Dáil Éireann díospóireacht -
Friday, 7 Jun 1935

Vol. 56 No. 20

From the Seanad. - In Committee. Dairy Produce (Price Stabilisation) Bill, 1935.

Dr. Ryan

I move: That the Committee agree with the Seanad in amendment No. 1:—

Section 17, sub-section (1). The words "was delivered on sale" deleted in line 5 and the words "either was delivered on sale or was manufactured for some other person" substituted therefor.

This is to cover the case of an independent auxiliary getting cream churned by a central creamery. Such a case would not have been covered were it not for this amendment. When an independent auxiliary gets cream churned by another central creamery which is not in the same society the butter is sent back to the auxiliary, not for sale but after being churned, and therefore would not have been covered with regard to the levy were it not for this amendment.

Mr. Dillon

Would it not be subsequently sold?

Dr. Ryan

Yes, but in the case of a creamery the levy is collected at the point of production. Deputy Dillon is right that it might be collected afterwards when the butter was being sold by the shops, but it would be much more troublesome.

Mr. Dillon

But there is no danger of the levy being collected twice?

Dr. Ryan

No. On creamery butter the levy is collected when the butter leaves the creamery.

Mr. Cosgrave

Is there not a possibility of a charge being made for a second levy?

Dr. Ryan

No. It is in exactly the same position as any creamery after this.

Amendment agreed to.

Dr. Ryan

I move: That the Committee agree with the Seanad in amendment No. 2:—

Section 17, sub-section (1). Before the word "on" in line 15 the words "at the appropriate rate" inserted.

This amendment and No. 4 are drafting amendments. The intention is to make it certain that whatever is the appropriate rate will be charged on all creamery butter. "The appropriate rate" is put into some of those sections, but not in this case.

Mr. Cosgrave

Is the appropriate rate sufficiently defined in itself?

Dr. Ryan

The appropriate rate will be prescribed by regulation.

Mr. Cosgrave

Is the machinery for imposing the appropriate rate foolproof?

Dr. Ryan

This is a section providing the machinery for imposing the rate, but the word "appropriate" was left out. That is the point.

Mr. Cosgrave

What I am asking the Minister is whether there is a sufficient safeguard in the proposals for regulating the rate to ensure that it will be the correct rate?

Dr. Ryan

Oh, yes. This amendment is designed for that purpose.

Mr. Cosgrave

"Appropriate rate" is a rather ambiguous term.

Dr. Ryan

It has been pointed out to me by the legal side that if the words "appropriate rate" did not go in a creamery might say, "We have paid a levy," and possibly, if they contested the matter in court, the court might hold that the Bill only provides that a levy must be paid. We put in that it must be paid at the appropriate rate as prescribed.

Mr. Cosgrave

I quite understand, but the Minister will probably admit, that while the term "appropriate rate" is general, there is really no guarantee that the particular rate to which it ought to apply will be enforced. The interpretation of the term "appropriate rate" lies with somebody, but what security is there that the correct rate will be applied.

Dr. Ryan

The rate as prescribed by Order is the appropriate rate. There will be a rate prescribed by Order from time to time.

Mr. Cosgrave

There are various rates mentioned in the Schedule. Have they any reference to this?

Dr. Ryan

No.

Amendment agreed to.

Dr. Ryan

I move: That the Committee agree with the Seanad in amendment No. 3:—

Section 17, sub-section (1). After the word "proprietor" in line 20 the following words inserted:—"or was delivered on sale by such proprietor to the registered proprietor of any other premises registered in either of the said registers."

This amendment is somewhat the same as No. 1 with this difference: If one factory bought butter from another, as the section stands the two factories would have to pay the levy, one of them afterwards getting a refund. This amendment provides that the last factory which sells the butter on the home market will have to pay the levy, and not the first one.

Mr. Cosgrave

There is no danger, under this amendment, that a second levy would fall to be paid?

Dr. Ryan

No. As a matter of fact, this amendment is intended to remove that danger.

Mr. Cosgrave

And the Minister is satisfied that it does remove it?

Dr. Ryan

Yes. As a matter of fact, as the section stood we would have to collect the levy from each factory. We did that for the last three years. We afterwards made a refund in the case of the first two factories, and retained the levy only in the case of the last one. We think it is better to have an arrangement whereby the levy will be collected only from the last person— that is, the person who sells at home.

Mr. Cosgrave

The Minister is satisfied that this will obviate the other collection?

Dr. Ryan

Yes.

Amendment agreed to.

The following amendments were put and agreed to:—

4. Section 17, sub-section (1). Before the word "on" in line 25, the words "at the appropriate rate" inserted.

5. Section 17, sub-section (1). After the word "delivered" in line 29, the words "on sale" inserted.

Dr. Ryan

I move: That the Committee agree with the Seanad in amendments Nos. 6 and 7.

6. Section 19, sub-section (1). The words "levy month beginning after a specified date" deleted in line 37 and the words and brackets "month beginning after the end of a specified levy month (ending after the date of such order)" substituted therefor.

7. Section 19, sub-section (2). All from and including the word "levy" in line 48 deleted down to the end of the sub-section and the following substituted therefor:—"month which begins after the end of the levy month specified in that behalf in such order and while such order remains in force in respect of such substance or class of substance (as the case may be), and no such month shall be a levy month for the purposes of this Part of this Act."

Those amendments are for the purpose of dealing with this levy month. As the section stands at present, it is provided that no levy will be paid in respect of the levy month in certain cases. It is quite true that the Oireachtas could define the levy month as the month in which no levy is paid, but that, to say the least of it, does not look like very good English. This changes the wording so that an Order can be issued to say that after the levy month of so-and-so no levy will be paid. The amendment just changes the wording and does not make any material difference.

Mr. Cosgrave

Will the Minister explain why it was necessary to put in the words in brackets "ending after the date of such Order"?

Dr. Ryan

Practically the same wording is already in the section, as far as that goes. "... any levy month beginning after a specified date on any specified substance or substances." The specified date would naturally be the beginning of the next month. The levy month goes from the 7th to the 7th. We would not change any levy during a particular month, because that would make the collection absolutely impossible. Those words are put in here to make it clear that we collect the levy at the beginning of a levy month, or that if we are relieving people from a levy it dates from the end of the levy month in which the Order is made.

Mr. Cosgrave

There will not be a levy in the middle of the month.

Dr. Ryan

Oh, no.

Amendment agreed to.

Dr. Ryan

I move: That the Committee agree with the Seanad in amendments Nos. 8 and 16.

8. Section 39, sub-section (1). Before the word "It" in line 23 the words "Subject to the provisions of this section" inserted.

16. Section 39, sub-section (6). A new sub-section inserted before the sub-section as follows:—

"(6) Nothing in this section shall apply to or render unlawful any sale of butter at less than the minimum price under this section by the registered proprietor of creamery premises to a regular supplier of milk to any creamery or cream separating station owned by such registered proprietor, where such sale takes place under and in accordance with an authorisation in that behalf given by the Minister to such registered proprietor."

I think it might be better if I explain what No. 16 is. In the case of certain creameries which are surrounded by makers of farmers' butter, the contrast of the price is feared by those creameries. The farmer who is making his own butter for his own use does not pay any levy on that particular butter. The person supplying his milk to the creamery would have to buy butter from the creamery, if the section stood as it is, at 1/5 per lb. Certain creameries want to be relieved from the levy in respect of butter sold to their own producers, but we could not agree to that because it would lead to abuse. All these suppliers would probably take the maximum amount of butter they could possibly do with at the lower price. What we are doing here is we are exempting the creameries from taking the minimum price from their own suppliers. They have to pay the levy, but they need not charge the full minimum price to their own suppliers where they get an exemption. In the creamery areas they will not look for the exemption; it would not suit them. If they sell a certain amount lower than the minimum price they will naturally have less to pay for the milk and, therefore, they will be giving a worse return. It is only creameries in such areas as I have described that will look for the exemption; that is, creameries where there is the danger that the people will leave them and go back to the farmers' butter. It will put them in the position where we are giving them leave to sell butter at a lower price than the ordinary minimum price. I think that is the best we can do for these creameries, but I do not think it will be availed of by a large number.

Mr. Dillon

Does the Minister realise what that might lead him into? We are dealing now with creamery butter. There is no obligation on a person who retails creamery butter to a consumer to pay the levy such as there is upon a person who retails homemade butter to a consumer to pay the levy. You fix a minimum price of 145/-. Now a country shop deals in creamery butter. They buy a cow and they send two gallons of milk every day to the creamery, whereupon they may buy from the creamery butter at a price below the fixed minimum price. If they can get the butter for about 5/- or 6/- less per cwt. than their competitors, they can sell it for a halfpenny a lb. less. Surely the Minister foresees that the dangers of that are very great? You may open a whole system of price-cutting on the domestic market.

Dr. Ryan

The Deputy may not realise that there would not be an unlimited licence issued.

Mr. Dillon

Unless you are going to differentiate between one supplier and another you must lay down the general principle that if the creamery is going to give butter advantageously to one supplier, then all suppliers are entitled to the same treatment.

Dr. Ryan

But you can limit the quantity.

Mr. Dillon

But how are you going to discriminate? Are you going to give one man, say, 1lb. and another man 10lbs.? If A. B. is a supplier to Clonakilty creamery and C. D. is also a supplier to that creamery, those two men are entitled to get whatever quantities of butter they require on the same terms from the creamery; you cannot differentiate between them. If you limit the quantity of butter the creamery may sell, you immediately put into the hands of the manager the power to make quotas between his various suppliers. The moment you break through a price-fixing arrangement of that kind you are simply opening the doors to abuse. I know a firm engaged in the retail and wholesale distribution of butter that is itself a supplier of milk to a creamery in an area where there is a good deal of home-made butter sold. I know also that in that case another creamery would be very glad to get the custom of that distributor for their butter and would be very glad if he would divert his supplies from the creamery to which he is sending it to their creamery and would be anxious to offer him a consideration for so doing. Under this Bill they can claim an exemption order and offer that distributor an inducement of 5/-, 6/- or 9/- a cwt. to take butter from them and he will be able to undercut the neighbouring creamery.

So far as the Minister's legislation confines itself to the activities of creameries it is good, and I do not want anything to creep in unseen which might create a very serious difficulty for the Minister later on. I recognise the difficulties of the creameries and the way in which the Minister has sought to meet them, but the creameries may be digging a pit for their own destruction and before the Minister presses this amendment home—I have no desire to oppose it—he should satisfy himself that it is fool-proof. Personally, I think it would be wiser to leave this amendment out and bring in an amending Bill if the Minister is satisfied by experience that certain creameries are suffering. If he once opens this door, contracts will be made and he will find it extremely difficult to retrace the steps he will have taken.

Dr. Ryan

Perhaps the Deputy is not quite clear on what this amendment seeks to do. First of all, it says the licence will be in accordance with the authorisation given by the Minister to the registered proprietor —that is, to the creamery. It struck me at one time that there were certain dangers in the amendment, not the dangers the Deputy outlined. Rather vague dangers crossed my mind and I submitted the matter to the draftsman. I asked him did this mean that I could revoke this later and he said certainly, it would be authorised until revoked, so we got over this difficulty. The creamery must not supply more than a certain number of pounds per week to any one supplier. Probably 7lbs. a week could be regarded as a fairly liberal supply for the ordinary farmer. I do not think in the case of the retailer mentioned by Deputy Dillon that there would be any great inducement for the sake of getting 7lbs. of butter a week. The creamery could not afford to give him any great amount. The creamery has to pay the levy and if they are to sell butter at 1/- per lb. while other creameries are getting 140/- it would not be very advantageous.

Mr. Dillon

What is the export price, with the bounty?

Dr. Ryan

It is 100/-.

Mr. Dillon

If they could get more than 100/- from anybody at home it would be better than to export.

Dr. Ryan

I do not want to go into the details—the figures are rather puzzling. Let us take it that they get 2d. or 3d. less than they could otherwise get, The creamery could not afford to do that to any great extent, otherwise they would have to come down in their price for the milk, and in that case the producers would naturally object and make things right.

Mr. Cosgrave

Alternatively there is this proposition. The Minister frames this whole legislation on the basis that there is to be a certain price per gallon for milk. That is the sum and substance of the whole case. Now this is a departure from it.

Dr. Ryan

It is, to a certain extent.

Mr. Cosgrave

There is no doubt it is, and in so far as it affects the revenue of a creamery or its profits or the price it can pay, it interferes with the principle embodied in the Bill. There is a certain weakness in that direction, and it is open to this trouble, that you have various groups of suppliers with varying sizes of families. You have a large family requiring, perhaps, a greater quantity of butter than a small family which sends, perhaps, a greater quantity of milk, and to that extent there is going to be presented to the manager or the governing body a very difficult problem. I am not at all sure that under this clause, even though the Minister has advice to the contrary, that he can revoke. It does not show it on the face of it. There is an authorisation presented, and if they are in possession of the authorisation they can go on with it. While it is a proposal that will appeal to the individual, it goes against the principle that is embodied in the whole of the legislation. To that extent it is one of those clauses that ought not to have been inserted in the Bill. The Minister is quite aware of the fact that in connection with matters of this sort it is practically impossible to prevent favouritism or discrimination. To that extent also, there is a particular weakness. The Minister gives his authorisation but we cannot possibly check how that is being operated.

If at the end of a period it transpires that though the price of milk is 4d. and the portion of this particular section which is advantageous to a certain section of the creameries operates to bring it to 3.78d., which is an uneconomic price, then they are presented with another problem. In the circumstances, I see an extraordinary difficulty in working out this thing in a satisfactory manner. In the long run, it does not really matter a penny to the people concerned, though they may think it does, except in the case mentioned by Deputy Dillon. From the point of view of making it a popular proposition, there is nothing whatever gained except in the case I have mentioned, where the families would be very large and they may need a greater quantity of butter. In essence it is this, that whatever advantage it may appear to be to the people who get it at this lower figure, they are simply deducting it on the one hand and adding it on the other.

Dr. Ryan

I have been arguing with the creameries on two or three occasions on exactly the same lines that Deputy Cosgrave is now arguing. I realise that they did not gain anything by it but the creameries know that their suppliers think otherwise, and they are afraid of losing them if this goes in. I think very few creameries will avail of this section. The committees and managers of the creameries will keep it down as far as they can. They cannot discriminate. They will have to say 4 lbs., 5 lbs. or 7 lbs. and keep to that. I have been arguing with the creameries on the exact lines that Deputy Cosgrave is arguing here but I could not convince them.

Mr. Cosgrave

The Minister's reputation is going up. Does not the Minister think that this will mean more administration?

Dr. Ryan

I do not think so. This is a matter for the creameries themselves.

Amendment agreed to.

Dr. Ryan

I move: That the Committee agree with the Seanad in the following amendments:—

9. Section 39, sub-section (1). The word "creamery" deleted in line 24.

10. Section 39, sub-section (2). The word "creamery" deleted in line 30.

11. Section 39, sub-section (2). After the word "butter" in line 30 the words and brackets "of any special class (defined in such manner as the Minister shall think proper)" inserted.

12. Section 39, sub-section (2). The word "creamery" deleted in line 33.

13. Section 39, sub-section (2). Paragraph (c) deleted.

14. Section 39, sub-section (2). The word "creamery" deleted in line 40.

15. Section 39, sub-section (5). The word "creamery" deleted in line 49.

17. Section 40. The word "creamery" deleted wherever it occurs.

These amendments are all for the same purpose—to give the Minister power to fix the minimum price in respect of certain classes of farmers' butter, if that is feasible. At the moment I do not think it is feasible. But I have no objection to taking the powers. I see no immediate prospect of being able to fix the price of farmers' butter because it is not uniform. In the case of the lump butter or the fresh butter market we might compel the buyers to give a uniform price. Even there the quality of the butter varies. But I do not see any objection to this power being taken. For some time to come it cannot be used.

Mr. Cosgrave

The Minister has apparently come to the conclusion that no greater regimentation could possibly be conceived than is already enacted in this Bill——

Dr. Ryan

We are not finished yet.

Mr. Cosgrave

——unless the Government are going to prescribe the hours at which people will rise and go to bed.

Mr. Dillon

The Minister for Industry and Commerce has not yet taken a hand. When he begins to operate we will know where we get off. Would the Minister tell us now that he has this power, what he is going to do with the butter in Kildare? Is the Minister going to take the population of Kildare out and say: "Now, boys, pay that price or reckon with me?" Has the Minister formulated any scheme for dealing with the problem that has originated in Kildare?

Dr. Ryan

I do not know that that arises. At any rate, we cannot for the present fix the price in Athy. The problem in Athy is the same problem as in other places. There is no great co-operation between the buyers and the Department, and I do not think we will get that co-operation until the Bill goes through. That is why I am anxious to see it passed.

Mr. Cosgrave

Has the Minister registered the buyers?

Dr. Ryan

Their demand was to be registered and to be given no exemption under Section 16. That is what they asked for.

Mr. Moore

I do not think the Minister should be too sure that these buyers are representative.

Dr. Ryan

I believe that a good deal of the chaos will pass away when they are registered.

Mr. Cosgrave

Supposing the Minister finds that there are anomalies, difficulties, losses and so on, will he undertake to consider this carefully and see what can be done to remedy these matters by legislation or otherwise?

Dr. Ryan

If this legislation does not come up to my expectations, I certainly will.

Amendments agreed to.

Report of Committee agreed to.

Message to be sent to the Seanad accordingly.

The Dáil adjourned at 2 p.m. until 3 p.m. on Wednesday, 12th June.