I move:
That a sum not exceeding £15,695,700 be granted to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st March, 1965, for the Salaries and Expenses of the Office of the Minister for Agriculture, including certain Services administered by that Office, and for payment of certain subsidies and sundry Grants-in-Aid.
The total net Estimate for 1964-65 shows a decrease of £388,300 on the original net Estimate for 1963-64, which amounted to £24,047,000. Including two Supplementary Estimate provisions for 1963-64 of £10 and £1,215,000, the final total Estimate for that year was, in fact, £25,262,010.
As compared with the original Estimate for 1963-64, the following subheads in particular show substantial increases: N. — Marketing, etc., of Dairy Produce; K.8—Lime and Fertilisers Subsidies; K.6 — Farm Buildings Scheme; K.14—Scheme of Grants for Calved Heifers (new item); K.13— Brucellosis Eradication Scheme (new item); I.6—An Foras Talúntais.
In addition to the Scheme of Grants for Calved Heifers (K.14) and the Brucellosis Scheme (K.13), the following subheads appear in the Estimate for the first time: K.15—Scheme of Grants for Forage Harvesting Equipment; C.6—Contribution to the Irish Meat Association.
The following subheads show substantial decreases as compared with the original Estimate for 1963-64; K.11 — Bovine Tuberculosis Eradication Scheme; K.17—Payments to Pigs and Bacon Commission; K.18—Losses on Disposal of Wheat.
Deputies have received a memorandum entitled Notes on the Main Activities of the Department giving detailed information on the operations of my Department and on various trade and economic matters with which it is concerned.
Gross agricultural output, including livestock changes, increased by almost £1 million in 1963, but net agricultural output declined by about the same amount, due largely to a lower yield of grain per acre.
The value of agricultural exports in 1963 reached the record figure of £119.4 million—nearly £14½ million greater than 1962.
As already announced, the Government decided earlier this year on a number of measures to increase farmers' incomes and keep them in reasonable relationship with the increasing incomes of other sections of the community. These measures, which include an increase of 2d. per gallon in the price of milk; an increase in guaranteed prices for pigs; further relief of rates on land amounting to £1.4 million; and a higher minimum price for feeding barley, will represent an increase of about £6 million in farmers' receipts over a period of twelve months. The price for sugar beet was also increased. All these measures, and the higher prices ruling for cattle, will represent a substantial improvement in the economic position of farmers. The cost to the Exchequer is considerable but is fully justified.
For some time past, my Department has been engaged in preparing, in co-operation with the Department of Finance, the sections dealing with agriculture in the detailed document on the Second Programme for Economic Expansion which is to be published very soon. In preparing the programme, we sought, and have taken account of, the views of the principal agricultural and rural organisations. We have had detailed and useful talks during the past few months with the National Farmers Association on the general position of, and the prospects for, agriculture; it has been arranged that such general reviews will take place annually. In preparing our future programme, we also took account of the reports of the survey teams on the agricultural industries and the Report by Dr. Knapp on agricultural co-operation in this country. The forthcoming publication on the programme will deal with all the important aspects of future agricultural policy, as well as with policy for other sectors of the economy. My Department is also preparing a separate publication which will spell out our agricultural development programme in much more detail. It is hoped to have both these documents ready for publication about the same time.
The Small Farm Committee's report on Pilot Area Development in the west of Ireland has recently been published. The report has been accepted in principle by the Government, and arrangements are being made for the selection and establishment of pilot areas in each of the twelve counties concerned. I would appeal to all voluntary rural organisations for their help in ensuring the success of this experiment.
During the past year, circumstances have developed favourably for the cattle industry and the export trade is buoyant. There has in fact for some time been a shortage of beef in Europe, due both to increased demand and to reduced supplies in certain European and overseas countries. Some of the factors which led to decreased supplies may be of a temporary nature, but the general market outlook remains good.
Exports of store cattle to Britain have increased very substantially, although partly at the expense of a decrease in fat cattle exports. Exports of carcase beef in 1963 and the early part of 1964 have been well maintained. With the increase in demand, cattle prices have, of course, substantially increased also.
Before the present European shortage of beef supplies made itself felt, and as a consequence of the heavy supplies marketed in the early part of 1963, the British authorities initiated discussions with the governments of the major supplying countries of beef, mutton and lamb to Britain, with a view to reaching a multilateral understanding for regulating supplies to the market in the interests of stability in the trade. The negotiations did not, however, lead to agreement, but, at the request of the British authorities, the various countries concerned, including this country, are participating in the work of a meat study group established to keep the market situation under review with reference to future estimated levels of production and supply.
Cattle numbers in this country, including breeding stock and cattle in the younger age groups, have been increasing in recent years, and this, together with the steps being taken under the Second Programme for Economic Expansion for substantially increasing our cattle numbers still further, should enable us to look forward with confidence to maintaining high levels of exports and benefiting considerably from the expected continued expansion in the demand for beef. In particular, the Calved Heifer Subsidy Scheme and the increased price for milk should be powerful influences in raising our cattle output.
The total of inseminations from the cattle breeding stations increased from about 600,000 to 700,000, that is, more than 50 per cent of the cow population, from 1962 to 1963. The main trend is towards Friesian and beef breed inseminations. The progeny testing and performance testing of bulls is being developed as rapidly as possible. Trials have begun with the progeny of the Charolais cattle imported last year from the United States. Towards the end of this year, we hope to import some Charolais cattle from France and Friesians from Holland through the Spike Island Quarantine Station.
Our production of sheep and lambs is likewise expanding and we expect this trend to continue. Here again we hope for a substantial expansion in production and exports under the Second Programme for Economic Expansion.
The provision of £6,111,000 for the support of the creamery milk price and subsidisation of exports of dairy products was based on an estimated milk supply of 350 million gallons and continuance of the creamery milk price allowance at last year's level of 2d per gallon. The allowance has now been increased to 4d per gallon as from 1st May, 1964, and this will involve a Supplementary Estimate of about £2.6 million for the current year. On this basis, the income to farmers from milk supplied to creameries should be close to £33 million compared with an estimated £29 million in 1963, £23.15 million in 1960, £18.26 million in 1955, and £14 million in 1950. These increases in farmers' income from milk are very significant and are an encouragement towards increased milk production. For each of the past three years, the figure of milk intake at creameries has been a record. The estimate of 350 million gallons for the current year represents an increase of 13 million gallons over the last year's figure, but more recent trends indicate that the current year's milk intake could be even greater still. Nevertheless, we hope to be able to dispose of all the surplus milk available this year on the export market in one form or another. Despite some recent improvement in world markets for dairy products, it must be borne in mind that export subsidies—some of them substantial—are still required for practically all dairy products, and it would be idle to pretend that selling such products in export markets in the next few years is going to be easy or inexpensive to the Exchequer. The spread of the creamery system in the west and the midlands is continuing. I have encouraged this development in consultation with the IAOS, and I believe that it will confer great benefits on the small farmers in these areas.
Looking ahead to 1970, if the targets being set in the Second Programme for Economic Expansion are to be achieved—and there is no reason why they should not be achieved — there should be a big expansion in milk production. Plans are being devised to deal with the extra milk, and it is fully realised that it is most important to ensure that the development proceeds on the basis of sound and well-thoughtout national policy and that the whole position must be kept under continuous review. It is essential that there should be a sound and coordinated policy in regard to the organisation, distribution and use of creamery milk supplies and that undesirable competition for milk between cooperative creameries should be avoided.
On the marketing side, up to recently the only product exported by An Bord Bainne was creamery butter, although the Board, of course, has powers to subsidise the export of other dairy products. As from 1st March last, I assigned to the Board export marketing functions in relation to all other dairy products, and through the system of export licensing I am ensuring that the Board is the sole exporter of these products, with certain exceptions. These exceptions are the export of chocolate crumb to Britain and Northern Ireland, the export of milk powder intended for the manufacture of baby food and certain exports of cheese and milk powder by the manufacturers to their own sales organisations abroad. The assignment of these additional functions to the Board will enable it to improve export marketing and, in a fuller sense than heretofore, guide production of dairy products into the most desirable channels.
With the object of promoting increased consumption of milk and dairy products in this country, I have arranged for the establishment of a National Dairy Publicity Council. The Council comprises representatives of the Dublin District Milk Board, the Cork District Milk Board, An Bord Bainne and the Department of Agriculture. The Council intends to concentrate at the outset on publicity to increase the domestic consumption of cheese which at present is low. Fifty per cent of the Council's expenditure will be met by the Exchequer and for this purpose provision has been made in the Estimate for £15,000 for 1964-65.
Judging by the rate of applications for grants under the heifer subsidy scheme, payments for this year may relate to as many as 75,000 animals, representing a total expenditure for the year of £1,125,000. A Supplementary Estimate to cover the increased expenditure will be necessary in due course. The consumption of fertilisers continues to grow. The use of all kinds of fertilisers has risen sharply since 1957-58—nitrogen and phosphates by 80 per cent and potash by 70 per cent. The demand for ground limestone continues at a satisfactory level. Total deliveries during the year 1963-64 are expected to be about 1,100,000 tons, compared with just over 1,000,000 tons in the previous year. The full cost of transport of lime from the production plant to the farmer's premises is met from subsidy.
During the past year, the bacon export market was firmer than it had been in the preceding year or two and with better prices, the cost of export support fell. Production of pigs in many European countries was considerably reduced last year following the very severe weather conditions in the early part of 1963, but pig numbers appear to be building up again in most European countries and there is every prospect of heavy supplies being marketed in the latter part of this year. Despite the recent shortage and high prices of beef in Britain and the Continent, as well as the limitation on supplies of bacon to Britain under the multilateral understanding reached last November, prices of bacon on the British market have already begun to ease appreciably.
With a view to maintaining this country's place in the bacon export market and also developing the pork export market which has been expanding in the past three or four years, it is necessary for us to increase pig production further on a sound basis. The improved prices for Grade A Special and Grade A pigs which were introduced on 1st June should encourage producers to expand their production with confidence. Centralised export marketing of bacon by the Pigs and Bacon Commission came into operation in April, 1964, and will, it is hoped, lead to greater uniformity in export standards and regularity of supply.
In the interests of fulfilling our allocation under the multilateral bacon understanding for the British market during the current year, and in view of the existing buoyancy of the home bacon market, the Commission is finding it necessary at present to curtail pork exports, and I have agreed that this is desirable until pig production increases later in the year. Unless we fulfil the British bacon allocation in an orderly way throughout the year, our future share of the market could be prejudiced, and, with every prospect of a steady increase in our pig production, such a danger must be avoided.
While considerable advances have been made in raising the quality of our pigs, there is still scope for improvement. The question in future is not so much one of raising the actual grading standards for bacon pigs as ensuring that producers will get more and more of their pigs into the top grades. On the breeding side, a lot of work is being done to give producers the best raw material on which to work. The second pig progeny testing station, at Thorndale, Dublin, has been in operation for some time now and, with the Cork station, there is already penning accommodation for a total of 400 pigs. Plans to double the capacity of the Cork station and to establish a third station at Ballyhaise are well advanced, and when the programme is completed there will be penning accomodation for a total of over 800 pigs, which is regarded as sufficient to give an adequate testing service for all requirements.
Special provision has also been made at the Thorndale progeny testing station for the performance testing of boars. Performance testing enables a large number of boars to be evaluated in a relatively short time, and it can thus be used as a preliminary screening, with the better boars being later progeny tested. The Accredited Pig Herds Scheme now includes all the main pedigree herds in the country. During the past year, 33 new herds became accredited, bringing the total number to 74 (43 Landrace and 31 Large White), which was a satisfactory position from the point of view of the availability of first-class breeding stock. The selection of boars under the Premium Boar Scheme is now in fact confined to accredited herds, and so also is the selection of gilts by the Pigs and Bacon Commission under their Sow Distribution Scheme.
There is, unfortunately, no sign of any distinct improvement in the conditions which for many years now have made it difficult to develop the eggs and poultry industries. The census returns for June, 1963, showed, for the first time for many years, a slight increase in poultry numbers under the heading "ordinary fowl". This may be taken as reflecting the development of broiler production in recent years. The output of broilers in 1963 was some 4½ million birds, i.e. approximately treble the output in 1960. All this production was sold on the home market, as the price level on the export market is unattractive. In fact, the Poultry Production Council, which reported on broiler production in February, 1962, concluded that exports could hardly be developed unless production were on a massive scale on a fully integrated basis.
Our turkey industry has also been encountering great difficulty as a result of the enormous expansion in production in Britain in recent years, organised to a very great extent in large-scale units with direct access to retail outlets. Some people, nevertheless, try to maintain that, despite this competition, it would be a relatively simple matter to restore our turkey export trade to the level of the early 1950s when we had no competition from mass production by British producers and could sell all our supplies to a central organisation in Britain at fixed prices. Indeed, I noticed that census figures show that there has been a bigger percentage drop in turkey numbers in the Six Counties between 1956 and 1963 than there has been here.
With a view to the establishment of nucleus breeding flocks of high-class poultry stock so as to be abreast of the best quality standards, special extra facilities are at present being afforded to a number of commercial interests for the importation through quarantine of poultry breeding stock, including turkeys, from the United States.
Coming to cereals, it seems unlikely that there will be any marked change in 1964 in the total area under wheat, barley and oats. The quality of wheat harvested in 1963 was quite good. Over 90 per cent of the crop was purchased from growers at millable wheat prices. The average yield per acre was, however, somewhat lower than in previous years. The prices for the 1964 crop—I refer to millable wheat— are basically the same as those for 1963. The acreage sown to wheat this year may be slightly less than last year, but, with an increased yield, the outcome may be substantially the same as last year.
The 1963 feeding barley acreage was the largest on record at 308,000 acres. As in the case of wheat, however, the average yield per acre was somewhat less than in previous years, with the result that the quantity marketed was about the same as in 1962. For the current year, the floor price has been increased from 38s. to 40s. per barrel, £20 a ton. The area sown to the crop this year may be slightly greater than last year. It is reasonable to assume that the yield per acre will be up to the level of the years prior to 1963 and, therefore, production in 1964 will probably show an increase over the 1963 level.
The guarantee to provide a market for feeding barley of the 1963 crop was implemented through An Bord Gráin. Since the beginning of the cereal year 1963-64, the grant of licences for the importation of coarse grains has been determined in consultation with the Board. To supplement maize imports, licences have also been granted for the importation of maize/milo and feed wheat. In fact, An Bord Gráin has now been authorised to arrange for the import and sale of these coarse grains, with due regard to the necessity for ensuring a market for all available supplies of home-grown feeding barley. These arrangements serve the two-fold purpose of securing a market for our home-produced grain, and keeping the cost of all grain to the feeders at the lowest possible level.
Land reclamation and improvement works are proceeding at an active pace under the Land Project. During the past year, 90,000 acres were reclaimed or improved by farmers with the aid of grants amounting to £1.6 million provided under the Project. Applications for grants, which numbered 22,800, were up by about 2,300 on the previous year's figure. The improved position regarding the backlog of uninvestigated applications to which I referred on previous occasions has, on the whole, been well maintained, and special efforts continue to be directed towards minimising the waiting period between the date on which a farmer makes his application and the date on which he gets approval for a scheme.
There has been an encouraging response to the scheme of grant-aid introduced in September, 1961, for the fencing of mountain grazings and lands in mountain areas used in connection with mountain grazings. Up to the end of March, 1964, a total of 1,265 schemes were approved for the enclosure of 53,000 acres.
Under the Fertilisers Credit Scheme operated in conjunction with the Land Project, 25,000 acres were treated with lime and fertilisers on 740 holdings in the year 1963-64. While interest in the scheme has shown some increase during the past year or two, I feel that it could profitably be used by farmers much more extensively than it has been. To encourage greater use of the scheme, especially amongst smaller farmers, I intend to have certain revisions made in the conditions at present applying to the scheme, and I hope to see it availed of on an increasing scale in the coming years.
Since the introduction of the present Farm Building Scheme, over £9 million has been paid to farmers in grants. This represents a total capital investment of about £40 million. At the beginning of this year, the various grants available under the Scheme were reviewed in the light of the production objectives set out in the Second Programme for Economic Expansion, and it was decided, as already announced, to increase the grants for cow and cattle housing and for silos and haybarns, and to provide special improved grants for milking parlours and dairies. The new grants came into effect on 10th February. Demand for the Scheme, which already was at a very high level and growing, is expected to expand at a much faster rate in response to these increased grants, and the sum of £1.5 million provided in the Estimate to meet grant expenditure this year is the highest ever.
Important developments under the Water Supplies Scheme, as already announced, were the unification, in July, 1963, under the administration of the Department of Local Government of the various schemes of private domestic water supplies grants, and the increase in December, 1963, from 50 per cent to 66? per cent of cost in the grants provided by my Department towards the provision of piped water supplies to farmyards and farms. My Department is dealing with the applications for grants for domestic water supplies which were on hands at the date of the change, and the sum of £340,000 provided under Subhead K6 is intended to meet the cost of these grants as well as the cost of the increased grants for farmyard and farm installations.
Gross expenditure on the Bovine Tuberculosis Eradication scheme to the end of March, 1964, amounted to £43,500,000, of which £32,900,000 was paid to herd-owners in respect of compensation for reactors. Net expenditure, taking into account receipts from sale of reactors, was £28,200,000. Very satisfactory progress continues to be made towards the attestation of the six southern counties. Because of the relatively high incidence of the disease in this area, four rounds of compulsory herd tests—as against three elsewhere—are considered necessary for attestation. The second round of compulsory tests was completed in Kilkenny, Tipperary and Waterford in April, 1964, and is nearing completion in the remaining three counties. It is expected that the three counties named will be attested by May, 1965, and the remaining three counties by the end of 1965. The whole country will then be attested.
Brucellosis in cattle is widely distributed in this country, with the heaviest incidence in dairying areas, and, while vaccination with Strain 19 vaccine has controlled the incidence somewhat, the disease is still a source of serious economic loss. It is also likely to be a hindrance, in future, to our exports of live cattle and beef. In addition, brucellosis constitutes a human health risk. The eradication has been undertaken in most countries on the Continent, and the task has been completed, or nearly so, in a number of these countries. Control measures have been initiated in Great Britain and Northern Ireland. The eradication of this disease is one of the Department's main proposals in the field of animal health in relation to the Second Programme for Economic Expansion.
A nation-wide survey by means of the milk ring test is being undertaken in all 26 counties this year in order to determine the incidence of brucellosis in the different parts of the country. Testing will be carried out at practically all creamery premises and milk depots. All of these premises will be visited and milk samples taken from each supplier's churns. It is hoped to finish two complete rounds of milk sampling during 1964. The necessary facilities are being provided at a number of centres for the testing of milk samples.
As a result of this survey, we will have the information we need as to the incidence of the disease in each county. This will enable a decision to be taken as to the nature of the eradication measures to be applied in each area. Where the incidence is found to be low, a policy of bloodtesting of herds and removal of reactors, with movement controls similar to those imposed under the BTE Scheme, would be indicated. In other areas, these measures would be preceded by a four- or five-year programme of heifer calf vaccination. New legislation would be necessary before eradication measures could be applied on a compulsory basis in any area. It is expected that such legislation will be introduced in the Dáil later this year.
Following the successful trials by the Department's Veterinary Research Laboratory with the new warble fly dressings, an intensive publicity campaign aimed at the early eradication of this pest was carried out last October and November. The response to the campaign was very satisfactory and indicated that, with the full co-operation of stock owners, farming organisations and other interested bodies, the warble fly could be completely eliminated in a few seasons by the use of these new dressings. Arrangements are being made for consultations with farming organisations, county committees of agriculture, etc., with a view to the carrying out of an even more intensive campaign in 1964.
There are, unfortunately, still some cases of sheep scab in this country, and it is essential that every vestige of this disease be wiped out. An intensive eradication campaign is being undertaken this year to ensure as far as possible the dipping of all sheep within the prescribed dipping period. As a necessary preliminary to this campaign, a survey of all existing sheep dipping facilities was commenced last year. Results to hand indicate the necessity for repairs to many baths, both public and private, and, in some cases, for the erection of new baths. When the survey has been completed, a scheme for the subsidisation of the erection of new baths by local authorities in areas where additional facilities are needed will be introduced.
Well over half of the sales off Irish farms must go to export markets. The scope for increased consumption at home is quite limited, and our plans for increasing production must, therefore, be geared to export. The present world market position in regard to beef suggests that we have made no mistake in making increased cattle production the kernel of our expanded output programme.
For several other products, the future will depend largely on developments in external markets. Our objectives have been set in the expectation that there will be a considerable improvement in the organisation of international markets during the remainder of this decade. At the present time there is a great deal of discussion internationally about organisation of markets. For instance, consideration is being given to the possibility of working out international stabilisation arrangements for the principal temperate agricultural commodities, that is, cereals, meat and dairy products. These studies are based on the principle of negotiating reasonable access to markets for exporting countries, a principle which, however, is being interpreted in most quarters as the sharing of markets on the basis of the present level of supplies, The British authorities have already embarked on such a policy in the case of butter, bacon and cereals. The United States has taken similar measures with regard to beef imports from Australia, New Zealand and Ireland.
In so far as these arrangements serve to maintain prices, we welcome them. However, they could also have disadvantages if they tended to freeze the existing pattern of production and trade and unduly to shelter high cost producers in importing countries. In my opinion, free trade in industrial products should be matched by fair trade in agricultural products. In our view, the fundamental feature of international commodity arrangements should be the bringing together of the level of farm support prices in exporting and importing countries and the harmonisation of agricultural policies. This seems particularly applicable between countries such as Britain and Ireland in which conditions of production are comparable and whose economies are so closely linked.
