Coming from Limerick, a constituency so closely associated with milk and bacon production, it is natural I should have an interest in the parts of the Minister's speech dealing with these two important arms of our agricultural industry. For me, the Minister's speech was remarkable not so much for what it contained but rather for what it omitted. The most serious defect in it was the lack of any detailed reference or clearcut expression of opinion on two recently published documents which will have a vital bearing on the development and progress of Irish agriculture.I refer to the reports of the survey teams which investigated the dairying industry and the bacon industry. Most people had expected that the Minister would avail of this opportunity to give us some idea of his views on these two important documents. In particular, we were hoping he would give us some indication of how far the Government would be guided in their policy for agriculture by the revolutionary recommendations contained in both of these reports.
Each of these reports contained a variety of recommendations. The most important were those which recommended that a large number of our creameries and bacon factories should be closed down. They recommended a reduction in the number of creamery undertakings from 197 to 30 and also that the 600 premises in operation should be reduced to 150. The fact that the wholesale closure of our bacon and milk-processing plants should be recommended in the year 1963 is a terrible reflection on Government policy in recent times. It represents a complete contradiction of the targets proposed for agricultural expansion in the Blue Book. I believe if we had been given a realistic policy in recent years, the output from our farms would have reached the stage where we would not alone be utilising the capacity of our existing plants to the full but would be taking steps to expand them and erect new ones instead of closing down so many now.
The omission of detailed reference to these reports in the Minister's speech is a very serious one. My reaction to it was that perhaps the Minister and the Government had decided not to go ahead with the implementation of the recommendations contained in the reports. However, a short paragraph in the Blue Book, Second Programme for Economic Expansion, leads me to think otherwise. Paragraph 41 states that the recent survey of the dairy industry had shown there was considerable scope for better returns to creameries and farmers through improved organisation. I do not accept this at all. In view of what has been stated in the Blue Book and the danger that the Government will be influenced in future policy making by the recommendatitons of the survey team, it is necessary we should avail of the opportunity presented by this debate to make as close an examination as possible of the possibilities of the dairy industry.
I have before me the observations of the four organisations vitally connected with the dairy industry. They have been unanimous in their rejection of the main recommendations of the survey team's report. Any attempt to implement the main recommendations of this report without thorough examination of its implications could involve most serious consequences for the dairying industry. It would be fatally easy to embark on costly changes which not alone might be socially undesirable but economically disastrous.The vital importance of the dairying industry in our economy should now be fully recognised; I do not think adequate recognition has been given to it. Unless that is done in the immediate future, I am convinced the targets for agricultural expansion set out in the Blue Book can never be achieved.
The increased output of cattle and high quality milk envisaged in the Second Programme for Economic Expansion will primarily depend on the co-operation of creamery farmers in the dairying areas. They own about 55 per cent of the cow herds. Pig production, while perhaps secondary, is closely related to the economy of the dairy farmer. If the Blue Book targets are to be achieved, the dairy farmers must be enabled to improve the carrying capacity of their holdings, increase their dairy herds, modernise cowbyres and install necessary cooling equipment and water supplies. There is no doubt of their ability to increase output or about the capacity of their farms to carry increased stock, provided — this is important — adequate assistance is available to them. The assistance by way of grants, credit and advice at present available is totally inadequate to permit of any improvement taking place and the first step towards achieving the Blue Book targets must be a new deal for the dairy farmer.
The new heifer scheme will not be much use to the average dairy farmer because most of them are carrying as many cows as they can afford and the scope for expansion is very limited. Taking into account the present system, the £15 grant is not going to be nearly sufficient incentive to increase herd numbers. The possibility of increasing these numbers and increasing output of high quality milk is very great but we must be realistic, and there is no point in setting targets unless we get the means to achieve them. If we want to increase the number of cows, the dairy farmer must have the capital to make up the difference between the £15 grant and the actual cost of the animal which would now run to about £50. To carry the extra stock on the average dairy farm, the farmer will have to improve the carrying capacity of the farm. This will mean more liberal use of fertiliser, new techniques in grassland management and conservation for winter feeding and will entail very large capital outlay which the average dairy farmer is not at present able to meet.
It will also make increased demands on our advisory services which are now totally inadequate. Any increase in cow numbers will lead to an increase in milk output. There is scope there: in fact we have a recent statement by Mr. O'Reilly of An Bord Bainne that about 20 million extra gallons will be needed next year to meet our export commitments. It is vitally important that the milk should be of the highest standard. To produce high quality milk is not easy. Most dairy farms will have to improve byres or erect new ones, adopt a milk parlour or open yard system, new equipment will need to be installed, including, perhaps, milking machines, cooling equipment and running water.
All these improvements are recommended in the report but while the team pointed out the need for improved quality of milk and showed how that could be achieved, no attempt was made to show how or where the farmer could find the capital to effect these improvements. It is foolish to think that the average dairy farmer at present can effect such improvements. For example, the grants available now for the improvement of cowbyres amount to £9 per cow for the erection of a new byre up to a limit of £15. That is a total of £125. From inquiries I have made from farmers who have erected them, it costs between £30 and £40 per cow for a new byre. I was in a cowbyre on Monday which cost £37 per cow. The dairy farmer with 25 or 30 cows who decides to erect a new byre will have to spend between £1,200 and £1,500 and the maximum grant will be £135.
For reconstruction of an existing byre a grant of £5 8s. is given to a maximum, again, of 15 cows or a total of £81. This goes only a very small part of the way in meeting the cost of reconstruction and improvement.One of the things that it is most difficult to understand is the fact that the farmer who erects a milking parlour gets very little assistance. I am convinced from experience that the only way to get top quality milk is by means of a pipeline milker. The ordinary bucket machinery is becoming obsolete. The device of the future will be the pipeline milker taking the milk direct from the cow to the churn. The cost of erecting a milking parlour is at least £400, and the building to hold the equipment will cost anything from £200 to £400. The average expenditure then is £700 to £800. The maximum grant available is £20. I am informed that this grant of £20 is not specifically available for a milking parlour. I saw the list of grants available and milking parlours are not included in that list. The only way in which the £20 can be claimed is if a milking parlour is put in as a loose shed for livestock.
There are no grants available for milk coolers, another vital piece of equipment. The assistance available to the farmer at present, particularly to enable him to improve the quality of his milk, is totally inadequate. I realise it is no use being critical if one cannot put forward some concrete suggestions. I believe the only incentive which means anything to the dairy farmer is an increase in the basic price of his milk. The heifer scheme will not effect any great improvement. The grants are wholly inadequate. The first and most important step is to give the dairy farmer an economic basic price for his milk.
Secondly, the farmer will have to be compensated for the extra trouble the production of high quality milk entails. I agree with the recommendation of the survey team that a bonus be paid on a special grade of high quality milk. Thirdly, there is need for credit facilities. I stated here before that I have plenty of evidence to show that a large proportion of the dairy farmers have obtained the maximum credit they could obtain.
If we are to effect all these improvements and reach the target set out in the Blue Book, there will have to be an improvement in the credit facilities available at the moment. I have been told—I have not had time to check—that interest rates on agricultural credit here are the highest of any agricultural nation in Europe. I am also told that the agricultural credit available in Denmark, one of our biggest competitors, carries an interest rate of 1½ to two per cent. From that point of view alone, the suggestion made by the Leader of the main Opposition, Deputy Dillon, with regard to the provision of £1,000 interest-free loans for farmers is wholly excellent and I was surprised that there was so much criticism of the suggestion by the Government Party. Deputies on both sides who are familiar with the present set-up in the creamery areas will agree that improved credit facilities are very much needed.
Fourthly, there is need for advisory services. The survey team were concerned mainly with advice being made available to farmers to enable them to produce the quality milk now so necessary. I am in complete agreement with that. There is need for advice on the efficient operation of new machinery and equipment. I have known dairy farmers to install milking equipment without receiving proper instruction on the actual operation of that machinery; the results were disastrous. There is need for advice on hygiene, avoiding diseases like mastitis, and so on. I am in complete agreement with the need for providing adequate advisory services.
With regard to the dairying industry, the survey team deals at length with the present organisation of the creamery industry. They say there are too many small units. They recommend that a considerable number of creamery premises be closed down and that processing should be concentrated on large centrally situated units. They recommend that the present method whereby producers carry their milk to the creamery should give way to alternative methods of milk collection. A number of such methods are dealt with, such as bulk transport by tanker and multi-can haulage. The team has not given any comparative costs. I know one place in Limerick where multi-can haulage is in operation. The cost is 1½d per gallon. The IAOS has supplied me with figures for operations of this kind in other places; 2d per gallon is the average cost of transport. It must be remembered that the distance at present is not a long one because in the intensive dairving areas one does not have to travel very far before one finds a creamery. The question is: what will it cost to transport that milk a much longer distance to the larger centrally-situated processing unit intake point, the intake being anything from 15 million to 20 million gallons? It will cost a good deal more.
There are also the costings which have been done by the IAOS which show that the present system of cream separating station is operating for under a penny a gallon. So that the suggestion that the small creameries be closed down and processing be concentrated does not seem to stand up to any analysis in the matter of costs.
As I have already said, it is significant that the four organisations, the National Farmers Association, the Irish Creamery Milk Suppliers Association, the Irish Creamery Managers Association and the IAOS, while admitting that there will be examples of small creameries which could economically be closed down, do not accept this suggestion that the wholesale closing down of the small creameries and the substitution of bulk transport for the present method will achieve any worthwhile economies.
I am trying to be as fair as possible and I have expressed agreement with a number of the findings, but one of the worst features of the report is the apparently hostile attitude of the survey team towards the co-operative idea of organisation. The report shows a complete misunderstanding of the principles and practices of co-operative undertakings. The members of the survey team have shown a lack of appreciation and understanding of the basic principles applying to co-operative organisation and they also appear to know little or nothing about the practical working of the committees of co-operative creameries.
In one part of the report a suggestion is made that if the creamery industry had been organised on non-co-operative lines it would have developed very differently and of course, by implication, with better efficiency. This attitude of hostility towards the co-operative idea of organisation is very difficult to understand because throughout the report reference is made to the efficiency of the Danish dairying industry and the team seems to have forgotten that the Danish dairying industry is organised almost entirely on co-operative lines.
While the survey team dealt at length with the co-operatives and succeeded, I must say, in showing them up in a very poor light, very little reference was made to the Dairy Disposal Company which is responsible for 25 per cent of the intake in the creamery areas. The Dairy Disposal Company was in an ideal position to take the initiative in pioneering new developments in the creamery industry as it possessed both vertical and horizontal integration but what steps have the company taken to rationalise the creamery industry? What are its costings? How does the fact that in County Clare it controls the dairying industry from three centres help in the matter of economy? Is it not a fact that the co-operative creameries, by and large, pay a better price to the producer than the Dairy Disposal Company pay?