I move that the Bill be now read a Second Time.
In December last, the Government announced in a White Paper that they had accepted the recommendation of the Advisory Committee on the Marketing of Agricultural Produce that a Board should be established to control the marketing of Irish dairy produce. This Bill gives effect to that decision.
Most of the milk sold in this country goes to creameries for manufacturing purposes. The proportion of our total milk production that goes to the liquid milk market is only 21 per cent. This is not because liquid milk consumption per head of the population is low in this country; in fact, our liquid milk consumption is one of the highest in Europe. The real reason is, of course, that our population is small and their liquid milk requirements, even on the basis of our high rate of consumption per head, are only about 120 million gallons a year. On the other hand, the total quantity of milk delivered to creameries this year will not be far short of 300 million gallons, and will probably beat every other year with the possible exception of 1957. Of this quantity, approximately 180 million gallons would be needed to meet home requirements of butter on the basis of the average consumption during the past three years, and 12 million gallons would be needed to meet home market requirements in respect of other milk products, such as cheese, milk powder, condensed milk and chocolate. The quantity of milk available for conversion into dairy products for the export market is, therefore, in the region of 80 to 100 million gallons. In the past, most of this milk surplus has been converted into butter for export, though there is, of course, an important export trade also in chocolate crumb, and a smaller but increasing export of cheese and milk powder.
As I have already mentioned, the scope for increased liquid consumption of milk in this country is limited. The same applies to butter, as we are one of the biggest per-head consumers of butter in the world. The only milk product for which there seems to be a prospect of increased home consumption is cheese. Our per-head consumption of cheese is, indeed, the lowest in Western Europe, although it is tending to rise. From the point of view of health and variety of diet, there is everything to be said for our eating more cheese in this country.
While milk production has varied from year to year, because of weather and other conditions, it seems clear that the underlying tendency is upwards. This is partly due to the fact that the yield per cow has been increasing, and this, in turn, is due to better farming, which is now greatly facilitated by the relatively low prices at which fertilisers are made available by means of the fertilisers subsidies. A further factor of considerable importance is, of course, that there is an assured price for milk supplied to creameries and for milk supplied for human consumption in our two biggest city areas. While the price paid to producers for milk in this country is not high in comparison with other European countries, the fact that a certain price is assured provides a very useful measure of stability to producers.
I welcome the tendency of milk production to increase, as milk is the basic product of our agriculture and on it depends to a very large extent our cattle and pig industries. We have seen that any appreciable expansion in home consumption of liquid milk and of milk products other than cheese cannot be expected, and it follows that we must look to the export market for dairy products to absorb our surplus of milk. This surplus, however, even at what for us was a relatively high level this year, represents only a very modest proportion of the requirements of available export markets and indeed any expansion in our exportable surplus which may take place could not form more than a small part of the needs of those markets. One of the main problems which has faced us in the past is lack of continuity of supply on the export market. We exported butter only when a surplus arose, and kept imports down to the lowest possible level. Apart from a reasonably steady market for a limited quantity of chocolate crumb and milk powder, our exports of other milk products were small and depended on whether our creameries were able to manufacture the products at the prices obtainable on the export market. If the creameries did not get at least the same price per gallon of milk as they would have obtained for milk converted into butter and sold to the Butter Marketing Committee, they did not manufacture other products for export.
The main functions of the Board to be set up under this Bill—to be known as An Bord Bainne—will be to channel milk production into the most profitable manufacturing outlets, to improve methods of marketing of dairy products, and to develop export markets in a systematic manner. The Board will take over the present functions of the Butter Marketing Committee in regard to purchase, storage, sale, etc., of creamery butter. The Government will provide the Board with an annual grant, the amount of which will be negotiated each year, and the Board will be authorised to collect levies from the producers to meet the balance of its requirements.
The Board will, in principle, become the sole exporter of all dairy products, but, as some exceptions to this are desirable in the interests of the dairy industry as a whole, the Bill empowers the Minister for Agriculture to delegate from time to time export marketing functions for particular products to the manufacturers concerned. At the outset, it is proposed to leave to the individual manufacturers the export of all chocolate crumb to Britain and the Six Counties; milk powder; non-creamery butter, and some special lines of cheese. The Board would be the sole exporter of creamery butter, fresh cream, canned cream, condensed milk, and cheese other than some special lines, and would also handle the export of chocolate crumb to destinations other than Britain and the Six Counties.
Section 8 of the Bill sets out the constitution of the Board. There will be nine members, of whom four will represent suppliers of milk to creameries, and there will be one representative each of manufacturers of cheese, milk powder and chocolate crumb, together with one representative of the Dairy Disposal Company, Limited, and one officer of my Department. I should mention that the White Paper on the Marketing of Agricultural Produce visualised a membership of eight, but, following representations made by the creamery industry, I decided to increase by one the representation of creamery milk suppliers, this additional member to be specially selected to represent the interests of creamery societies in the production of fresh cream. Otherwise no change has been made in the representation as set out in the White Paper.
Each of the representatives of creamery milk suppliers will be associated with a different group of creamery premises. One will be chosen by creamery societies in Counties Clare, Cork, Kerry, Limerick, Tipperary, Waterford, Wexford, Kilkenny and Laois; one will be selected by societies in the other counties: and the member who will represent the cream interests will be chosen by creamery societies in the country as a whole. The fourth representative of milk suppliers will represent the suppliers to creameries operated by the Dairy Disposal Company, Ltd., and its associated companies. In the first three groups candidates will be proposed by the societies and if more than one is proposed the societies will ballot to choose the candidate who will be a member. In the case of the suppliers' representative for the Dairy Disposal Company's group the creamery suppliers will propose the candidate and if necessary will later vote individually on the proposals.
This procedure follows reasonably closely the method recommended by the Advisory Committee, departing from the latter method only to the extent necessary to give effect to the decision to have a member representing the cream interests nominated by creamery societies in the country as a whole. The three representatives of the manufacturers will be nominated by the manufacturers concerned but in the event of disagreement among them the nomination will be made by me.
The Board will hold office for a period of four years and members will be eligible for re-election. The Chairman of the Board will be selected by the Board from among their own membership.
The provisions in regard to resignation or disqualification of members of the Board are on routine lines. A member of either House of the Oireachtas may not at the same time be a member or an employee of the Board.
Section 18 of the Bill provides for the fixing by me after consultation with the Minister for Finance of the remuneration and allowances for expenses of the Chairman and other members of the Board. The recommendation of the Advisory Committee in this matter was that "the Chairman and members should receive such remuneration as will ensure that they will have adequate interest in their work and will provide the amount of time necessary for the proper performance of their duties." The Chief Officer of the Board will be a full-time employee. His salary will be fixed by me after consultation with the Minister for Finance. The remuneration of other members of the Board's staff is being left to the discretion of the Board itself. Provision is also being made for the taking over by the board of the existing staff of the Butter Marketing Committee.
Under Section 35 of the Bill the Board is empowered to collect levies on milk supplied to creameries. These levies will enable the Board to meet its expenses, including the dairying industry's proportion of any deficit arising on exports of milk products. There are also provisions in Sections 36 and 37 of the Bill for levies on butter sales and on butter stocks. These provisions are re-enactments with appropriate amendments of similar provisions in the Dairy Produce (Price Stabilisation) Acts. The levy on butter sales is at present utilised and will continue to be utilised under the machinery of the Board to meet the cost of cold storing butter for winter use. The levy on butter stocks is for the purpose of preventing butter traders from benefiting overnight from the increased value of their butter stocks in the event of a decision to increase the price of butter. All these levies are at present paid into the dairy produce (price stabilisation) fund. Any balance remaining in that fund when the Board has been established will be transferred to the Board.
As I already stated it is proposed to pay the Board each year out of moneys provided by the Oireachtas a grant or grants of such amount as I, with the consent of the Minister for Finance, may fix after consultation with the Board, in relation to its programme for that year. The use to which such a grant will be put by the Board will be specified in writing at the time of the payment. It is specifically laid down in Section 31 (4) of the Bill that a grant shall not be used to defray more than two-thirds of any loss incurred by the Board on the export of milk products or any support given by the Board in relation to the export of such products. This will ensure that the dairy industry will continue to contribute its share of export losses.
The price payable to producers for milk for manufacturing purposes will continue to be supported through the home market support price payable to creameries for butter. The Board will be required to buy all suitable butter manufactured by creameries at the price prescribed by the Government and the Board's selling price of butter on the home market will also be determined by the Government.
The Board is being empowered to borrow from time to time with my consent such sums as it considers necessary for capital or current purposes. The maximum loan which I, with the consent of the Minister for Finance, may guarantee to the Board is fixed at £5,000,000. Provision is made in the Bill for the laying before each House of a statement giving particulars of guaranteed loans and the amounts outstanding at the end of every financial year.
The Board will be required to establish and maintain a Dairy Produce Fund into which all moneys received by the Board will be paid and out of which the purchase price of milk products, the Board's expenses in connection with such purchases and its outlay in performing its functions under the Bill shall be paid. It will also be required to keep all proper and usual accounts and to submit those accounts to the Comptroller and Auditor General for annual audit. When audited these accounts and a copy of the report of the Comptroller and Auditor General thereon will be laid before each House.
I may say here that there are some references in the Bill to existing legislation which I have endeavoured to clearify in notes which have been circulated.
Before I conclude I should like to take the opportunity of acknowledging on my own behalf and on behalf of the Government our indebtedness to the members of the Advisory Committee on the Marketing of Agricultural Produce for the ready manner in which they gave their time and energy in the service of the public. I should also like to express my appreciation of the services rendered by the members of the Butter Marketing Committee who have carried out their functions quietly and efficiently over the years.
I am fully aware that the Board which it is proposed to establish under this Bill will have an onerous task but I am sure that, with the co-operation of all concerned, it will succeed in securing a permanent place on the world markets for our dairy products.
I trust this Bill will commend itself to the House. I should also mention that the text of the Bill as circulated contains a few minor inaccuracies and I propose to have them corrected on Committee Stage.
