Quite a lot has been said about this increase of 2d. but I welcome the increase for three reasons. First of all, I welcome it because it will grant some measure of relief to our hard pressed dairy farmers. Secondly, I welcome it because I hope it will help to secure the increased milk output which is now necessary and thus help us to meet our export commitments during 1964. The third reason I welcome the increase is one which has been overlooked by most other speakers in this debate. I am hopeful that as a result of the price increase, the output of milk will expand to the extent that it will prevent the closing down of our creameries as recommended in the report of the survey team which examined the dairy products industry. Indeed, in a constituency such as East Limerick where industrial employment depends almost entirely on the products of the dairy farmer—and the same applies to workers in the city of Limerick—it is only natural that I should be concerned with this aspect.
I was very much surprised at the attitude adopted by some Deputies towards this increase and particularly at the attitude adopted by Deputy Coughlan from my own constituency when he spoke here last week. He referred to the demands of the dairy farmers and said that the protest marches were organised by ranchers and that ranchers' sons participated in them. Possibly he did not realise what he was talking about. I saw the people who marched in the city of Limerick and from my own knowledge I doubt if there was any rancher amongst them. If Deputy Coughlan looks at the Statistical Abstract he will find in Table 71 that 85 per cent of the farms in County Limerick are under £50 valuation and something like 66 per cent of the farmers are under £30 so I do not know where the question of ranchers comes in. An interesting sidelight on the question of the increase in the price of milk granted in the Budget is to be found in a report of a symposium held last week at Newcastle West and attended by Mr. O'Reilly, general manager of An Bord Bainne. Mr. O'Reilly said that the increase in the price of milk was very significant as well as being much deserved and much needed. He went on to review the efforts of Bord Bainne to reorganise the marketing of dairy products and in this connection he mentioned a most important point. In 1964 the Board, in fact, found itself faced with a shortage of milk to match the requirements of its export commitments. It was anticipated, said Mr. O'Reilly, for the current year the total availability of milk for international and domestic needs would be something like 350,000,000 gallons or 7,000,000 gallons less than last year. This being so he hoped that the increased milk price would help to stimulate production and enable them to meet their commitments in the markets they had established abroad.
Personally, I have never taken a narrow view on this question of an increase in the price of milk being of value only to the dairy farmer. I am glad to see that my views have been borne out in the statements I have quoted. There is another aspect also. One of the subjects under discussion at this symposium concerned a powdered milk factory, for which negotiations had been going on for a year and a half, and which had not materialised. Mr. O'Reilly said any further diversification would upset the programme for 1964. Another speaker, Mr. Patrick Kelly of the Irish Agricultural Organisation Society, said that in his opinion it would be disastrous at the moment to establish any further milk powder factories in view of our present commitments on the home and export butter markets.
The increase in the price of milk is very much overdue and is very much needed. Because the increase was not granted long ago we now have a situation in which we are faced with a shortage of milk to meet all our export commitments. On the other hand, in County Limerick at least, we have lost one industry because proper encouragement was not given to milk production in recent years. While I welcome the increase I do not admit that it is a generous concession. In fact, it does very little more than cancel out the levy and certainly bears no relationship to the increased cost of milk production over the past decade. I regret that it was not found possible to grant a worthwhile increase when the decision was being made, an increase which would really stimulate increased output and enable existing milk processing industries to operate at full capacity and also enable further processing industries to be established.
Some speakers expressed the fear that an increase in the price of milk would automatically lead to an increase in the price of butter. I do not accept that argument and I am very glad the Minister for Industry and Commerce allayed any fears there might be in that respect. The argument that an increase in the price of milk would automatically lead to an increase in the price of butter has been expressed time and again over the past decade as a reason for not granting an increase in the price of milk. I do not accept that argument. The dairy industry occupies such an important place in our economy that it merits special consideration in the matter of State assistance.
I am not merely referring to farmers. There are something like 100,000 dairy farmers. I am including their families, workers employed by dairy farmers, workers employed in creameries and in the various processing plants. Then, of course, there must be taken into account the exports provided by the dairying industry and directly and indirectly, the key place it occupies in the production of cattle. Although I have not been able to find any definite figures for it, I believe that every £1 million invested in the dairying industry by way of Government subsidy would yield a far greater dividend than £1 million invested in any other direction.
The next concession that has been granted to agriculture is an increase in the price of pigs. This is also a very small concession but, as a Deputy for a constituency which has been traditionally associated with the bacon industry, which in recent times has been trying to operate in very difficult circumstances, I hope the concession, small as it is, will stimulate and increase pig production and thereby prevent the wholesale closure of bacon factories which was recommended in another report produced during the past year.
The next item is the rate relief. This, of course, is a valuable concession also but, again, it is very small and, in fact, is merely a stop-gap measure which does not attempt to solve the overall problem represented by the incidence of local taxation. I understand that somebody has been examining the structure of local taxation over the past few years. It is high time something was done to reduce the colossal burden represented by rates, not merely on the farmer but also on the urban dweller. This Budget has not brought a solution to that problem any nearer.
Having dealt with the concessions that have been granted, I want to say a few words about the additional taxation. First of all, the increase in the price of petrol is a very bad thing. It will add considerably to transport and manufacturing costs and will have an adverse effect on the tourist industry. In recent years the number of British tourists who have been coming here for a motoring holiday has been increasing, as has the number of tourists hiring self-drive cars. I fear that the increase in the price of petrol will have a very adverse effect in that connection. Up to now we have been finding it difficult to compete with continental countries in attracting tourists who desire a motoring holiday.
Apart from the tourist industry and apart from the additional cost to manufacturing industries and business in general, the increase in the price of petrol will affect everybody, including workers, many of whom now have to use a small car or motor-cycle in order to get to their work.
Time alone will tell whether the law of diminishing returns will operate in relation to the increase in the price of cigarettes. Last year, in his Financial Statement, the Minister seemed convinced that the law of diminishing returns would operate. In view of the research that has been carried out as to the relationship between cigarette smoking and cancer and the publicity that research has received, there is every reason to believe that the further increase in the price of cigarettes this year will be followed by a reduction in cigarette smoking.
A great deal has been said about the increased Post Office charges. That is also a serious matter. There is very little justification for them.
When referring to the concessions granted in the Budget, I omitted reference to the five per cent increase granted to State pensioners. It is doubtful if it can be called concession. In my opinion it is ridiculous and the less said about it the better. The whole approach to pensioners is entirely wrong.
To come to the general from the particular, may I say that in previous Budget debates I have referred to the increased cost of public administration? This year the situation is even wrose. Not alone has there been no brake applied but it does not seem that any attempt has been made to effect economies in the cost of public administration. In recent years the Taoiseach and other Government spokesmen have been exhorting business firms and management to modernise and to gear their industries to greater efficiency. Surely, in this age of scientific management and efficiency expertise, it should be possible to effect some economy in the cost of public administration?
In regard to savings, the position last year was somewhat disappointing. That is not surprising in view of the increase in the cost of living. Prize bonds continue to be a valuable instrument of saving. On previous occasions I made the suggestion that it might be worthwhile to experiment in order to see if a reduction in the value of the bond would lead to greater investment. I suggested a figure of £2 which might bring bonds within the reach of the ordinary worker.
There is another method of saving to which I also referred in a previous debate. It is the unit trust. As a method of investment and saving the unit trust has made tremendous strides in Britain in recent times. In fact, there has been an overflow into this country in recent months. I have been considering if it might be possible to introduce a system of unit trusts based on the semi-State companies. I do not know whether that would be feasible or not. If it were, it would be very desirable. A unit trust is a tremendous instrument of saving. Its main advantage lies in the fact that it brings the investment within the reach of the smallest investor. It would be an encouragement to workers, particularly workers in large industries, to invest in such industries, thereby giving the workers a better interest in the running of industry.
I take it the Budget is an appropriate measure on which to discuss the general question of economic development. We have come to the end of the first five-year programme and have been issued with the outline of the Second Programme which will take us up to 1970. Before looking at the Second Programme, it is well to take stock of the progress or lack of progress achieved by the first one. Despite all the boasting there has been about the success of the First Programme, when it is subjected to close examination and critical analysis, it will be found that its achievements were very few indeed.
Let us look at a few facts and figures. I realise a considerable amount of time in this debate has been taken up with quotations from statistical abstracts and official publications. I do not intend to bore the House any further with those, but I should like to give a few relevant figures. Taxation has increased each year to a record figure of £250 million last year. This year £82 million will be borrowed. The national debt has also gone up. The cost of running the country has gone up by £100 million in seven years. Our adverse trade balance is £110 million and we had an adverse balance of payments last year of £22 million.
The question of employment is a very important criterion in an economy such as ours. There are 70,000 fewer people employed to-day than there were in 1956. On 4th April this year, there were 57,957 unemployed, 200 more than a year ago and 3,000 more than two years ago. In that period more than a quarter of a million emigrated and last year, according to the Minister for Health, who, over the week-end, thought it well to clear the air, admitted that 25,000 people emigrated. The numbers employed on the land have gone down by 54,000 since 1957.
Another method of gauging progress is a study of housing. Statistics have been quoted lavishly here on this subject. During this debate last year, I gave detailed statistics on housing and recall that the Parliamentary Secretary, Deputy O'Malley, who followed me then, was somewhat annoyed that he was not permitted to go into it at similar length. This year, I shall not quote figures because they are now so well known. However, I came across a very interesting document relating to housing which I think the House should be made aware of.
The same document was referred to earlier this year by Deputy Declan Costello during a debate on the Estimate for Local Government. The Irish Times, on Monday, August 5th last year, published a report furnished by the Housing League, an international organisation which obtains from all European countries figures of the average number of houses per thousand of the population built in given periods. In 1962, 23 countries were included from Western and Eastern Europe. Of them all, the country with the lowest number of houses built per thousand of the population was Ireland.
For any Deputy, the acid test of Government policy, the real indication of progress or the lack of progress, will be found in his own constituency. In dealing with the question of economic development, I realise it is a bad thing to be parochial in one's outlook but, at the same time, no Deputy can ignore the evidence he finds in the area he represents. In the constituency of East Limerick, for which I have the honour to be a Deputy, we have an excellent basis for the study of the progress or otherwise of Government policy because it includes a large urban area—Limerick city—medium and small farms, small towns and rural villages.
The picture in the rural part of the constituency is, I suppose, no different from most other constituencies. There are decaying towns and villages, small farm houses locked up, roadside cottages locked up. In a survey carried out within the past six months, the county manager found there were 135 cottages locked up in Limerick. Because of conditions in small homesteads, the shutters have been going up. Small shops in towns are being locked up as well.
I recall a sentence generally used at the outbreak of the last war in 1939: "The lights are going out all over Europe." From my knowledge, the lights are going out all over rural Ireland at the present time. I have given an authoritative figure of 135 cottages locked up. In the city of Limerick, to which I referred earlier when dealing with the dairying industry, the bulk of industrial employment is in the traditional food processing business. There has been, for the most part, a lack of new industrial opportunity for employment during the past four or five years, and the 1961 census showed a reduction in the population of Limerick city.
I could quote statistics at length but if we examine the first five years of the Government's expansion programme from the point of view of the country as a whole, and from official statistics published, we find the picture is not good. If we study it from the evidence in our own constituencies, we shall find it equally bad. With the experience of the first plan behind them, it was only logical to expect that the Government would have learned a lesson from their mistakes and that they would have taken appropriate action.
Instead, we find in the second plan only a rehash of the first. No doubt, if implemented it will lead to the same disastrous result. I am convinced that the Second Programme for Economic Expansion will merely continue the policy pursued in the first and will not achieve the targets which have been set for it. I am further convinced that as long as the Government hold office and pursue the same inane policy, we can forecast the same Budget story for future years—more emigration, less employment, higher taxation, poorer social services and fewer benefits.
I believe that it is vitally necessary that we should make a critical reappraisal now of our whole economic development. There must be a willingness to admit past failures and mistakes and there must be a courageous determination to adopt new ideas, new attitudes and a new outlook on this whole question of economic development. One of the most controversial issues in current discussions on economic development is the role of agriculture in an expanding Irish economy. This controversy has been intensified by the publication of the Blue Book, the Second Programme for Economic Expansion. This controversy is very interesting because it emphasises in a very striking manner the fundamental difference in outlook and policy between Fianna Fáil and Fine Gael.
It is now quite obvious that the Government believe that, while agricultural expansion may be desirable, it is not an essential condition for economic growth. This, of course, is a traditional Fianna Fáil approach to economic development. We, in Fine Gael, on the other hand, believe that agricultural expansion is an essential prerequisite for overall economic expansion. Instead of formulating a comprehensive development plan, embracing agriculture as well as industry, the Government have been approaching these two sectors of our economy as if they were completely distinct and separate entities.
There is a marked difference in the approach to the planning for agriculture and the planning for industry. This was brought home when the NIEC was set up and when it became known that agriculture was omitted from it. This omission of agriculture from NIEC has been widely commented on. I believe that the omission was a bad thing. In the Blue Book, the target for agriculture is set at 2.7 per cent and that for industry at seven per cent. Even with that small target of 2.7 per cent. provision is made for industry to enter the picture and step up its contribution in the event of agriculture not reaching this low target. The expansion target set out in the Second Programme will mean a loss of 66,000 workers in agriculture and an increase of 86,000 workers in industry.
It is very difficult, in my opinion to find any grounds for justifying this differential in targets as between industry and agriculture. It is very difficult particularly when we consider that the Second Programme for Economic Expansion is based on the assumption that Ireland will be a member of EEC by 1970. We know —indeed, it became very obvious a year or two ago — that there will be considerable disemployment in industry in the event of our entering EEC. On the other hand, we have been told, and all the experts seem to think, that entry to EEC will open up new opportunities for agriculture. One would have thought, in view of the fact that this Blue Book has been produced on the assumption that we will go into EEC in 1970, that the question of agriculture would have been looked at in a new light, in the light of the opportunities presented by entry to EEC and, more particularly, in the light of the difficulties which will be created for industry.
We, in Fine Gael, do not accept this target of 2.7 per cent as a realistic one. We think—I personally am convinced —that if we are to have a continuance of the agricultural policy pursued by the Government over the past five years this 2.7 per cent might even be optimistic. We, in Fine Gael, believe— I have no doubt whatever—that if we are given a realistic, progressive, dynamic agricultural policy this target of 2.7 per cent could be exceeded; in fact, it could be doubled.
Two very interesting documents have been produced in recent months, two documents which have a very important bearing on this whole question of agricultural development. I refer to the document produced by the National Farmers Association and the document produced by Mr. Raymond Crotty on behalf of the Irish Creamery Milk Suppliers Association. These two major organisations are to be complimented on having produced these documents. The NFA document represents a major contribution to economic thinking. It is a study of the development potential of Irish agriculture.
Anyone who is concerned not merely with the development of Irish agriculture but also with the development of the Irish economy as a whole should not ignore this document. It is the result of considerable research and its findings and recommendations are based on logical reasoning and hard facts. Indeed, this NFA document, with its well reasoned, factually sound arguments and, in particular, its tone of optimism and confidence in the ability of Irish agriculture to play a major role in economic development, is in direct contrast to the dull, complacent, uninspiring, unimaginative document which has come to be known as the Blue Book. The NFA sets a target of four per cent per annum, a target which would maintain the present numbers on the land.
The other important document, that produced by Mr. Raymond Crotty, one of the leading agricultural economists in these islands, was produced at the request of the Irish Creamery Milk Suppliers Association. Mr. Crotty's study corroborates the NFA study except that he places the target slightly higher at five per cent. He argues that, unless this target of five per cent increase in agricultural output is achieved over the next five or six years, overall economic expansion will not reach the target expected in the Blue Book. I believe these two documents together form a perfect basis for planning. They should have been welcomed by the Taoiseach and the Government, at least as a basis for discussion on our economic policy. Instead of that, the Taoiseach has rejected both documents as wishful thinking.
The question of the role of agriculture in a developing economy is an interesting one. It is not merely one in which the farmers organisations are interested but which has been the subject of much study by economists throughout the world. I have here a report of a paper read to the Statistical and Social Inquiry Society of Ireland by Mr. E. A. Attwood who, I understand, is an economist with the Agricultural Institute. The paper, entitled Agriculture and Economic Growth in Western Ireland, was read to the Society on the 27th April, 1962. I quote from the introduction to this paper which is very relevant and significant to the present discussion:
In the development of the economy of the Western Counties of Ireland industrial expansion, in order to diversify employment opportunities, has been given considerable prominence and insufficient attention given to the need for agricultural development. The need for new industries is obvious, but the total numbers employed currently in industry is less than 12 per cent of those in agriculture; an increase in agricultural productivity is of critical importance if the level of national income produced in these counties is to be brought much closer in line with that of the rest of the country.
In the same issue of the Journal of the Statistical and Social Inquiry Society of Ireland there is a paper entitled A Dynamic Model of the Irish Economy, produced by Senator Professor P. M. Quinlan of University College, Cork. I do not intend to go into detail on this. I shall merely quote the conclusion:
In short, for the provision of increased employment and a rising standard of living, we need to maintain our present rate of expansion in Industry and to double our present rate in Agriculture.
That is not all. I have here a summarised report of the Eleventh International Conference of Agricultural Economists published in the Economic Journal, the quarterly journal of the Royal Economic Society for March, 1964. In this summary there are passages quoted which are most relevant to what I have been saying:
It can be shown algebraically that when agriculture is more than half the economy and produces much less per head than the non-agricultural sector, any growth that begins ... in the non-agricultural sector ... will not go far unless, and within a short time, there is a substantial rise in output per worker in agriculture.
The Taoiseach, speaking on the Budget last week, took a line which completely differed from that which has been taken by the various authorities I have quoted. I quote from column 1783, volume 208, of the Official Report of 15th April, 1964:
In programming a 2.7 per cent annual increase in agricultural output the Government were setting forth a view as to what was practicable and probable rather than what is desirable. There is no doubt that Irish agricultural potential would permit of a much more rapid rate of expansion, if market openings could be assured for the higher output.
Then, having realised, perhaps, the tone of gloom and pessisism which he had set, he said at column 1784:
There is no reason for pessimism regarding world needs for the kinds of foodstuffs that are produced in this country.
Why do we not encourage production instead of trying to put a barrier against it? Again in this report of the symposium to which I have referred, Mr. O'Reilly, in commiserating with the Local Development Association in Newcastlewest for the loss of its industry, said he was sorry to have to make the statement in view of the enterprise shown by the local association but it was decided the position could be reviewed by 1970 and that by then it was hoped to have doubled the intake.
I have no doubt that, taking into account the tremendous strides that have been made by Mr. O'Reilly and An Bord Bainne, looking at the tremendous break-through in the food processing field by the Irish Sugar Company, looking at the new markets for Irish foodstuffs which have been opened up abroad over the past year, the target of 2.7 per cent is ridiculous. I have the fullest confidence in the ability of our farmers to produce efficiently if they are given the proper encouragement and incentives. I have the greatest confidence in our food processing enterprise and in our marketing board.
I am convinced that the Second Programme for Economic Expansion will not succeed and that the most urgent need facing the Government at the moment is to create the economic climate which will make progress possible. Towards this end there is need for a reassessment of our aims and objectives. There is one instrument of economic and social progress which, so far, the Government have not been utilising to anything like its full potential. It is what has now come to be known in international terminology as community development. We have been hearing and reading quite a lot in recent times about community development but there are very few who yet seem to realise the significance of it. Certainly there is no indication that the Government intend to adopt this instrument of economic development. Community development has come to be recognised throughout the world as a major instrument of economic and social progress. It has been utilised most effectively by UNESCO and, in fact, many Governments now have special departments co-ordinating, stimulating and organising community effort towards economic and social progress.
Here in Ireland we know something about community development. In fact, there have been numerous examples of successful experiments having been carried out, particularly in the fields of local government, agriculture, industry and tourism. In fact, all the pioneering work in community development has been done by Muintir na Tíre. It is a matter of no little pride to us here in Ireland that this modern method of development, which is now being accepted throughout the world, was pioneered here a quarter of a century ago by the late Canon Hayes. Unfortunately, when one speaks of community development, whether it be here or down the country, one is accused of engaging in academic discussion. I should like to assure the House that I have no intention of engaging in academic discussion on this question. In fact, I am concerned with the practical application of this new method, this new modern concept, to the problems of this country.
Indeed, I can speak from personal experience in this field. I happen to be associated with a local agricultural development group in my own parish. This group has been in operation for the past three years and through the application of the principle of community development and co-operation it has succeeded in three years in increasing output by 43 per cent. That is an annual average of 14 per cent increase in output. The Taoiseach says 2.7 per cent is a realistic estimate.
I have seen how this method of community development can be successfully applied in the matter of promoting group water schemes. In fact, I think the Government must have learned a lesson in regard to these schemes, because I am sure that if it were not for the fact that Muintir na Tíre forced the issue and went ahead with the organisation of these group schemes, the colossal, costly regional schemes which had been planned three years ago would have gone ahead and would have cost a good deal more. I am sure the Government must have been aware of the way in which the principle of community development can be applied to the promotion of tourism and to the promotion of local industry. All this has been going on, I admit, but what I am perturbed about is the colossal wastage of effort and the lack of co-operation between the Government and the voluntary organisations, local development associations, and so on.
I want to go back again to the report of the symposium to which I have already referred, which was summarised in the Limerick Leader, on Saturday, 18th April, 1964. The Secretary of the Newcastlewest Development Association, referring to the loss of the industry to which I have already adverted, said that the Association had spent fifteen months negotiating for this industry, that, in fact, it had sent a representative to Germany. Mr. O'Dwyer said that this Association would have been saved a lot of time, effort and expense if they had been told of the position when they started their campaign about fifteen months ago. There should be more intercommunication between semi-State bodies and local voluntary organisations.
The Taoiseach referred to this community development idea. In fact, I think he attended a seminar at Gormanston College last year. A very detailed report of that seminar has been produced. It is interesting to note from that study that all the experts who came here and examined our economic and social problems are agreed that community development cannot be overlooked and must be utilised if we are to progress in this country. We have good experience of applying this method of community development to the promotion of industry, the organisation of agriculture and the promotion of local initiative in tourism, and in the matter of the provision of rural water supplies. We have considerable experience of it and all that is necessary now is for the Government to adopt this method as official policy.
I believe if the Government could harness this vast reservoir of local initiative, local enterprise and goodwill we could achieve a rate of progress which has never before been envisaged and which many people think now would be impossible. If any Deputy wishes to examine the possibilities of the method of economic development known as community development, there is a very comprehensive report in the current issue of Administration. It consists of a number of articles by various experts. I should like to quote one particular paragraph, which is very relevant. It is an article entitled “Local Government and Community Development,” paragraph 2. The writer here quotes from the United Nations Report, Concepts and Principles of Community Development:
The term "community development" has come into international usage to connote the processes by which the efforts of the people themselves are united with those of governmental authorities:
1. to improve the economic, social and cultural conditions of the communities;
2. to integrate these communities into the life of the nation; and
3. to enable them to contribute fully to national progress.
As I said, I felt compelled to deal with this particular subject. I feel it is very relevant to the Budget debate where we discuss the general question of economic development. From my own experience I am really sold on this idea. I believe the Government have given it some thought judging by the statement of the Taoiseach at Gormanston, but I feel now that we are embarking on a Second Programme for Economic Expansion this is the time to get down to an examination of how the methods of community development, which have been so successfully applied in other countries, can best be applied here on an organised approach.
I shall summarise what I have been saying here about economic development. I believe we need, first of all, a realistic and enlightened Government economic policy. We have not had that up to now and there is no indication in the Blue Book that we will have it over the next six years. Secondly, we need a comprehensive development programme embracing agriculture, industry and tourism. We have had programmes in the past but programming is not enough. We need rational planning to give effect to these programmes. Yesterday, my colleague, Deputy Declan Costello, adverted to the important factor of planning as opposed to mere programming.
Finally, and perhaps most important of all, we need dynamic leadership from the Government, leadership which will stimulate and encourage local initiative to make the best use of all our resources.
