I move:—
That a supplementary sum not exceeding £2,045,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1966, for the Salaries and Expenses of the Office of the Minister for Agriculture and Fisheries, including certain Services administered by that Office, and for payment of certain Subsidies and sundry Grants-in-Aid.
The net amount of this Supplementary Estimate, added to the original Estimate for 1965-66, brings the total net expenditure from the Vote for Agriculture to £33,810,000.
In case the timing of the introduction of this Supplementary Estimate may lead to some confusion I want to emphasise that it is related entirely to the current year which ends this month and I will therefore be confining my remarks to the items for which more money is necessary in this present year.
The biggest provision in this Supplementary Estimate is for subhead K.18 —Payments to the Pigs and Bacon Commission. The amount provided in the Vote for Agriculture for bacon export support in the current financial year was £1,800,000. The additional amount now required for the support for pigmeat exports is £1,300,000 which will bring total support for pigmeat this year to £3,100,000. The cost of support for pigmeat exports has been moving upwards and this year's amount is the highest ever. The Pigs and Bacon Commission gets the moneys for pigmeat export support from two sources —from the Exchequer and from a levy collected from bacon curers on each pig slaughtered for bacon. In view of the heavy burden of support this year the levy, which had been at the level of 15/- per pig, was increased to 18/-per pig on Ist January last. In the current financial year the Commission expects to collect £1 million through this levy.
There are three reasons for the additional £1,300,000 now required. Firstly, 1965 was a record year of pig deliveries to bacon factories and exports of pigmeat; secondly, the market for Irish bacon in Britain has not been as buoyant as was hoped; and thirdly, minimum pig prices payable by bacon curers and consequently guaranteed export prices for bacon had to be increased from 1st October last to compensate for the increase in the barley price.
Pig production in the past year has been at a record level. In the calendar year 1965 almost 1,800,000 pigs were delivered to bacon factories which was more than 200,000 in excess of the number delivered in 1964. Exports of bacon to Britain are governed by the Multilateral Bacon Understanding but a substantial part of our supplies is also exported in the form of pork. In this financial year total pork exports are expected to be about 15,000 tons compared with less than 9,000 tons in the year ended 31st March, 1965.
In previous years the Pigs and Bacon Commission's receipts from levies were more than enough to meet the cost of supporting pork exports; in fact, in most years, a great part of these receipts was available for bacon export support, there by reducing the demand on the Exchequer. This year, however, the Commission's levy receipts have been insufficient to meet the cost of pork exports and the amount which I am now seeking includes £350,000 for the assistance of pork exports.
The Pigs and Bacon Commission has been very active in endeavouring to develop markets outside Britain and has been conducting a sales promotion campaign for bacon on the home market. The Commission has also been endeavouring through market promotion to raise the price of Irish bacon on the British market. With a view to improving the quality of our bacon exports, I intend in the near future to have the maximum deadweight for Grade A Special and Grade A reduced from 168 lb to 160 lb. At the same time, in view of the lower weight, there will be an adjustment in the minimum length of carcase required to qualify for the higher grades at some weights. The matter has been discussed by my Department with the Commission and with producer and curer organisations and the proposed grading modifications are acceptable all-round. The overall effect of the modifications will be that pig producers' prices will not be adversely affected.
When introducing the Estimate for Agriculture in April last, I said that a scheme for the centralised purchasing of pigs seemed desirable provided it could be kept in line with a stable price level for producers and ensure the production of high-quality pigs. During the past year an outline of a scheme was prepared by the Pigs and Bacon Commission and discussed with the Commission by officials of my Department. A revised scheme has been sent to my Department recently by the Commission. This is at present being studied in my Department but before any steps are taken to implement it there would of course have to be consultation with all concerned, and legislation would also be necessary.
A sum of £956,000 is required under subhead N—Marketing of Dairy Produce. Milk production in 1965 was an all time record. Deliveries to creameries amounted to about 392 million gallons. This was 30 million gallons or 8.3 per cent over the 1964 figure, which in turn represented an increase of 7.3 per cent over the preceding year.
Our home consumption of dairy products has always been high but, with the assistance of the National Dairy Publicity Council, we are managing to raise it still more. We must face the fact, however, that the vast bulk of future increases in creamery milk production must be exported. Almost half of the milk production in 1965 had to be exported and Bord Bainne has been actively engaged in disposing of it to the best advantage abroad. In Britain, our chief market, and elsewhere, butter prices have, however, fallen considerably since the main Estimate was prepared. They are now lower than they have been at any time since the latter half of 1962. For this reason and also because the volume of Irish butter sold has been slightly higher than anticipated, our total butter export losses during the present year will be more than has been provided for. It is now estimated that an additional £430,000 will be required to meet the Exchequer's two-thirds share of the Board's bill for losses and subsidies, bringing the total for the year to £3,610,000. We have, of course, done better than we otherwise would have through the expansion in sales of the Board's packaged butter, Kerrygold. The increase in our basic quota for the British market which has resulted from the Free Trade Area Agreement will enable the Board to plan on a more reliable basis for the disposal of the increasing quantities of milk products that will be available for export in the years ahead.
In connection with the increase in our basic quota, I should also like to point out that in 1964-65 and in 1965-66, we received substantial supplementary quota allocations which helped to offset our unsatisfactory basic quota in those years. For the 1966-67 quota year which commences on 1st April, the total of supplementary allocations made by Britain has been reduced drastically and, if we had not secured the increase in our basic quota under the Free Trade Area Agreement, our exports of butter in the coming year would have been seriously restricted.
The results to date of the Creamery Milk Quality Grading Scheme introduced last May with the object of improving the quality of our dairy products have been quite promising. It had been expected that about a third of all creamery milk would reach the required standard in the first season but I am glad to say that the actual proportion qualifying has been as much as 42.5 per cent. This is most encouraging for the first season. I congratulate the producers on their very creditable performance and I am confident that the quantity of milk qualifying for the bonus payment will continue to increase. This will result in an improvement in the quality of our milk products exported and in the returns from their sales. Such an improvement is essential if we are to keep to a minimum the unit rate of loss on our dairy produce exports and, therefore, the total amount of support on our expanding milk production.
The amount needed for the penny per gallon price bonus for quality milk is estimated at £536,000 for this year, an increase of £526,000 on the token provision already made. Adding to this the grant to An Bord Bainne and the £6,550,000 required to meet the cost of the 4d per gallon production allowance paid from the Exchequer on all milk used for processing, the total sum for milk price support this year amounts to £10,696,000 or about 6.5 pence per gallon. This compares with £8,160,000 or 5.4 pence per gallon in 1964-65 and £6,037,000 or 4.3 pence per gallon in 1963-64. There could scarcely be any better evidence than this of the Government's recognition of the importance of the dairying industry in the whole economy and of their willingness to assist the industry so far as the resources available permit.
The third largest item of the Estimate is the provision of £796,000 for the Bovine Tuberculosis Eradication Scheme (Subhead K.11). The main reason for this increase is the dramatic rise in our cattle population, mainly due to the remarkable response throughout the country to the Calved Heifer Subsidy Scheme. There are probably other reasons too. The BTE Scheme itself has given us a greatly improved level of health in our cattle. The official returns show that our cattle numbers have risen from 4,860,000 in June, 1963 to 5,360,000 in June, 1965, an increase of 500,000 in two years.
This, of course, is very gratifying but these higher numbers mean that we have had to pay more for testing by veterinary surgeons. The average cost of the test is now £6 a herd as compared with £5 a few years ago. Due also to the rapid increase in cattle numbers, the number of reactors taken up this year will be greater than we had originally anticipated. We had estimated for about 12,000 reactors and will in fact take up about 18,000 in the year. This includes a very large number taken up in the "mopping up" operations in the south before attestation. The prices which my Department has been paying for reactor cattle have also increased quite substantially this year. On the other hand, receipts from the salvage on these reactors also show an increase. These, at £843,000, will exceed the estimate by £479,000 thus reducing the net excess expenditure on Bovine Tuberculosis Eradication to £317,000.
The year has seen the full attestation of the country and our main jobs now are to locate and eliminate the few remaining foci of infection and to ensure that Bovine TB will not again be a problem in this country.
While dealing with the subject of cattle I should like to refer briefly to the effects which the results of the recent British Annual Review will have on our livestock and meat exports. The increase of 10/- per live cwt. in the guaranteed price for fat cattle and the increase of ¾d per lb deadweight in the guaranteed price for fat sheep and lambs will apply both to Irish stores fattened in Britain and to the quantities of Irish carcase beef and Irish carcase lamb on which British guarantee payments will be made under the terms of the Free Trade Area Agreement. The value to this country of these price increases is quite significant. The increase on cattle is equivalent to about £5 per beast and on the 638,000 stores we have undertaken to supply to Britain this would represent over £3 million. A very substantial proportion of this sum will be reflected back in the prices paid for the stores here. The total value of the price increase on the 25,000 tons of Irish carcase beef to which the British deficiency payments will be applied is about £½ million, and this additional amount will accrue in full to this country. The amounts involved in the case of sheep are smaller but the increase of ¾d per lb in the British guaranteed price will nevertheless be useful in strengthening trade here. In addition to increasing the guaranteed price for fat cattle, the British Government have given an assurance that, provided there is no significant change in circumstances, they will not reduce that price during the period of the current National Plan, that is up to 1970. This provides a further degree of security for our cattle and beef exports and is yet another benefit for Irish farmers as a result of the arrangements made under the Free Trade Area Agreement.
Two other items in the Estimate concern animal health, £43,200 being required under Subhead K. 9 (Prevention of Diseases, etc. in Livestock) and £24,700 under Subhead L.1 (Diseases of Animals Acts). The former sum is needed for purposes of the warble fly eradication scheme; £5,200 to cover the cost of dressings and the expenses of my Department's officers operating the scheme in certain areas in County Mayo and one small area in County Donegal where local veterinary practitioners are not available; and £38,000 for insurance compensation to herd owners for losses attributable to the dressings used under the scheme. This fund is being built up from the proceeds of a charge of 2d per dressing for each animal treated, which will be brought into the Vote as appropriations-in-aid and paid out of the Vote as a grant-in-aid under Subhead K.9 to a special warble fly eradication account from which compensation will be paid. Any balance remaining in this account after all valid claims have been met will be taken into consideration in assessing the rate of contribution for compensation purposes in the 1966 campaign.
Of the £24,700 needed under Subhead L.1, £21,700 is for compensation for fowl destroyed as a result of fowl pest outbreaks during 1965 and £3,000 for miscellaneous expenses including the cost of the destruction and burial of stocks, excavation of burial trenches, cleansing and disinfection of affected premises and payment of compensation in one case where infection was not confirmed—and compensation could not, therefore, be paid under the Fowl Pest Orders—but destruction of the stock was considered essential as a precautionary measure.
I feel I should say in relation to the fowl pest situation that the condition as it occurs here bears little resemblance to the classical form of the disease which involves serious loss of egg production and deaths. In fact, the only manifestation of the condition here is a positive reaction to a blood test. In agreement with the Northern Ireland authorities we will be carrying out a further survey of our supply farms this year and at the end of this survey I would hope to be in a position to declare the country free from any suspicion of fowl pest.
While on the subject of animal disease, I would again like to draw attention to the serious foot and mouth disease situation which built up on the European Continent over the past five months. Outbreaks occurred in Russia, the Netherlands, Belgium and Switzerland. There is still danger of a further spread of the disease. My Department is keenly aware of the hazards arising from this situation for our country and steps have been taken to intensify the precautionary measures against the introduction of the disease.
This country has a remarkable history of freedom from major animal disease which is of tremendous significance to our livestock export trade. It behoves us all, therefore, to strive to maintain this fortunate position and I would appeal especially to persons in the livestock trade travelling abroad and to Irish people working abroad on the land or in meat processing plants, etc., to report for disinfection to my Department's portal control staff immediately on landing in this country. The full co-operation of all concerned is vital in this regard.
A sum of £415,000 is included in the Estimate to meet the excesses on remuneration subheads due to pay increases in respect of the staff of my Department. For convenience the total estimated cost, which covers several Subheads of the Vote, is provided for under a single Subhead (A). Close on 90 per cent of this sum is required to implement awards of salary increases made under the Scheme of Conciliation and Arbitration for the Civil Service.
A sum of £136,000 is required under Subhead I.5 to meet the cost of increases in the salaries of the staff of An Foras Talúntais following the revision of the salary scales applicable to the three categories of Institute staff, namely, research, secretariat and technician. The new scales for the research and secretariat staffs were determined by the Council of the Institute in exercise of their powers under section 17 of the Agricultural (An Foras Talúntais) Act, 1958, after discussions between representatives of the Institute and officials of my Department and of the Department of Finance. In the case of the technician staff, the new scales were determined by the Labour Court. The increases are retrospective to 1st January, 1964 in the case of the research and secretariat staffs and to 1st October, 1964, in the case of the technician staff. The latter was in accordance with a Labour Court recommendation. The full amount required in the current year to meet these increases is £149,000, of which £73,000 relates to the period 1st January, 1964, to 31st March, 1965, and £76,000 to the financial year ending 31st March, 1966, but £13,000 of this amount will be met by the Institute from savings.
I propose to provide an additional sum of £58,700 for the Faculty of General Agriculture of University College, Dublin, under Subhead D.9. In the past few years, the numbers of students attending courses in that Faculty have substantially increased and greater provision has been made for specialisation of studies in response to the growing demand for the services of graduates possessing specialist knowledge and training in particular branches of agricultural science. The staff of the Faculty has had to be correspondingly enlarged, and new and additional equipment has had to be provided. The costs involved have added appreciably to the ordinary expenditure of the Faculty and, while the grants made to the Faculty out of the Vote for Agriculture have been increased from year to year, they have not kept pace with the growth of the Faculty's expenditure. In the circumstances, I consider it necessary to make this additional provision for the Faculty in the current year, in order to reduce the accumulated deficiency in its receipts and to bring its current income into line with its ordinary expenditure.
A sum of £6,000 is sought under Subhead K. 16 for purposes of a scheme of grants and guaranteed loans for co-operative packing and grading stations for fresh horticultural produce. This scheme, which was envisaged in the Second Programme for Economic Expansion, was introduced in the present financial year. A token provision only was made in this year's Vote. The scheme provides for grants of up to one-third of the approved cost of economically sound projects of this nature and for guarantee of a loan by the Agricultural Credit Corporation in a like amount. Applications made by two societies to participate in the scheme have been approved in principle and the amount of grant payable expected to be made to them in the current financial year is £6,000. The balance of grants payable would fall to be paid in the next financial year.
I am increasing by £1,000 each the grants-in-aid from my Department to the Irish Countrywomen's Association, Subhead I.3, and Macra na Feirme, Subhead I.4. In the case of the ICA, the additional £1,000, which I also propose to pay in 1966-67 and 1967-68, will enable Country Markets Ltd. an offshoot of the Association, to employ a full-time organiser to help members to develop additional co-operative markets for the sale of garden, farm and home produce, particularly in western areas. I consider this project to be a most praiseworthy one and I am satisfied that the increased provision will be very well spent. The increase in the grant to Macra na Feirme will likewise be used by this Organisation to appoint additional field organisers. Macra na Feirme has been most useful in promoting the work of my Department amongst young farmers and I am satisfied that the additional money I propose giving will, by strengthening the organisation, make it even more effective in this respect in the future.