Food Prices: Motion (Resumed).

The following motion was moved by Senator Raftery on Wednesday, 19 February 1992.

That Seanad Éireann condemns the failure of the Government and, in particular, the Minister for Industry and Commerce to ensure that savings made from the drop in prices paid to farmers for basic food products have been passed on to the consumers.

Debate resumed on amendment No. 1:

To delete all words after "Seanad Éireann" and substitute the following:

"notes the enactment by the Oireachtas of the Competition Act, 1991, commends the Minister for Industry and Commerce on the speedy commencement of the Act in October, 1991, and further notes the important proposals in the Culliton report on the development of food industry.".

—(Senator McGowan.)

Mr. Howard

I did not hear the debate last week but have read all the contributions and welcome the opportunity of coming in this evening on it. I support the motion. What is sought here is that the benefit of reduced prices for farm produce be passed on to the consumers. There is no doubt that that is not happening and that the difference in margins between the farm gate and the consumers' table is growing.

Irish farmers receive the lowest prices in Europe for their produce which is not reflected in consumer prices. Prices for agricultural products are depressed now in Ireland and farm incomes have been reduced. It is not too much to expect that when that happens, its benefit to the consumer should be insured through whatever steps are necessary. That benefit is not currently reaching the consumer.

An unjustifiable rake off is taking place in distribution and supply of food margins between producers and consumers and should be investigated. Later in my contribution I will produce figures to support my argument. First, I want to comment on the Government amendment to this motion. The wording does not attempt to address the central issue put forward in the motion.

I am reminded of remarks made by the Taoiseach recently on his election when he spoke about frank and open Government. That promise finds no expression in the amendment before the House. It would be better for all concerned, and certainly for Irish consumers, had the Government parties approached our motion with an honest admission of its validity and proposals. Instead we get a waffling amendment, referring to two planks of this amendment — the Competition Act, 1991, and the Culliton report on the development of the food industry. The Competition Act has been in force for some time and the position of consumers has not improved since the enactment of that legislation.

The proposals in the Culliton report are a long way from implementation; if Irish consumers are waiting on the implementation of those proposals to benefit from the reduced prices farmers are obtaining for their produce they will be waiting a long time. For the Government to seek refuge as it were from this motion on two such flimsy arguments is to opt out of their responsibility and to neglect the interests of the consumer. The amendment avoids the clear and implicit purpose in the motion before us.

By asking the Seanad to reject the motion the Government are ignoring their duty to ensure that the benefits of lower farm gate prices are passed on to consumers. The figures I intend to use to support my case are provided by the Central Statistics Office. In the five years 1985-90 cattle prices dropped by 10 per cent yet the price of beef to consumers was 18 per cent higher in 1990 than it was in 1985; milk prices increased to the producer by 7 per cent in 1985-90, yet the cost of butter and cheese to the consumer increased by almost 40 per cent; cereal prices remained roughly the same in 1985-90, yet the price of bread to the consumer increased by 25 per cent. During the 15 years period between 1975-89 comparing the ratio prices between what farmers received and what consumers paid over a range of products, marketing margins increased by almost 30 per cent.

I will highlight some of these instances. Pigmeat price margins went up by 56 per cent. The margins on lamb increased by 46 per cent, on steak by 32 per cent, on eggs by 33 per cent and on liquid milk by 38 per cent. If the Minister and the Government parties want to refute the motion, let them refute these figures first; the argument stands or falls on their accuracy and validity. A week ago contributions were made by Members representing the Government side of the House from counties as far apart as Donegal and Kerry, who spoke of local situations which do not give the national picture and do no refute the figures I have quoted here.

In Britain liquid milk sold in supermarkets is 11p sterling per litre cheaper than the doorstep delivery price. If that price differnce were applied here it would save the consumer £20 million per annum. Therefore, given clear evidence of producers receiving reduced prices from which the consumer has not benefited, I find that the Government decision as implied in their amendment, is a refusal to face up to a situation that needs to be rectified or else a pretence that the position I have outlined is not correct. Even if they admit that it is correct, it appears that they are not prepared to take action to resolve it.

The Competition Act, 1991, has been in operation for some months; no attempt was made by speakers on the Government side to indicate if it had in any way improved the lot of consumers. It has not. In relation to the development of the food industry as outlined in the Culliton report, I submit, that it has nothing to do with ensuring that the consumer receives the benefit of lower farm gate prices.

I refer the House to the fact that we are faced with the reform of the Common Agricultural Policy. That will result in significant cuts in farm prices and on the performance to date we cannot with any confidence say that the benefit of these reduced prices, no more than the reduced prices we have had over the last few years, will be transferred to the consumer. This motion which my party put down in good faith deserved to be accepted on its merits and if there was an argument to be made against it, it should have been a factual one. The content of the motion cannot be rejected without rejecting the figures I have quoted here which is impossible for the Government since the figures were obtained from the Central Statistics Office. I strongly recommend our motion to the Seanad.

Mr. Dardis

May I join with other Members who have welcomed the Minister and wish her well in her portfolio, which I am sure she will execute with the expertise and efficiency she has brought to all the offices she has held.

Mrs. O'Rourke

I have some learning to do but I am willing to try. Thank you for your good wishes.

Mr. Dardis

The Progressive Democrats oppose this motion and we are in favour of the amendment. I accept the premise that farmers's incomes have fallen over the past two years together with prices received by farmers at the farm gate. I know most Members of this House are aware of the depth of the problem in rural Ireland caused by those factors and that many people are living in silent desperate poverty as a result, a poverty as debilitating as any other in society.

I do not dispute those facts but I dispute the suggested close connections between that situation and the price of food on supermarket shelves, and there are grounds for argument there. Senator Raftery, when he opened this debate, presented a range of statistics which have since been repeated, most recently by Senator Howard. We all know about statistics. I would never accuse Senator Raftery or any Senator of telling lies but certain effects can be achieved with statistics which might not always be a correct representation of the truth.

Mr. Howard

Was I wrong?

Mr. Dardis

I do not accuse the Senator of telling lies. We will come to the question of whether the statistics are right or wrong. If they are true and if the farmers, share of the market price is falling, which is arguable, the reason is simple. The Irish consumer or the Irish marketplace does not determine farmer prices; intervention determines them. The Irish marketplace has a minor impact on what Irish farmers receive given our dependence on intervention and the high proportion of Irish produced food exported. Factors other than the Irish marketplace need to be examined when we look at farmer incomes.

The dependency of the farming economy and farm prices on intervention has been unhealthy; but it is also certain that intervention payments are a diminishing part of farmers incomes. Senator Raftery and his colleagues, when we debated matters such as GATT and Common Agricultural Policy, made similar statements.

Intervention is increasingly becoming less rewarding and under Common Agricultural Policy and GATT we will move further away from intervention and allow the marketplace to determine farmers' incomes. In those circumstances, I am confident that measures such as the Competition Bill, to which the Minister referred in her address to the House, will have precisely the effect Senator Raftery and his colleagues wish for.

A great deal of reference has been made to the Culliton report, and I agree with many others that it is an excellent document and that it charts the way forward in industrial policy for the food industry. However, there is a significant table in the appendix to the Culliton report which shows the Irish share of EC beef production versus the Irish share of EC subsidies for beef. In the years 1988, 1989 and 1990 the beef production share was 5 to 7 per cent, whereas in 1988 our share of the subsidies was about 33 per cent. This share went down to about 20 per cent in 1989 and it rose to somewhere around 25 per cent by 1990. That bears out my argument that it is the intervention system, the support system of the European Communities, not the Irish marketplace, which is determining largely, the prices received by Irish farmers.

Apart from the intervention argument, there are other reasons the proportion of the market price received by the farmer may not reflect market movements in Ireland. One reason is the high proportion of Irish food exported. The Minister underlined the importance of the food industry to the Irish economy when she said that it accounted for 10.5 per cent of gross domestic product, 14.5 per cent of employment and 25 per cent of all exports. Our reward to farmers is eroded by the quantity of our exports. I think the benefits to Irish consumers from the reform of the Common Agricultural Policy and changes as a result of the GATT are questionable. I think it is correct to say that Senator Raftery in the debates on the Common Agricultural Policy and the GATT made this point also, that Irish consumers consume such a small proportion of all Irish farm produce that consumer benefits will be exported to consumers abroad and will not significantly affect Irish consumers.

I come now to figures for the period 1975 to 1989 for the ratio between farmer prices received and consumer prices paid over a range of products. I do not find these figures surprising. During the term of the Fine Gael-Labour Coalition Government, levels of inflation rose along with costs, interest rates and so on and we look back at them now in horror. Is it surprising that the people handling these products when faced with increasing labour charges, increasing fuel bills, increasing wage rates, increasing everything, had to recover their costs from the marketplace? Is it then any wonder that the proportion which the farmer was receiving from those markets fell? Farmers too, had to endure these price rises and I know from personal experience what it was like to farm through that period.

In a previous incarnation I once had to trace chrysanthemums from Rush to Dawson Street during the Christmas period. We took a typical box of chrysanthemums and began in Rush where they were produced. We went to the producer and found out what he was paid. We went through the stages of the Dublin wholesale market, to the van man and finally to one of the premier flower shops in Dawson Street where we found that the markup on a box of chrysanthemums was 330 per cent from the farmer to the consumer in Dawson Street. I am confident that every person involved in that chain could argue a valid case as to why their particular cut out of that 330 per cent is not excessive.

Mrs. O'Rourke

The former Taoiseach says he is going to grow chrysanthemums.

Mr. Dardis

If the former Taoiseach decides that he is going to grow chrysanthemums I would recommend that he acquire a flower shop in Dawson Street.

Under the Competition Bill producers have recourse to court if they feel that competitive practices are not being operated fully and it is also significant that the Restrictive Practices Grocery Order, 1987 was retained when that Bill was introduced. I was in favour of retaining that order because of the effect its removal would have on small country grocers who fulfil a valuable social function and cannot operate on the same terms as large supermarkets.

There is a ban on below cost selling as a result of the retention of the grocery order which has been a serious problem for producers. "Hello" money remains a problem and the State must intervene to some extent to modify the consequences of a totally free market, particularly when the market is dominated by large supermarket chains. The Minister is aware of those things and his record shows that he is prepared to take on these strong vested interests. He has addressed the dangers of concentrating the food processing industry in individual hands, and I applaud him for that.

The solution to these difficulties is in the hands of producers and farmers. Good guidelines for the food industry are included in the Culliton report. I have said many times on the Order of Business that we must debate this blueprint report in full in this House, and I hope that will happen before long. If it is a priority of the food industry, as I am confident it is, to add value and to improve the price received for the food exported, then we must maintain the proportion which the farmer receives out of that and increase it if possible. Means to this end are available and should be used more widely, such as the producer group idea which has not been exploited fully and could bring benefits through joint venture and unified activity.

The more people who can make a living out of our food industry which is going to become increasingly important as intervention payments recede the better for our society; and I include farmers, processing industry workers, co-op workers and the shop-keepers. If we can go on from there to exploit our undoubted capacity for a green image and for high quality food, then we will have done a good day's work. Irish food was never better value or of better quality; excellent products are available on supermarket shelves and that is the way forward. The consumer will benefit if we attend to the items included in this report, and for that reason I and my party support the amendment.

Mrs. Jackman

I welcome the Minister of State, Deputy O'Rourke to the House. I was disappointed she did not retain a full Cabinet portfolio having seen her perform exceptionally well in Education, and we saw signs of her input in the budget as Minister for Health. I know she will make a marvellous job of the new portfolio for which she is eminently suited. The concept of front of house image and marketing is a challenge which will be enormously satisfying for the Minister and I wish her every success.

Mrs. O'Rourke

I thank Senator Jackman and appreciate her remarks.

Mrs. Jackman

I am glad to support the Fine Gael Private Members' motion and the input of Senator Raftery. I too am concerned about the ever increasing gap between prices paid to the farmers and consumer prices. Women, particularly, who are the principal shoppers are aware of the high prices consumers pay for Irish produce. I refer not to luxury items but to basic dietary products, such as liquid milk, eggs, bread, potatoes and meat, all essential products for good health.

During the debate on the Common Agricultural Policy and the GATT in this House it was revealed that Irish farmers get the lowest prices in Europe for their products; this is not parallelled by proportionately lower prices, for the consumer. As motorists, we know when oil prices increase we pay more for our litre of petrol and when it drops, we pay lower prices for our petrol. We know there is a tax element taken by the Government, but outside of that we are very much aware of what it costs to fill the car tank

We are not conscious of the same drop in price when it comes to food products. What prompted this motion, which was initiated by Senator Raftery, was the realisation by consumers that the price paid to the farmer is continually declining and that the distribution and retail sectors have increased their margins. These facts have been stated by various Senators. The products we are talking about are consumed on the domestic market, particularly milk, pork, bacon and wheat products. Perhaps there is a higher export value in beef and lamb but we still eat beef and lamb here.

Farming organisations believe that consumption levels in the domestic market will increase considerably if consumers are given a fair deal. I suppose one area we are very conscious of is the drop in the consumption of butter. When spreads appeared on the market, straightaway people went for the very clever marketing of spreads. This led to a reduction in the consumption of butter. Other EC countries did not follow suit. I read in a newspaper the other day that the Germans consume an inordinately high percentage of Irish butter, much greater than we do at home. We, the consumers, must see what is best for us and should not be taken in by glossy brochures and extremely sophisticated advertisements that say we will look better and be slimmer if we keep spreads and forget about butter. There were slim people when they ate nothing but butter. It is a question of moderation. As consumers we must be very vigilant.

I do not propose to repeat statistics already mentioned, but farming organisations spend a lot of time compiling statistics. I will refer to the method of analysis in relation to the whole cycle, where the farmer sells milk and the consumer buys it in its processed form as butter or cheese and where the farmer sells cattle and the consumer buys steak. The approach adopted by one farming organisation was to look at the price ratios between the primary products sold by the farmer and the food products purchased by the consumer. They stated that they used the Central Statistics Office national average retail prices published quarterly, so those statistics are up front. They also used the CSO's agricultural prices providing monthly data and their agricultural output tables giving annual data. People talk about statistics but regardless of what anybody says, prices to the consumer are increasing at a time when they are dropping to the producer. We must ask about the middleman.

All we have to do is to look to Third World countries and we see in an exaggerated form what happens to their produce. To an extent, I see the farmer in the same category as the Third World producer. The consumer does not get value and we must ask why.

The price of beef is prohibitive. We hear farmers at marts agonising over the drop in beef prices and yet in supermarkets we are still paying high prices. I believe consumers must be aware of this and must continue to be vigilant.

Take the statistics in relation to beef. There are three representative cuts of beef — round steak, which is cheaper, sirloin and rib steak. Taking round steak as an example, let us look at the 1975 figures because there is no point looking at recent figures only: the price of round steak was 1.45 times the price of heifers in carcase weight, in 1989, round steak prices had increased to 1.89 times the price of heifers and in the first half of 1990, round steak prices had increased to 2.06 times the price of heifers. For the three cuts of beef, the average increase in the markup between 1975 and 1989 was 32 per cent and between 1975 and 1990, 46 per cent. These are reputable statistics.

Looking at recent trends, that is, comparing the first half of 1989 and 1990, it is seen that the markup for round steak increased from £1.76 in February 1989 to £2.10 in February 1990, an increase of 19 per cent, while the markup in May 1989 to May 1990 increased from £1.67 to £2.01, an increase of 20 per cent. This is explained by the fact that although heifer prices fell by 15 per cent in the 12 months to February 1990 and by 16 per cent in the 12 months to May 1990, beef prices to consumers actually increased. These are the facts.

In her presentation, the Minister stated that much has been done in the consumer affairs area, but are extra staff needed? The consumer can only check the prices and moan but at the end of the day unless the Office of Consumer Affairs has an effective monitoring system, all we can do is shrug, wave our hands in the air and continue to complain. There must be strict monitoring to ensure that the price increases paid to the middleman are kept in line. At the end of the day the consumer must be protected. Something must be done to ensure that too much is not creamed off by the processing sector, as was stated by Senator Raftery, and in the marketing and retail areas. I know the Minister is concerned that consumers be protected. I hope we will see a drop in prices and I look forward when next I shop to a drop in milk prices.

I was surprised when Senator Raftery told me that in Britain if one gets a door-to-door delivery of milk one pays more for it than if one gets it off the supermarket shelf. In my area I have not seen door-to-door deliveries for the past ten years, so we are not even getting the service. I look forward to a drop in the price of milk to the consumer and an increase in the price of milk to the farmer, likewise for beef, eggs, bread and so on. At the end of the day, the consumer must be looked after.

Mr. Farrell

Fáilte mór roimh an tAire Stáit agus comhgháirdeas. I am sure, as with the other portfolios she has held, she will handle this portfolio in an expert and excellent fashion. The Minister comes from a good family who have wide experience in farming, business and teaching and I have no doubt that her background makes her such an excellent Minister.

I support the amendment. The motion is worth while. Statistics show there is a need to tighten up on the share of profits to middlemen. In reality, that is not always so. I remember when the late, internationally known, Fr. McDyer of Glencolumbkille tried to bridge the gap between the producer and retailer. He set up 22 co-operatives which were involved in activities ranging from growing rhubarb to producing pedigree cattle. One co-operative he set up was involved in vegetable production in Glen-columbcille. I was involved in the "Save the West" campaign in 1954 and saw all the work he did there. That was what motivated me to work in my own area around Grange. We set up a vegetable factory in north Sligo at that time also. Fr. McDyer sold carrots in the first enterprise at four pence a pound. He did some market research and discovered they were selling at 20 pence a pound in the shops in Sligo. He had samples of the vegetables in the boot of his car which he showed to the shopkeepers who said the quality was good but the vegetables would have to be washed, graded and packed. Fr. McDyer bought new machinery and set up a grading and packaging plant. However, when he had them delivered in Sligo and other areas, he discovered he was better off taking four pence a pound for them as they were growing in the field.

One of my first jobs after my accident was delivering milk in Sligo town. I was delivering grade A milk. Milk at the time was a shilling a gallon in the creameries — in pre-decimal currency — and I was delivering milk at 7½d a pint or five shillings a gallon, a huge difference in price. The owner of Ardgarmond Dairy did not become a millionaire despite his best endeavours because he had to produce milk all the year round, not just in the grass period. The man who sent milk to the creamery produced it off grass without any overheads. He did not have to buy expensive cows and keep up production. He did not have big meal bills. Many tests and regulations governed the production of grade A milk. Elaborate milking equipment was necessary and the milk had to be cooled to a certain degree.

I became an agent and was the first to bring pasteurised milk into Sligo. If I left a bottle of pasteurised milk outside a door when I was short of grade A milk there would be a note on it the next morning saying the children would not drink it. One could not give away pasteurised milk at that time. Now one could not give away grade A milk. Everyone wants pastuerised milk. It shows how things have changed since the 1950s.

The price of a product at the farm gate accounts for 20 per cent of the total cost. If a shopkeeper buys in a ton of potatoes he is lucky if he sells 18 cwt. of them. There is always wastage. Everything is prepacked now but this costs a lot of money. It is not as simple as it seems. There are many people involved between the time a product leaves the farm and reaches the housewife's table. Fr. McDyer thought he cut out the middlemen but it did not work then and it will not work today.

I am glad Senator Jackman mentioned butter. I always thought it was wrong for creameries to import vegetable oils to produce spreads. It was against agricultural production. They should not have done it. I am pleased that North Connaught in County Sligo is the first creamery to produce a spreadable 100 per cent low fat butter. It is being marketed nationwide and I sincerely hope it gets a good response. It had a huge response in the west. There is no doubt that it is 100 per cent butter.

We have the cleanest and greenest vegetable shops in the world but we are talking about a small market. The biggest market is in beef, bacon, and milk products. A large amount of that goes into intervention or is sold on the markets in the EC.

I take this opportunity to say fáilte agus comhghairdeas to the Minister. This is the first visit of the Minister of State, Deputy Ahern to this House and I am delighted to see him here. It is good to see new blood coming through the system and I have no doubt he will be a very good Minister.

The Competition Bill went through the House and it will take care of any irregularities that may arise with regard to overpricing. The worst thing that ever happened was the advent of supermarkets. People thought they would save money by buying in supermarkets but they buy items they do not need to avail of the "three for the price of two" bargains. They might only want one item, but buy three and two will probably go to waste. Supermarkets have destroyed small shops in rural areas. Good stores in rural Ireland provided a service down the years and created a market for home produced goods because they bought from the local farmers. There was a trade in every village that the supermarkets destroyed. People were put out of work and that is one of the reasons for the depopulation of rural areas.

Supermarkets are supposed to give the housewife better value, according to their advertisements, but, unfortunately, they import many foodstuffs. For example, one will see sweet cake from Denmark and other European countries, but our bread and cakes are as good as those produced in any country. It is a pity supermarkets are not more patriotic and do not sell more Irish produce. They say they will, but only if they meet their standards. If a person wants to do something he can find six good reasons to do it; if he does not want to do something, he can find ten reasons not to do it. I do not think supermarkets are the blessing we were led to believe. Maybe I am biased but I believe they destroyed shop-keeping in rural areas. People do not take into account what it costs to drive their car into say, Sligo. Often times, they buy what is not really needed, whereas, in the olden days, they went into a shop and bought what they wanted.

There are many different cuts of bacon and meat but I do not see any butchers becoming millionaires. As a matter of fact, many of them have gone out of business. They cannot have their own abbatoir because it costs too much and they have to buy meat from a meat factory. Vacuum packed meat is all lean meat and a lot of meat which is being cut away was sold in years gone by. There is no fat on the meat being sold now and there are no bones in meat sold to the customer.

Years ago, people liked to get a bone and a bit of marrow. They used to say it made better soup, but the day of making soup is gone. Even in the hotels they use packet soups. I do not know whether boiling beef is sold now. As far as I can see, there is only stewing steak or roast. There is only so much top quality meat in an animal. A great deal of what I said will apply to bacon. Some rashers are from the belly of the pig and, naturally, are not as good as back rashers and although they are cheaper, people will not buy them.

It is easy to talk about statistics but statistics can prove anything. We must deal with hard facts. Food is cheaper here now than in the North. People come from Northern Ireland to Ballyshannon to buy food, clothes and shoes. If commodities are cheaper here than in Northern Ireland, we must not be over-charging. Our prices must be reasonable.

Mr. McDonald

I take this opportunity to offer my best wishes and congratulations to the new Minister of State for Science and Technology and wish him well. I had the pleasure some years ago of serving in both Houses with his late father. I wish the Minister every success in his career and in the important post with which he has been entrusted.

I support the motion. Many salient points were made in this debate but to those of us who are close to the farming economy and the farming industry, it is evident that there are retracting profit margins in agriculture, restrictions in production and ever-increasing price inputs for services. More importantly, it is clear that farmers are producing top class produce, including a very high percentage of organic produce. There has been a drop in the sales of artificial fertilizers. The quality of our produce in improving all the while.

Unfortunately, as the price paid to the primary producer is decreasing, as has been very clearly pointed out, a corresponding reduction is not being passed on to the consumer. I do not know what the Government or the Minister can do about that. In a free society, it is not ideal to look for price control but there must be some way to control the larger supermarkets chains who seem to constantly strive for preferential price concessions in addition to fairly lengthy credit periods from the co-ops and plcs. It is all right for the rich to get richer but it is evident that small farmers feel the pinch and the last year or so have been very difficult for them. One has only to look at the queue of none too happy people waiting to approach their bank manager or being invited in for discussions.

I note the Taoiseach has appointed a new Minister with responsibility for rural development. Perhaps the Government might look at the possibility of reintroducing farmyard husbandry, something many of us were reared on before the battery hens and factory-type production units came into vogue. Other ways of creating a family farm income must be reintroduced. If organic products were brought in, for example, the production of eggs or chickens there would be a market for them. I see no reason high quality produce should not be able to command a premium price.

I know that for decades farmers have been in the habit of complaining that one year is worse than the other but nevertheless the facts speak for themselves. In opening this debate last week Senator Raftery very clearly demonstrated the huge discrepancies that exist, and showed that, as far as Irish agriculture is concerned, the graphs all point in the wrong direction. I do not know what the Minister for Industry and Commerce can do about this but it is time the problem was brought to the attention of Government.

The fact that Irish farmers get the lowest prices in Europe is not reflected in the price of food to the Irish consumer. Comparisons of food prices across the Community are difficult but we can see that the consumer in Northern Ireland and England gets better value on most items. At the same time, their farmers get better prices. When prices to our farmers go up it is reflected immediately and totally in consumer prices, but when prices to the farmer drop there is a time lag in the fall in food prices and the drop is never fully reflected. Amidst all the fluctuations in prices there is one disturbing underlying trend, namely, that the proportion of what the consumer pays that goes to the farmer, is in continual decline. The margin to the distribution chains appears to be on the increase all the time. The Minister, if he does not have power at present, should look very seriously to see how the balance can be maintained.

Looking beyond next year, if we want to maintain the maximum population here in gainful employment we must look not just at the small farming industry and try to maintain the numbers on the land but also at the small family-type entrepreneur, to try to provide increased employment opportunities in small family run businesses. That is the only way we can meet competition. There is no point in producing anything unless it is of the highest quality, produced to the most exacting standards so that we can compete with the best anywhere in the world.

The environment is extremely important. I agree with Senator Farrell who was decrying the fact that many of the large co-ops were importing vegetable oil to include in a butter mix. I agree with him because vegetable oil should only be used for energy purposes. It is time we started growing more of it here as a non-food crop because energy is perhaps the only area where the Community is not self-sufficient. I note that both the German and French Governments have undertaken not to tax agricultural crops grown for energy purposes. Perhaps the farming organisations and the Minister for Agriculture and Food might look at the possibilities in that area. All it would take would be for the Government or the EC to allocate the set-aside subsidy for non-food crops over the next couple of years. It would introduce a new industry or revive an old industry in this country.

To refer to the motion before the House, if we take a few examples over a five and a 15 year period, using CSO figures, it is easy to see that the consumer is getting less than value for money and that trade is taking an increase in their margins. Comparing 1985 with 1990, we find cattle prices were 10 per cent lower in the autumn of 1990 than they were in 1985 but beef prices to the consumer were 18 per cent higher. This bears no relation to the cost to the farmer for finishing cattle. Milk prices in 1990 were 7 per cent above the 1985 level but butter and cheese prices were almost 40 per cent higher than in 1985. Cereal prices were roughly the same in 1985 and 1990; yet, the price of bread was roughly 25 per cent higher in 1990. It is not sufficient for the Minister for Industry and Commerce to say that there must be a free market or that he is not interested. He owes it to the primary producers to ensure that the farming industry can continue and that people can go on producing top quality products in the knowledge that they will get a fair and economic price.

If agricultural incomes fall and the industry is in difficulties the creditors or banks will press for their money. Everybody feels entitled to be paid the last shilling except the person at the bottom of the ladder who is dong the work. If there is a depression in the agricultural industry no one seems to feel they should share the burden. There is a reluctance among young farmers to take on traditional farm holdings at present. Many of them are emigrating. You have only to drive through any part of the countryside to see the demographic trend going, unfortunately, in the wrong direction. That is frightening. At present the future prospects for young people taking on, working or inheriting a holding, are not bright. They cannot see an income or a decent and acceptable standard of living emanating even from very hard an intensive work. I do not know what the Minister can do but I hope he will at least give a guarantee to the House that the problem will be examined in depth, and that some proposals will come forward to help stabilise the situation and to return to enhanced profitability especially to the primary producers.

I would like to put forward a few figures which more than adequately demonstrate the necessity for this House to pass this motion tonight. Taking the 15 year timescale, 1975-89 and comparing the ratio of the prices the farmers received with what the consumer paid over a range of products, we find the marketing margin increased by over 30 per cent. The meat marketing margins increased most, steak went up by 32 per cent, lamb by 46 per cent and bacon or pork by 56 per cent. The marketing margin increases for other items were: liquid milk 28 per cent, cheddar cheese 26 per cent, butter 11 per cent, bread 18 per cent, and eggs 33 per cent. We need to be more vigilant about prices. Competition is not always a sufficient safeguard especially when the bulk of the grocery trade is controlled by a very small number of companies. I hope the Minister will take an initiative to safeguard the future, not just for the primary producers, but to give the consumer the benefit of the changes and the cuts which will arise in the reform of the Common Agricultural Policy over the next two or three years.

The quality of Irish farm produce is improving significantly. More and more people are going into organic food production, which seems to be welcomed by many consumers.

I support the motion. I hope it will be possible for the House to support it and that the Minister will be able to introduce some measures to ensure that the consumers get a fair deal.

Professor Raftery

May I begin by welcoming the Minister to the House and congratulating him on his promotion. I wish him well in office. We are feeling rather elated in Cork as we now have a senior Minister and two new junior Ministers. Before we get carried away, however, we should remind ourselves that there are more Government Ministers in Salthill than in the whole of Munster: two senior Ministers live there and one floats between Salthill and Dublin. However, having said that, I want to come back to the motion before the House.

The time is opportune to consider this motion in the House. We all know of the proposals for reform of the Common Agricultural Policy: We all know of the GATT negotiations and we all know that no matter what the outcome may be it is certain to result in very significant drops in prices for the farmers. Regrettably — I regret this sincerely — these moves are initiated and fully supported by an Irish Commissioner. Having said that, we must ensure that whatever drop occurs in prices to the farmers is fully passed on to the consumer. If the consumers do not benefit, and the farmers lower prices, the country loses out in both directions.

I have put my arguments here about the drop in prices to farmers and the lack of reflection of that to consumers over a five year period and over a 15 year period. I heard the other side of the House address anything and everything in relation to the food industry except the actual motion, which essentially says that the consumers are not getting the benefit of the lowering of prices to the farmers.

We had a lesson from the Minister about the importance of agriculture and the food industry in the economy, about the percentage of the workforce employed in agriculture and in the food processing sector, about the percentage of GNP which is contributed by agriculture and so on. We had a lesson from Senator Dardis on the percentage of our products going into intervention and various other issues, but none of them addressed themselves to the issue. The margin going to the trade is increasing, the price to the farmer is falling but the price to the consumer is not falling to the same extent. I agree with Senator Dardis that consumers today have a greater range, higher quality and lower cost food available to them now than at any time in history, but that is not the issue. My point is that food should be even cheaper as a consequence of the very significant drop in prices to farmers.

Senator Dardis went off on a tangent. I can forgive the man. He is a successful farmer but he has to defend his leader, the Minister for Industry and Commerce. He must be doing it very reluctantly in this situation. He talked about irrelevant issues such as inflation under the Fine Gael Government. He seems to have missed the point. When Fine Gael came into Government inflation was 22 per cent; when Fine Gael left Government, it was under 4 per cent. He also missed the fact that from 1977 to 1982 some other rather peculiar things happened in the economy. For instance, in 1977 we had the lowest energy, transport and communications costs in the Community. Five years later, as a consequence of certain policies which were supposed to give us full employment, we had the highest energy, transport and communications costs in the Community, significantly higher than in any other country. That is what the Deputy Garret FitzGerald Government inherited in 1982 and Senator Dardis seems to think it was the Fine Gael-Labour Government of 1982-87 who caused these problems.

Senator Dardis also talked about chrysanthemums and a mark-up of 300 per cent. I think that is making my point, although chrysanthemums are not a food product. Senator Farrell also reinforced my point when he talked of the farmers getting only 20 per cent of what the consumer is paying.

I do not want to go back over more statistics, but my statistics have not been refuted. The reality is that the farmer is getting a declining percentage of what the consumer pays while the trade is taking a growing percentage. I do not think this is acceptable and in certain areas it is equivalent to a rip off, particularly in the retail price of liquid milk in supermarkets. As I said, if we had the price difference between the supermarket and doorstep delivery they have in Britain, 11p sterling per litre, it would save the consumer roughly £20 million per annum. That is not to be sneezed at. This figure has not been contradicted by anybody I know of, anywhere, nor have any of my other figures. Instead, the Government side went off at a tangent talking about the Culliton report which has not yet been discussed or adopted in either House of the Oireachtas, and about the Competition Bill which was introduced in 1991. I am, in fact, talking about the periods 1975-90 and 1985-90. The lesson to be drawn from the experiences of that period is that unless we are more careful, the consumers will not get the full benefit of the reduced prices to farmers when the Common Agricultural Policy reforms come in and the GATT negotiations are completed.

For these reasons, I urge the House to support the motion. The amendment is irrelevant in this situation. I hope that in the years ahead all Senators will support me in trying to ensure that consumers get all the benefit from the fall in farm gate prices.

Amendment put.

The Seanad divided: Tá, 27; Níl, 14.