Dáil Éireann díospóireacht -
Wednesday, 28 Feb 1945

Vol. 96 No. 6

In Committee on Finance. - Vote 69—Supplies.

Minister for Supplies (Mr. Lemass)

I move:

That a Supplementary sum not exceeding £450,000 be granted to defray the Charge which will come in course of payment during the year ending 31st March, 1945, for the Salaries and Expenses of the Office of the Minister for Supplies, including payment of certain Subsidies and sundry Grants-in-Aid.

The necessity for this additional sum arises out of a deficiency in the provision for food subsidies. The total deficiency in the amount voted by the Dáil was £810,000, but the amount now required is reduced to £450,000 by reason of savings which were effected upon other sub-heads, to which I will refer later.

The main cause of the deficiency in the provision for food subsidies was the necessity which developed during the year of reducing the millers' price for offals below the amount at which it was assumed at the beginning of the year that the millers would be able to sell offals. The House will remember that when the supply of offals was made available, a price ex-mill of £17 10s. 0d. per ton was fixed. When the Estimate was being prepared, it was assumed that the 72,000 tons of offals which would be produced during the year would be disposed of by the millers at £17 10s. 0d. per ton. In fact, only a very small quantity of offals was disposed of at that price, and after some weeks the price was reduced to £15 per ton. Even at that lower price, only about 6,000 tons were sold, and as the offals were accumulating in the stores of millers and wholesale and retail distributors of offals, it was decided to bring the millers' price down to £10 per ton, at which price the offals were freely disposed of. That price is still being maintained. The disposal of 72,000 tons of offals mainly at £7 10s. 0d. per ton less than was originally assumed resulted in a decrease of £510,000 in the amount received by the millers. As the millers were not allowed to increase the price of flour, by reason of Government policy, it became necessary to adjust the allocation price of imported wheat to millers to enable that loss to be recovered. The House is, I think, aware of the fact that the price of flour and other mill products is regulated through the price of imported grain. Grain Importers, Limited, allocate the grain to millers at the price fixed by the Government, and any loss incurred by Grain Importers, Limited, in allocating wheat at that price is made good by this subsidy.

That brings me to the second heading under which a deficiency occurs. The House will appreciate that the determination of the proper allocation price for imported grain is a matter of some difficulty, because there is a number of variable factors. There are changes made from time to time in the percentage of imported wheat used in the millers' grist. There have been changes during the year in the flour extraction, and some changes in the cost of production. One of the most important items, however, is what is known as overweight. Just as native wheat has to be dried before it is in a proper condition for milling, so imported wheat has to have water added to it before it is suitable for milling. In the past, that overweight allowance was found to be about 2.86 per cent., representing 2/1 in the sack of flour. During last year, however, we imported mainly No. 3 Manitoba wheat, instead of No. 1 Manitoba wheat, which was the type we had previously imported, and the moisture content of the No. 3 Manitoba wheat is higher than that of No. 1. When the results of the milling operations during the cereal year which ended in October last were available, it was found that the actual overweight percentage was only .27, representing approximately 2½d. per sack. There was, therefore, a deficiency of about £310,000, which has to be rectified by another alteration in the allocation price of imported wheat. Those two figures, £300,000 in respect of overweight allowance and £510,000 in respect of the reduction in the millers' price for offals, represent the total deficiency upon the Vote for food subsidies of £810,000.

Against that £810,000, however, there were certain savings. By reason of the fact that we imported substantially more No. 3 Manitoba than No. 1. there was a reduction in the price we had to pay for wheat, Manitoba No. 3 being cheaper than Manitoba No. 1. The wheat importation programme contemplated considerable imports of Plate wheat, which costs us more in present circumstances than wheat imported direct from the North American Continent. It was not possible to complete the programme in respect of Plate wheat, so a higher proportion of North American wheat had to be procured, and there was a saving in consequence. The main reduction, however, in the loss in allocating wheat is due to reductions in the freight and insurance charges. It may interest the House to know that the present cost of Canadian wheat landed at one of the four main ports of this country is £20 7s. 10½d. per ton, as against £25 18s. 10d. in August, 1942, although since August, 1942, the purchase price of wheat has increased from £8 7s. 3d. per ton to £13 15s. 8d. per ton. It will be obvious, therefore, that the reductions in freight and insurance charges have brought down the price of wheat by approximately £10 per ton. The total saving arising out of that cause was £135,000. There was a reduction of £10,000 in the amount provided for wheat meal subsidy, due to the fact that not all wheat meal millers claimed the subsidy. The saving there, as I said, was £10,000. There was a saving of £15,000 in respect of tea, due to the fact that when the increase in the ration was effected towards the end of last year it was decided to use for the purpose stocks of tea held by wholesalers, to some extent, in preference to providing for the purpose of the extra ration stocks held by tea Importers Limited. The reduction in the loss to Tea Importers by reason of that decision was £15,000. The other and principal saving was £200,000 in respect of turf subsidy, which is due almost entirely to the decision not to proceed with the construction of additional turf camps during the financial year. These various savings reduced the amount required from £810,000, which was the deficiency in the amount voted for food subsidies, to the £450,000 now asked for.

Mr. H.M. Dockrell

This Estimate contains some extraordinary figures, and I do not know that the Minister's explanation covers the whole thing. The Minister has spoken of the £650,000 extra required for imported wheat, or rather to make up the loss on the sale of offals and the loss in the overweight. I have a recollection that, at the time the offals price was reduced, some people who were distributing offals were very badly let down, or thought they were let down, by the Government, having just bought their quota of offals at the full price. I know that at the time they could not obtain a refund. I do not know whether the Minister was later on able to satisfy them, but it seems to me that it is a very bad policy for a Government, when they are trading, to load up the distributor just before there is a fall in the price of the stuff. It seems to me that somebody made a bad mistake, when arranging the Estimates for the year, when this point about offals could not be foreseen.

The next thing one comes to is the saving of £200,000. You have to read that saving in conjunction with the previous Supplementary Estimate showing £342,000 of an increase. The £342,000 was put down then to cover an increase under the fuel subsidy and an increase under sub-head K (1)— that is, turf development, of £142,000. Immediately afterwards the Minister comes along and finds he can make a saving of £200,000, so that the increase of £142,000 becomes a saving of £58,000 nett. That is all to the good. The Minister has mentioned that the saving was largely brought about by the decision which was arrived at not to go in for additional turf camps. The Minister was probably very wise in that, but that brings one on to consider what the position with regard to turf will be for the rest of this year.

Last year, on an Estimate such as this, I invited the Minister to give us some idea of what a ton of turf was costing the country. I suggested at that time that the ordinary person in Dublin pays £3 5s. for a ton of turf and that there was, roughly, a loss to Fuel Importers and to county councils of something like £2 10s. per ton of turf divided between the two of them. That would bring the cost of a ton of turf to £5 15s. It used to be argued that 2¼ tons of turf were equal to a ton of coal. Tossing up those two figures, it brings one to a price of £12 18s. 9d.— call it £13—for 2¼ tons of turf, the equivalent of a ton of coal. The Minister will probably say to me that that is all very good, but that he cannot get a ton of coal, and I quite agree with him. When you cannot get coal you must do the next best thing, and probably turf is the next best thing.

Has the Minister made any calculation or tried to find out when coal will be available? I would like to suggest that most people think that the price of coal will not continue at £13 per ton for very much longer, because that is what it works out to in practice. Perhaps the Minister could give us the cost to the country of a ton of turf, and also say whether any effort has been made to bring the expenditure on turf to some sort of a conclusion, and whether stocks will be at a reasonable figure and will not all have dissolved under the weather when coal does appear on this market.

Mr. Cogan

With regard to the fixing of the price of wheat offals, the Minister claimed that a very substantial loss was made owing to the fact that the price of wheat offals had to be reduced. Who advised the Minister to fix a price of £17 per ton for wheat offals, having regard to the fact that events proved that they could not be disposed of at this price, which had to be reduced later to £15 and later still to £10? The effect of these drastic reductions was very disconcerting to everybody engaged in the trade, and the position at the present time is that wheat offals cannot be obtained at any price.

There is a very serious shortage of wheat offals in the country and the question we have to consider now is whether the Minister was wrong in fixing £17 a ton, or whether he was more wrong in reducing the price to £10 per ton. Anyhow, it seems as if the situation has been badly bungled, because feeding stuffs are unobtainable at the present time.

I should also like to know who is intended to benefit by this flour subsidy. I presume it is the consumer, but there has been a tendency to represent this subsidy as a Vote for the benefit of the farming community. I should like to point out to the Minister that, in 1943-44, we produced 6,586,000 cwts. of wheat from 509,000 acres. That represents something less than 13 cwts. per acre which, at £1 2s. per cwt., the fixed price, gave a gross return of £14 6s. per statute acre. Nobody will dare to suggest that that is a very high return, nor do I think it can be seriously contended that, on the basis of present costings, wheat can be produced economically at £14 6s. per acre. The costs of production, if worked out, would be very considerably more than that.

A point of great interest to all Deputies was that credit was taken for the addition of £300,000 worth of water to imported wheat. I think that was the position the Minister made clear, and the fact that this amount of water has to be added to imported wheat, in order perhaps to make it palatable to our people, is a very interesting point for consumers and the general public. I suggest that this whole question ought to be reviewed in the light of the continuous changes which have taken place in regard to prices and profit. Some very clear and definite investigation should be made into the profits being secured by those engaged in the milling industry. There is no doubt whatever that, if investigations are carried out, it will be revealed that the profits of those engaged in milling wheat are very considerably higher than the remuneration afforded to those who actually grow the wheat.

Mr. O'Leary

I should like to ask the Minister why he did not sanction the increased bonus for flour mill workers throughout the country.

Mr. McGilligan

I notice that it is stated in the Estimate that issues are made from this sub-head to Grain Importers (Éire), Limited. Does that mean, as that particular phrase would seem to indicate, that this is applicable only to imported wheat? Is that so? Has this subsidy reference to imported wheat only?

Mr. Lemass

The price of flour is regulated by adjustments in the allocation price of imported wheat.

Mr. McGilligan

But it goes to all wheat producers. It goes to millers really and is supposed to drift down to all the wheat producers. The point in respect of which I should like to get some clarity is what percentage of the whole subsidy goes to the firm of J.V. Rank and Co.? It is a rather peculiar contrast that this is introduced by way of a slide-over from a piece of legislation intended to prevent members of the I.R.A., not from getting pensions but from having their cases adjudicated upon by a tribunal which the House established to certify as to whether there was active service and so on. We shift over from that discussion to being very delicate in respect of the amount of money which is said to flow down to those who produce wheat. What Deputy Cogan said is perfectly correct. Whatever may be the effect on consumers, there is no doubt that a fair amount of the subsidy sticks on the way down and the Minister should be in a position to tell us what is the average rate of profit made by those engaged in milling flour here. The Minister ought particularly to be able to tell us what amount of the subsidy eventually goes out of this country to Joseph Rank and Co.

Deputies need not be reminded of what a Government commission found out with regard to that particular company—that people were able to come into this country, to buy up certain concerns for a certain amount of money and eventually to off-load the concern on to the Irish public for something in the neighbourhood of £200,000, that is, not merely to recoup their capital expenditure but to get a gift of about £200,000 and, at the same time, to have control and more than half the dividends for nothing, for no capital involvement, their original capital having been repaid and they having got something like a couple of hundred thousand pounds.

I have made efforts from time to time to find out what percentage of this subsidy sticks to the firm of Rank on the way down, because when we discover that we shall be able to find out how much goes to those people in Ranks (Ireland), Limited, who have nothing whatever to do with this country but who, by holding on to the control and the majority of the dividends of the company, are enabled to put money into their pockets over and beyond their capital expenditure and over and beyond the present of a couple of hundred thousand pounds this country made to them. I think that is a figure the public are entitled to know.

The Minister, when I asked questions, said that the money is distributed by Grain Importers (Éire), Limited, and he apparently is in the dark as to who are the beneficiaries under it. I think that with regard to very big units, as some of the milling units are, it is quite easy to discover, if the Minister cared to do so, what amount of this subsidy is being paid on bread stuffs which goes to outside concerns, and particularly to an outside concern which has already taken back all the money put into it.

Mr. Cosgrave

The Minister said that the price of imported wheat has come down by approximately £5 since August, 1942.

Mr. Lemass

The price of wheat landed here.

Mr. Cosgrave

Of wheat landed here. He also says that the purchase price of wheat has gone up by, approximately, £5. Can he say what reduction he estimates in the price of bread or the price of flour here that would mean and also when the reduction took place? Was it only recently or has it been in operation for some time?

With regard to the point mentioned by Deputy Cogan, a number of retailers felt a certain amount of dismay by reason of the manner in which the price of offals was suddenly reduced practically immediately after they had purchased quantities of them. I do not know whether it is possible to recoup these people—I presume it is not—but in future if this difficulty arises—possibly the price fixed now will remain fixed for some time—some notice should be given to these people before the reduction takes place. I can visualise the difficulty that, if people are warned that a reduction is likely to take place, no one will buy the stuff, but, on the other hand, if these people are to be faced with a loss of anything from £2 to £7 per ton, it could mean a substantial sum to a large business.

Donnchadh O Briain

I would ask the Minister with regard to the commissioned mills, that is to say mills which previous to their being made subject to complete control could take some offals from the wheat, to consider the position of farmers who send their wheat to those mills to be ground. They are under an unfair handicap in view of the fact that offals, as Deputy Cogan has said, are now practically unprocurable. They cannot have the offals that used formerly be taken from the wheat. They are not available to them owing to the restrictions. I would ask the Minister, if it is possible, that the restrictions in that respect should be withdrawn.

Mr. Lemass

A question was asked as to the effect on the distributors of offals of the decision to reduce the price from the level at which it was originally fixed to one substantially lower. It is true that these distributors claimed compensation for whatever loss they may have incurred on the stocks they had in hands. I did not admit that claim. I would regard it as a fair commercial risk, one to which these traders would ordinarily be subject in normal times.

Apart, however, from that argument, there is the fact that when the millers' price of offals supplied to the distributors was £17 10s. per ton, we fixed the maximum retail selling price at £18 10s. per ton, which allowed a narrow margin for the wholesale and retail distributors. When the millers' price was reduced to £10 a ton, there was no maximum retail price fixed. That permitted the price of offals to be determined, in particular localities, by the conditions prevailing there, and, as everybody knows, the most important condition is the prevailing price of oats. An examination of the retail prices at which offals are being sold indicates that they are generally reasonable, having regard to the prices which the distributors pay. I would not, therefore, be prepared to admit that the distributors of offals have any claim for compensation arising out of the reduction in their prices, any more than they would admit liability to tax if the circumstances during the present year should necessitate an increase in the price of offals which would permit them to secure extra profits upon whatever quantities may be in stock at the time.

The price of offals was fixed at £17 10s. per ton in consultation with the Department of Agriculture and the Department of Finance. The Department of Finance had a very lively interest in the price we fixed because, of course, that price determined the amount of the subsidy which had to be provided. The Department of Agriculture was concerned because it was anxious to secure that the offals would be available to the farmers at a reasonable price, and particularly a price which would be related to the cost of other feeding stuffs on the market. When the price was originally fixed oats were much dearer than they subsequently became, and the inability to dispose of offals was attributed to the decline that took place in the price of oats last year. I think that at any time the price of wheaten offals will have to be related to the prevailing price of oats. It is not, of course, true to say that wheaten offals cannot be procured. The production of wheaten offals has reached 1,200 tons per week. These offals are being distributed to the different localities in accordance with a scheme prepared by the distributors themselves, a scheme designed to ensure that every trader and every locality will get a fair share of the available supply. The stocks in the hands of traders may have been dissipated by reason of the growth in the demand for offals. The normal output of offals will continue as long as the present extraction of flour continues. If we reduce the extraction of flour from wheat we will have more offals, and if we increase it we will have less. The present output is 1,200 tons per week.

There seems to be a great deal of misunderstanding concerning the operation of this subsidy. The whole benefit of this subsidy goes to the consumers of flour and to nobody else. Neither Messrs. Rank & Company Limited, nor any other wheat miller gets a penny of the subsidy. Any alteration in the subsidy will have to be reflected in the price charged for bread or flour. If there is a saving in the cost of wheat, as there was in the case of imported wheat, the benefit of that saving is secured by the Exchequer. If there was a rise in the price of imported wheat which involved a heavier cost, then the Exchequer would have to provide more. The Government fixes the price at which flour and bread may be sold. It fixes the price at which imported wheat is delivered to the millers, and it relates these prices one to the other, and sees that the profits made by the millers will be reasonable. The profits, over the costs of production, are carefully checked by the officers of the Department of Supplies. There is, therefore, no relationship between the amount of the subsidy provided and the profit made by the millers. The amount of the subsidy is determined solely by the price at which imported wheat has to be made available to the millers to enable flour and bread to be sold at the prices we have determined. There is no need therefore, as Deputy Cogan has suggested, to investigate the profits made by the millers. We know what these profits are. The millers are allowed a return of 6 per cent. on the capital actually employed in flour milling or in financing the purchase of the native wheat crop. That capital sum is taken at £4,000,000. In determining the allocation price of imported wheat a sum is made available to the flour milling industry as a whole which is equivalent to 6 per cent. on an estimated capital of £4,000,000, and the amount, so made available, is distributed amongst the millers by a committee of the millers established by themselves, and in accordance with a formula agreed upon by themselves. The Department of Industry and Commerce was concerned only to ensure, first of all, that the estimate of the amount of the capital actually employed was an accurate one, and, secondly, that the various calculations made as to the cost of milling the wheat into flour were accurate. It is also concerned to ensure that the amount which would have to be provided by the State as a subsidy to Grain Importers Limited would not be higher than it need be.

Mr. Cogan

Is the Department able to take effective measures to ascertain whether the costings are accurate or not?

Mr. Lemass

Certainly. We have ample and efficient machinery for ascertaining whether the costs are accurate.

Mr. Cogan

Does the Department actually run a mill itself?

Mr. Lemass

We inspect the accounts of every mill, and every mill keeps whatever checks are necessary to ensure that the Department has all the information which is required to enable it to determine what is the cost of producing flour from wheat.

Mr. Cogan

Would not there be wide variations in costs as between, say, a very large mill and a smaller one?

Mr. Lemass

There has to be an averaging of these costs to calculate the total remuneration to be allowed to the milling industry as a whole.

Mr. Cogan

The bigger mill would benefit.

Mr. Lemass

Not necessarily. If the Deputy will study the information published by the Department of Industry and Commerce, he will find that it does not necessarily follow that the bigger mill benefits by any averaging of costs. Deputy O'Leary asked me a question about a bonus for flour-mill workers. I am speaking at the moment as Minister for Supplies and that question relates to the Department of Industry and Commerce. I should require notice of the question. I am not aware of any bonus for flour-mill workers, recommended by a tribunal, which has been refused. Deputy O Briain asked me why commissioned mills were not allowed to produce flour of less than 100 per cent. extraction. The reason is that these mills are not equipped to produce flour of any pre-determined extraction. The ordinary licensed mill —the concern that produces flour for sale—can adjust its machinery to produce flour of a pre-determined extraction. We can supervise the operation of that mill to ensure that flour of the type prescribed is, in fact, being produced. But, in the case of the commissioned mill, nobody can say, when the wheat is going into the mill, what percentage, with some extraction of offals from the wheat, the resultant flour will be of the total wheat used. It is not possible to say in respect of those commissioned mills that they may produce flour of 75 per cent, 80 per cent. or 85 per cent. extraction. They are not equipped to produce flour of any pre-determined extraction, and there would be considerable wastage of wheat if those mills were allowed to extract offals as a result of their milling operations.

Deputy Dockrell asked me some questions concerning turf. I mentioned the sum of £200,000 as representing the saving upon sub-head K (1). I attributed that saving mainly to the decision not to proceed with the construction of additional turf camps. In fact, the saving upon that head was £144,000. The difference between that and £200,000 represents savings on other aspects of turf production— economies which were brought into effect during the year and which reduced the amounts which had to be provided for fuel-subsidy purposes. Deputy Dockrell's calculations concerning the price of turf are in many respects misleading. When he asks me what the price to the country of a ton of turf is, I find it difficult to understand what he has in mind. I can tell him the price to the consumer—the price which the consumer pays—and add to that the subsidy which the Exchequer pays. When he asks me what is the cost to the country, I find it hard to give him a figure because I presume that, in determining the cost to the country, one would deduct from the amount realised by the sale of turf the amount paid in wages to workers, because that does not represent a cost to the country. To put Deputy Dockrell right, I think I should say that if turf were produced and delivered direct to the fuel merchant's yard and from the fuel merchant's yard to the consumer, it could be sold, in most areas, without loss, at the present fixed price for the non-turf area. However, the Deputy must appreciate that the State is doing more for turf producers than merely producing turf for them. It is storing that turf for use in the winter when production is impossible and when transport may be difficult. It is rationing the distribution of that turf, which also involves a storage charge. A large part of the amount required as subsidy is due to the cost of storage. Not only are there actual cash charges for putting the turf into store—the dumps in the Park and dumps in other localities —and for taking it out of those stores, delivering it to the fuel merchants and subsequently delivering it to the consumers but, in the stores, there is a shrinkage in the weight of the turf. The allowance that has to be made in respect of that shrinkage in weight, due to the evaporation of moisture or the crumbling of the turf into mould, is not less than 20 per cent. of the total value of the turf as it goes into the dump.

It could be said, therefore, that almost the whole amount of the subsidy for turf in the non-turf area is attributable to the need for those turf stores and the keeping of the turf in those stores so as to facilitate its rationing and secure a supply in winter months. If we had to carry out the same operations in relation to coal, assuming we could get the coal, the price of coal would be equally enhanced by the addition of corresponding charges. However, there is no need at this particular moment to go into the economics of turf production. I told Deputy Dockrell before that he could come to no conclusion concerning the economics of turf production on the basis of present experience. Present experience is not a reliable guide. Our main concern at the moments is to get the turf produced, because we need it. Cost must be a secondary consideration. It is being produced by organisations not entirely suitable for the purpose and in circumstances which impose charges which could be avoided in normal times. Certainly, the Deputy's calculation, which brought him a total of £13 10s. as representing the corresponding price for coal, was completely erroneous.

Mr. Dockrell

Why does not the Minister correct it?

Mr. Lemass

I have corrected it.

Mr. Dockrell

The Minister professes to be unable to understand the question which I put.

Mr. Lemass

Will it help the Deputy if I say that, assuming the sole charges to be taken into account are those for producing the turf and delivering it to the consumer——

Mr. Dockrell

The Minister cannot assume that.

Mr. Lemass

The Deputy did not make it clear that he was assuming anything else.

Mr. Dockrell

I took £3 5s. as the price which a person is charged for turf.

Mr. Lemass

That is the price of the turf and, on the assumption I have made, that represents no loss.

Mr. Dockrell

Are there not subsidies under two heads additional to that?

Mr. Lemass

There are subsidies which, as I have been trying to explain to the Deputy for the past ten minutes are mainly due to charges arising in connection with the storage of turf.

Mr. McGilligan

What were the old figures which we were given—63/- plus 28/-? Have those figures increased?

Mr. Lemass

They are much the same.

Mr. Dockrell

The 28/- was only for one section of the loss.

Mr. Lemass

Deputy Dockrell is confusing certain capital sums advanced for the construction of turf camps.

Mr. McGilligan

Taking in the background, what would the further addition be to the 91/-?

Mr. Lemass

Why should there be any addition?

Mr. Dockrell

I asked the Minister for the further charges.

Mr. Lemass

The turf sold from the national pool by Fuel Importers, Limited, could be sold, without subsidy, at the present price if there were no storage charges.

An Leas-Cheann Comhairle

I do not think that the price of turf enters into the consideration of this Estimate.

Mr. McGilligan

It was brought in by the Minister's opening statement.

Mr. Dockrell

The Minister said that there was £200,000 of a saving upon sub-head K (1) in respect of turf.

An Leas-Cheann Comhairle

Not in connection with turf camps.

Mr. Dockrell

If the camps are to be kept out of the calculation of the cost of turf——

An Leas-Cheann Comhairle

We shall have to keep the camps out of this debate and concentrate on food subsidies.

Mr. McGilligan

The Minister has explained that he is asking for this particular amount because there has been a saving on turf. Surely we are entitled to find out how far that saving goes.

Mr. Lemass

Perhaps it will help Deputies to understand if I say that by far the greater proportion of all the turf sold in the non-turf areas was produced by the county councils through their own organisations.

Mr. H.M. Dockrell

And there is a loss on that?

Mr. Lemass

Of course, there is a loss on it, and that is why we are providing the subsidy; but the provision of capital in connection with the turf camps of the Turf Development Board does not affect that turf. The turf that I am referring to, and that, I think, the Deputy is referring to, is that produced by the county councils, and sold by the county councils to Fuel Importers, Ltd., through their own organisations. The purpose here is to ensure that, through rationing, turf will be available during the winter months.

Mr. McGilligan

And that is met by the 28/-?

Mr. Lemass

Yes. It is true that the Turf Development Board have been receiving these capital grants in order to enable them to fulfil the task entrusted to them.

Mr. McGilligan

Is there anything over that, for a ton of turf, in the other cases?

Mr. Lemass

No, because one would have to ascertain the length of time during which those camps would have to be amortised.

Mr. McGilligan

Surely, it should be possible to evaluate the costs on a basis of five, ten, 20 years, or whatever it might be?

Mr. Lemass

It must be remembered that a great deal of capital expenditure is necessary on those bogs in order to make it possible to produce turf from them, and that that also applies to the provision of turf camps on the bogs. The idea of putting these turf camps close to Dublin was almost entirely due to a transport problem, and not to a turf problem. It was due to the fact that, no matter what quantities of turf could be produced in the western portions of the country, there still remained the question of transport. Therefore, it was a question of bringing workers from the west to work on the bogs in the east, in order to save the cost of the transport of turf. So far as the financial calculations arising out of that decision are concerned, it must be borne in mind that we were trying to solve, not a turf-production problem alone, but a transport problem.

Mr. McGilligan

Then, surely, it should be possible to make some kind of an evaluation on that basis?

Mr. Lemass

The Deputy can take the figures that I gave before.

An Leas-Cheann Comhairle

It seems to me that the question of the cost of turf is out of order, as we are now dealing with the cost of flour.

Mr. McGilligan

With all respect, Sir, I submit that we are now dealing with this sum of £800,000 and that some portion of that has been due to this matter of turf.

Mr. Lemass

I think that the only matter concerned here is the decision not to proceed with the provision of extra turf camps. As the international situation seemed to be changing, it was felt that the original decision could be reversed, and that we could get our turf requirements up to 1946 without incurring the cost of erecting new turf camps.

Mr. McGilligan

And so, 6 per cent. was put on the millers' profits.

Mr. Lemass

No. The 6 per cent. is based on the estimate of the capital actually employed in milling.

Mr. McGilligan

According to the report of the commission dealing with that matter, it seems to me that that was based on the amount that would keep the least efficient miller in production.

Mr. Lemass

That has nothing to do with the present system.

Mr. McGilligan

Has there been any difference since? How does the Minister's Department arrive at a computation of the amount received by the various millers?

Mr. Lemass

We do not determine the amount received in remuneration by any individual miller at all.

Mr. McGilligan

But, with this 6 per cent. as an average, is it not quite clear that the least efficient miller can get as much as the most efficient miller? Is the Minister aware of what Messrs. Ranks are getting?

Mr. Lemass

The average profit is 1/9 a sack; but that is not determined by the Department of Industry and Commerce. The distribution of the total amount is determined by the millers themselves.

Mr. McGilligan

Is it 1/9 a sack?

Mr. Lemass

The average works out at 1/9 per sack.

Mr. McGilligan

As against native wheat and imported wheat, what would be the difference in price?

Mr. Lemass

Imported wheat would be about £4 a ton cheaper.

Mr. McGilligan

Deputy Cogan gave a figure of about 370,000 tons of native wheat.

Mr. Lemass

Our requirements of wheat are, roughly, about 470,000 tons, of which we get about 300,000 tons from home supplies.

Mr. McGilligan

According to that, about 100,000 or 200,000 tons come from outside this country, and surely the Minister should be in a position to give us the proportion of imported wheat that comes in through Ranks?

Mr. Lemass

None at all.

Mr. McGilligan

None at all?

Mr. Lemass

No.

Mr. McGilligan

Well, then, what proportion is fixed in this matter of wheat?

Mr. Lemass

The same proportion is fixed in regard to that firm as in regard to anybody else. The proportion of native and imported wheats in the grist is fixed by me and is the same for all millers.

Mr. McGilligan

Yes, but in the case of native or imported wheat, is the flour coming from these people in the same proportion?

Mr. Lemass

Yes.

Mr. Cosgrave

Is not the profit determined more by the output than by the efficiency of these mills?

Mr. Lemass

Does the Deputy mean the milling industry as a whole?

Mr. McGilligan

The whole industry.

Mr. Lemass

The total capital invested in the industry, including the capital required for the purchase of 300,000 tons of native wheat represents about £4,000,000, on which 6 per cent. is allowed as a gross profit.

Mr. Cosgrave

Is the allocation of the 6 per cent. of the total capital made on the basis of the output of each mill, or of each miller as the case may be?

Mr. Lemass

We do not allocate it at all.

Mr. McGilligan

Is not the subsidy allocated according to sackage?

Mr. Lemass

The millers do not get the subsidy. Imported wheat is sold by Grain Importers, Limited, at a certain price. The price is varied up and down, not with regard to the price paid for imported wheat but with regard solely to the actual cost of production of flour, so as to maintain a fixed price for flour. In altering the allocation price of imported wheat, Grain Importers, Limited, lose money. If they were to raise the price of imported wheat they would lose less. So far as the millers are concerned they have to use in their grist the prescribed percentage of native wheat, bought at a fixed price, plus a percentage of imported wheat, which they got at the allocation price. They get the total grist at a price which enables them to sell flour at the fixed price, having regard to the cost of production.

Mr. McGilligan

There are different costs of production associated with different mills?

Mr. Lemass

We average the price.

Mr. McGilligan

On output?

Mr. Lemass

No, on the capital employed.

Question put and agreed to.