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Dáil Éireann díospóireacht -
Wednesday, 18 Nov 1942

Vol. 88 No. 16

Exported Live Stock (Insurance) Bill, 1942—Second Stage.

I move that the Bill be now read a Second Time. The Exported Live Stock (Insurance) Act of 1940 came into operation on the 2nd September, 1940. It applies to cattle, sheep and pigs. There is a compulsory insurance scheme for these animals when exported through any of our own ports, but it does not apply to cattle shipped through the Six Counties. Before that Act was passed, exporters had to seek insurance from various companies and, as far as we could gather, at that time the premiums charged ranged from 40/- to 67/6 per cent. per £100 value of the animals being exported.

A board was set up under that Act, consisting of eight members, seven of whom represented the cattle and sheep trade, with one representative of the pig trade. That board has been extremely successful in its operations. It commenced business by imposing a levy of £2 per cent. on the value of the animals exported. It reduced this to 30/- on the 30th January, 1941. There was a further reduction to 25/- on the 1st November, 1941. It was reduced again to 20/- per cent. on the 25th January, 1942; to 15/- on 1st May, 1942, and to 10/- per cent., which is the present figure, on the 2nd November. At the present time they have £187,000 in the funds of the company, if you can call it so, or the committee, and they have paid out claims during their tenure of office to the extent of £85,000. They collected during that time something approaching £300,000.

We may assume that if this arrangement had not been brought in, and if they were insuring with private companies, the premiums would not have been reduced to the extent that they have been, and I would not be exaggerating if I say that, as a result of this scheme, the cattle trade has been saved about £250,000.

The Act applies only to exports through our own ports, but there are some exporters who live along the Border, particularly those who live in the north-west, who find it inconvenient to export through any of our ports and who would prefer to export through Derry and Belfast, as they always did. This Bill seeks to apply the scheme to cattle, sheep and pigs exported through these ports or through any ports in the Six Counties. As I have said, the number of persons on the board is eight. That will be enlarged to nine so as to give a representative to those who will be coming in under the proposed scheme.

I have taken the opportunity in bringing in this to bring forward certain amendments to the Principal Act, which have been found from experience to be necessary. For instance, under the Principal Act, the valuation of the animals was left entirely to the exporter. Some exporters have been more or less evading the spirit of the Act by putting ridiculously low values on the animals going out. Under this Bill it is proposed to give the board power to fix minimum values on various classes of animals. Another point that requires amendment is this. The decision of the board of assessors who are set up to investigate a claim is final the moment it is given. I believe it is feared—if it has not already happened—that it may happen that some valuable piece of evidence would not be available at the time they were giving their decision and the Principal Act is being amended so as to give the board of assessors power to re-investigate a claim for compensation within three months, and their decision then will be the same as if it were a decision in the first instance.

Arrangements will be made when this Bill is enacted to have the necessary stamps for export issued at convenient centres. There is also an amendment to Section 18 of the Principal Act, which makes clear the point at which the insurance begins to operate. There appears to have been some doubt in this matter; in fact, there was a court case. There was, however, some doubt, and it is made clearer under this Bill that the insurance will operate from the time the animal is put on board ship. Finally, the Bill, as drafted, has the approval of those interested in the live-stock trade.

On behalf of the producers and the cattle trade generally, I welcome this Bill. Everybody in the trade welcomes it. It is a great boon to the producer and to people who ship cattle. I should like to say that the scheme has been run in a very creditable way. Before the Act came into operation, it cost from 10/- to 12/6 a head to insure animals that would be valued at £25. The board has worked this scheme so well that at the present time you can insure a beast valued at £25 for half a crown, or a quarter of what it originally cost. It looks as if in another year or so no insurance at all will be necessary, there will be so much money available. All the people connected with the trade will. I am sure, welcome this Bill, but I think that it would be advisable to amend it in some respects. A large amount of money has accumulated because the board have managed the scheme so well. I am told that last year they paid over £19,000 in claims. Then they managed things so well that they salvaged practically all the £19,000—they got it all back with the exception of about £4,000. I think that is an excellent tribute to their management.

I think there should be some provision inserted in the Bill to prolong the life of the present board. They have experience of the scheme and they have succeeded in accumulating a very handsome reserve. In such circumstances, I think it would be advisable to prolong their existence because no one knows what type of board would succeed them. We had experience of one body that remained in office for at least ten years and it carried out its work so well that there was no need to insure cattle. They accumulated a fund that has been lying there for the last eight years. I think the Minister should give serious consideration to the idea of prolonging the life of the present board, so that there will be no danger of a fresh board coming in, say, two years from now and perhaps not carrying out the scheme so successfully as the present board has done.

The people in the North of Ireland are of the opinion that this measure will be a great boon to them. It will probably help to swell the fund still more. I should like the Minister to consider the point with a view to seeing if there is anything in the suggestion that, with all that money there, certain people may get on the new board, and, as a result of mismanagement, do away with a lot of this money. Many people in the cattle trade seem to think it might be advisable and they asked me to mention it with a view to finding out whether it would be a feasible or wise step.

I wish to welcome the Bill and also to express my appreciation of the advantages of the old board to the agricultural community. Naturally, when dealing with export, when you can bring down the overheads, as was done in this case in relation to insurance, the advantages go to the producer indirectly. I am very pleased to hear—it is very cheering news—that the members of the board have managed their business so well that they have now a substantial reserve.

I am also pleased to note that some of the amendments embodied in the Bill are designed to set right the position regarding the insurable value of animals. In expressing my appreciation of these amendments, I am also expressing the appreciation of members of the present board whom I happened to speak to. It seems that, formerly, a few, a very few, individual exporters took advantage of the position regarding the insurable value of exported cattle, and that, instead of basing the insurable value on something like the real value, they merely insured cattle on the basis of a few shillings per head instead of pounds. From what I can gather, this Bill does away with that position, and in future cattle insured for export must be insured on the basis of the real value.

I think that these gentlemen had another rather nasty way of doing business which was not fair to the other members of the trade. I understand that there is insurance in respect of fair weather and bad weather, and these people, when the weather looked fair and there was not much apparent danger of any damage to cattle by reason of weather conditions, insured for as low sums as, in some cases, 4/- and 5/- per head, when the cattle might have been worth £25 or £30 per head. Then when rough weather came along, in order to take full advantage of insurance rates, they insured their cattle at the full insurable value. The Minister's Department must have had regard to that position, and I am glad they have rectified it in the Bill. I do not know whether Deputy Fagan's suggestion is advisable or not, but I should like to say this, that where you have a board which has managed its affairs so well with the funds at its disposal, I think it would be a pity and would be a loss to the country, if they were ousted from their positions.

The fact that such a considerable sum of money has accrued to the credit of the board, and that they are now able to effect insurances of stock for export at as low as 2/6 per head on a £25 value, is sufficient proof that the board may have made a very great success of this scheme. There is no doubt that it has been very successful and very useful in every way. It has ensured that the money being exported in the past for this purpose can be kept at home and that people exporting cattle can have their stock insured at a very low rate. This is a natural corollary to the Principal Act —that any cattle exported through Northern Ireland can be insured in the same way.

I must say that great credit is due to the board in this case. They have shown ability and business capacity, and have worked the scheme very successfully. The Minister was very lucky in the personnel he obtained for this board, and while I am inclined to agree with Deputy Fagan that it would be a pity if any change were effected in the present personnel—I suppose it would be rather difficult to provide for an extension of the period of office, as this is a democratic institution and people must be given an opportunity to change if they want to—on their record, there is hardly any doubt that on the expiration of their period of office, which I think is five years, it is more than likely that they will be reappointed in their positions. Because of the success they have made of the business, it is unlikely that there will be any change. However, if it can be done, and if Deputy Fagan thinks there is any danger of undesirables getting on the board, which I think is unlikely, it might be well if the Minister examined that aspect.

I think the Minister is very wise in taking power to ensure that the board can fix minimum values, because I am informed that that feature of the present scheme has been abused by some individuals. Where there is a door open for abuses of that sort, we unfortunately have people in the country who are always prepared to make use of the opportunity. It is well that that door should be closed, and minimum values fixed for different classes of animals. With the considerable sum of money the board has to its credit, and as the business of the board increases and the volume of traffic through Northern Ireland increases, there will be prospects of further reductions in the rates, but there is no doubt that the scheme has been an immense success, and is welcomed by everybody.

There are two points I want to raise. Why this zeal to compel a man to insure his beast for more than he wants to insure it for? If I have a beast worth £25, and I choose to insure it for £5 and to carry £20 insurance myself, why should I not do so? How is it going to hurt the fund?

You will insure for the full amount if there is any damage.

Suppose I do. Suppose I have a particular cargo crossing from Ireland to Great Britain and I want to carry £20 of the risk myself and let the fund carry £5. My contribution is proportionate. If the ship founders and the cattle are lost, the fund will pay me only £5 in respect of each beast I have shipped. My claim against the fund is proportionately low. On the other hand, if I have insured for £25, I pay a higher fee, and I have a higher claim. Unless there is something envisaged in this scheme which is not in any other insurance scheme, I cannot see what harm any man does by carrying portion of his own insurance.

What about the man who is paying on the full value all the time irrespective of the conditions?

That is his business. If he is a conservative person who wants to insure 100 per cent. of the risk on every trip, he may be a very prudent man, and I have no quarrel with him. He is entitled to pursue a conservative course, and if he wants to be ultra-conservative and absolutely secure, he pays for the luxury, whereas the man who is disposed to have a little bit of a gamble and carry part of the insurance himself benefits when the ship does not sink and suffers acutely when the ship does sink. Personally, if I were a cattle exporter. I would belong to the ultra-conservative crowd and be fully covered for every trip. But I can understand the frame of mind of those who are ultra-conservative, that they do not want the gay boys to get away with it cheaply.

If every exporter took that attitude the rate eventually will be higher, because the contributions will be relatively less.

Do not call it an insurance scheme, then, but a levy. It is either an insurance scheme or it is not. I understood it to be an insurance scheme. If it is a levy scheme, why you should bless the Minister for exacting this levy on all the cattle going out I do not know. I understood that it was an insurance scheme. If it is an insurance scheme, it seems to me my contention is correct. If it is a levy scheme, I think there are enough levies on the agricultural industry instituted by the Fianna Fáil Government without rising up to bless them for making another levy. I take it to be an insurance scheme. I was well in on this business when the first Bill was passed through the House and I understood it to be an insurance scheme. If it is, I do not see why any man could not insure what percentage of his beasts he wants to insure. If it is a levy scheme, then my view is that it ill-becomes the Fine Gael Party to be pouring praise on the Minister.

The scheme did not emanate from the Minister and I think the Deputy knows that.

It was a good insurance scheme as I understand it and I supported it in this House as an insurance scheme. If it is an insurance scheme, why does the conservative fellow who wishes to be 100 per cent. covered on every beast, want to be carried on the back of the enterprising fellow who is prepared to carry a little risk himself? I suppose, broadly speaking, those of us who are about 40 want to be carried on the backs of those between 20 and 30. That is a human reaction. But this is Dáil Eireann and it represents the fellows between 20 and 30 just as well as the fellows from 40 upwards. It is one thing for an organisation to press a certain course of action on its members. It is another thing for Oireachtas Eireann to be legislating so as adversely to affect the interests of one group in order to advance the interests of another. If this is an insurance scheme, I do not see why any man who wants to carry a share of his insurance should not be permitted to do so.

If the majority of the people in the cattle trade desire it?

We have enough associations in this country claiming the right to represent the country independently of the Government without constituting the cattle trade another one. I think the cattle trade would be a reasonable body of men.

They are the people primarily concerned.

The Deputy knows that any charges incurred by the cattle trade in connection with this business will be passed back to the producer in the long run.

It was 2 per cent., and it is now ½ per cent.

I am all for the scheme.

If everybody did not insure it would not be down to ½ per cent.

This Bill is designed to change the scheme. Under the scheme as it operated for the last two years any man could insure his beast in any way he liked and still the rate was reduced from 2 per cent. to ½ per cent. Now we are asked to change the scheme which effected that reduction, and the ground upon which we want to change it is that we want to make the reduction which the scheme has already made. The fact of it is that the conservative persons who have been insuring 100 per cent. are jealous of the young fellows who are carrying some of the insurance themselves. The scheme as it stands at present, and which gave every man freedom to insure what proportion of his beast he wanted to insure, has already operated to reduce the rate from 2 per cent. to 1/2 per cent. Why do you want to change it?

If everybody insured it would cost nothing after 12 months.

The effect of removing the discretion to insure a proportion of the potential risk would be to reduce the rate and to pile up an immense reserve as well. If it is going to cost nothing after 12 months why do you want to put an obligation on everybody to insure 100 per cent. of his beast, if, after 12 months, they are going to be insured 100 per cent. in any case? It is obscurantist and bureaucratic to poke your nose into your neighbour's business and make a neighbour do what you want him to do and not what he wants to do himself.

Have we not enough bureaucrats in this country telling Deputy Fagan and Deputy Hughes and everybody else how to run their business without Deputy Hughes and Deputy Fagan turning themselves into bureaucrats and starting to tell their neighbours how to run their business? Big fleas have little fleas on their backs to bite them. If the big bureaucratic fleas are to have little fleas on their backs to bite the unfortunate citizens of the country, life will cease to be worth living. I do not press the question about leaving a discretion with regard to insurance in the hands of the individual, because Deputy Fagan says that in 12 months time there will be no premium to be paid at all.

Is the Deputy voicing the feelings of the people concerned?

I did not come here as a representative of any vested interest, but as an independent Deputy. The Deputy can explain his position at a suitable time. The second point I want to raise is, if there is a very large sum accumulated in this fund and the board have by their action demonstrated their capacity to maintain it, I can understand the Deputy's point of view that he would be reluctant to see men go who have proved their worth. But if this fund has been accumulated as a result of legislation that we passed there should be some means of ensuring that it shall not be devoted to any improper purpose. Ought we not to limit the purpose for which this fund may be used without further reference back to Dáil Eireann? Instead of creating a situation in which you are afraid to see the personnel of the board changed lest the fund should be dissipated, is it not wiser to put certain controls and checks on the fund, so as to ensure that, no matter who become the administrators of the fund, it will be impossible for them to dissipate it? What is the amount of the accumulated fund?

About £180,000.

If there is as large a sum as that accumulated, would it not be well to say that it should not be distributed under any scheme other than that at present in operation, or an amendment of that scheme approved of by the Minister for Agriculture?

That would not prevent them from paying further handsome compensation if they wanted.

I understood there was a board of assessors to determine the value of the beast. I understood that the insurance element of the scheme provided that you valued your beast and paid your premium accordingly, and if there was a total loss they paid you the price at which you valued the beast. There is no danger of dissipating the fund by paying compensation. The compensation is ascertainable from the amount set out in the policy, which is issued before the risk is undertaken. I suggest that it would be well to insert something here to the effect that no new scheme can operate unless and until it has been approved by the Minister for Agriculture. That seems to me to be a reasonable kind of safeguard, and, at the same time, it would leave it open to the cattle trade to elect members to this board with the same freedom as they did in the past. Besides, as Deputy Hughes and Deputy Fagan have pointed out, it is highly unlikely that any change would be made with regard to the members who are on the board at the present moment. Nevertheless, in case they should want to make a change, I think it should be left open to them to do so.

I think there were three points raised here. The first point was with regard to this minimum levy, as it is called. In answer to Deputy Dillon's point, I should say that I regard it, personally, as a type of cooperative insurance—it is called an insurance scheme, anyway—and the spirit of the scheme is that everybody who would be exporting animals would insure them on the basis of a reasonable or proper value. If, amongst exporters, there are some who try to evade that, it is at their own risk, although I admit that, by doing so, these people would vitiate the purpose of the whole scheme. However, when proposing this, I said exactly what Deputy Dillon has said: that if a person wants to evade it, and take the consequences, what does it matter to you or me?

Exactly.

However, I thought it was better to put it on this basis of a minimum value because the people concerned look upon it as a kind of cooperative insurance and they thought that it was necessary to have this with a view to a possible reduction of the premium. They did tell me of one case, which, I think, was more against their argument than for it, where one exporter was in the habit of valuing his animals rather low when the sea was calm, but when the boat on which his animals were went down, that particular exporter has since put a fair value on his animals. I think that, on the whole, it would be better to let the matter stand as it is in the Bill, and let them have this power to put on minimum values.

With regard to the point made by Deputy Fagan, as to the life of the board, I shall consider that matter. I think it would be a disaster—a limited disaster, perhaps—if there were to be a complete clearing out of the present board, and, of course, that might happen if this whole business were to be taken over by a new group. It must be remembered, however, that they cannot do what they like. They are tied very much. For instance, they must invest their funds in trustee securities—a point that was raised by Deputy Dillon. They have a certain latitude with regard to compensation— limited compensation—as was mentioned by Deputy Hughes—but, taking it all in all, I should like to be allowed to look into the matter before the Committee Stage with a view to seeing whether an amendment could be put down to deal with that particular point. Deputy Dillon is quite right in saying that no credit is due to the Minister for this. It was put up by the cattle traders themselves, but it was passed by the Dáil, and every member of the Dáil should take credit for it.

And a very good piece of legislation it was.

Yes, and every member of the Dáil should take credit for it, just as they should take the credit or the blame for every measure that is passed through this House.

In that case, we should share the blame for 90 per cent. of the legislation that has been passed through this House in the last ten years.

Yes, but I want every Deputy to share the blame for every faulty piece of legislation that we have put through, as well as to take the credit for any good legislation that has been put through. However, I should like to sound a warning here, and point out that, although we hope that these premiums will be reduced more and more, still we must lock forward to the time when, possibly, they might go up, and the board will not be able to avoid that if things should go badly with them.

Yes, that is quite understandable.

Question put and agreed to.
Committee Stage ordered for 25th November.
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