtered and detained animals, animals that are held up because of disease. One of the suggestions they have is that they propose to purchase the premises they are leasing at the moment at the North Circular Road. The price is somewhere in the region of £80,000.

Senator Mullooly was worried about section 5. We have had full consultation with the trade on this section and they are happy to have that section. In the unlikely event of any irregularities, this House would have the authority to wind it up.

With regard to the question of setting up a fund for compensating for disease, we have a fairly elaborate compensation fund for TB and brucellosis. This fund is not State money, but funds provided by the trade. I would not like to ask farmers for any more money by way of levies.

Question put and agreed to.

Agreed to take remaining Stages today.