Therefore, the situation is serious. If it were not serious, these people would not have resorted to the drastic action to which they have resorted. They would not be parading in Dublin.
The attitude of the Minister and the Department to the dairying industry is difficult to understand. When I refer to the dairying industry, I mean the creamery industry. This is an industry which provides a livelihood for 110,000 dairy farmers and their families and which provides employment in the creameries and processing factories for approximately 5,000 workers. In 1965, this industry contributed £18½ million worth of exports and it is a conservative estimate that the dairying industry accounts for from 60 to 65 per cent of our cattle exports. It is difficult, then, to understand the negative attitude being adopted by the Minister and by the Government towards this most important industry which is now in a very grave and serious position.
There is another problem arising from this. The Minister said that milk output was up on last year. That may be so, but my information is that in County Limerick milk production has been running for the past three or four weeks at a rate ten to 12 per cent down on last year. This creates another difficulty. The projections announced by Bord Bainne are that to meet the entire market commitments for 1966 an overall increase of 7.5 per cent in milk output will be necessary.
In the journal of An Bord Bainne, winter edition, page 3, there is an article by Mr. A. J. F. O'Reilly, General Manager, in which he states that the most fundamental responsibility of 1966 will be to ensure that the intake of milk at creameries will cover, first, the formal butter quota of 23,000 tons; secondly, existing commitments to secondary markets and the increased output of diversified products. This means that an increase of approximately seven per cent in milk production is necessary if all targets are to be reached.
On every occasion on which I have spoken in this House, I have paid tribute to the Milk Marketing Board. Bord Bainne is the one bright spot in Irish agriculture. I pay tribute to them for the tremendous market research and exploration that has been carried out. After all the effort that has been put into the development of export markets by An Bord Bainne, we are faced with the situation that we cannot possibly meet the target of a 7.5 per cent increase in milk output this year. This will give us a very bad name on the export market.
We must supply the 23,000 tons of butter to Britain. What will happen? In the same issue of Bainne, on page 5, an account is given by the Chief Marketing Officer, Mr. J.F. Kenny, of the efforts made to introduce Kerrygold butter to Jamaica, which were tremendously successful. There are other accounts of the efforts of Bord Bainne to introduce other products in other territories, for example, powdered milk in Africa and various other countries.
We cannot hope to get the 7.5 per cent increase that is needed. It is vitally important that the dairying industry should know as soon as possible what is to be done. If we supply 23,000 tons of butter to Britain, we will have to cut down our supplies of butter to other markets and we will have to cut down on cheese production, milk powder, chocolate crumb and the various other products.
In my opinion, the most serious question facing the entire dairying industry is what is going to be done and how will Bord Bainne cut down on exports of products other than butter to countries other than Britain; by what amount; and can this be done without jeopardising future exports? To meet the commitments to which Mr. O'Reilly refers, of butter, secondary products and diversified products, we will have to increase milk production by 7.5 per cent.
The situation is alarming. It is a terrible reflection on the agricultural policy of the Government that this situation was not foreseen in time, that steps were not taken to obtain the necessary milk output to meet all our market commitments. If the Minister is not prepared to take some concrete steps now and in the immediate future to enable our dairy farmers to overcome the tremendous difficulties they have had to contend with over the past 12 months, there is no doubt that, not only will we not achieve this 7.5 per cent increase in milk production but milk production for 1966 will be down on the figure for last year.
On every occasion on which the heifer subsidy scheme came up for discussion in the House, I have consistently expressed my disagreement with it. I still disagree with it. However, in my opinion, the provision made in the Estimate for the heifer subsidy this year will not be needed. From my survey of Limerick and the adjoining areas of North Cork and Tipperary. I find that due to abortions, and mortality from other diseases, most dairy herds have been reduced from last year and therefore the farmers who will qualify for the £15 heifer subsidy in 1966 will be very few. The Minister can therefore anticipate a considerable saving on the provision made for this subsidy this year. I said I did not agree with it. I am convinced it was a bad scheme, for the simple reason that it was not of very much use to the small farmer. I stated here before, and I still hold the same view, that an economic basic price for milk is the best way not merely to secure the increased output of milk which is now necessary if we are to meet all our export commitments, but also to secure an increased output of livestock.
The worst feature of the £15 heifer scheme was the fact that the quality of our livestock has been impaired because no standard was laid down for the type of animal that was put in calf and for which the £15 bounty was claimed. If the incentive had been given by way of an increase in the price of milk, every dairy farmer would have ensured that the right animal was selected and put in calf, an animal that would produce milk and produce a good calf as well. With the introduction of the £15 heifer scheme, many people who had never been in dairying suddenly became dairy farmers overnight. They became dairy farmers for the sole purpose of claiming the £15.
I suggest to the Minister that he should now scrap the scheme altogether and provide the proper and only incentive. I agree with my colleague, Deputy Meaney, who is familiar with these problems and who made a very good point last night when he said that now that the people in the non-dairying areas who are not interested in milk production have obtained the maximum amount through this £15 grant, the country will have to rely on the ordinary dairy farmers, the traditional milk producers, to produce the livestock and the milk in the future.
One argument that is always advanced in reference to increased milk production is the difficulty of disposing of our dairy products. There is no doubt whatever that there is tremendous scope on the export market for our dairy products. I have a figure here which I mentioned before on the Supplementary Estimate which shows that the 23,000 tons of butter, the figure fixed as a result of the Anglo-Irish Trade Agreement, represents only 3.6 per cent of the total British market for butter. There is plenty of scope there for improvement. Our cheese exports to Britain in 1965 represented only 3.63 per cent of the total British market for cheese. Surely there is scope for improvement there? If this Anglo-Irish Trade Agreement is all we are led to believe it is, there is considerable scope for improvement.
The records of An Bord Bainne tell the same story not merely in Britain but in many other countries. The surveys carried out by An Bord Bainne leave nobody in doubt that there is a tremendous market for dried milk, powdered milk and for instant milk powder as soon as we can produce it. What is necessary now is that the dairy farmer should be put in the position that he can increase his milk output and increase the production of good quality store cattle. We must largely depend on the dairy farmers in the creamery areas for this. The only incentive which means anything to a dairy farmer is an economic basic price for his milk and the sooner the Department and the Minister realise that the better.
I have spoken at length about the dairy industry but I have dealt with only one aspect of it, that is, the production aspect. Many other problems confront the dairy industry at present. As I have said, the manner in which the milk producers have been treated by the Minister and his Department is nothing short of scandalous but when I turn to another aspect of this industry, I find that the attitude of the Department and the Minister is still more difficult to understand. I come now to the second important aspect of the dairying industry, that is, the processing and manufacturing of dairy products. In common with all other aspects of agriculture, the only aspect here which has shown an increase in output in the past couple of years is the increase in the output of documents and books of all descriptions. There are so many of them available now on all aspects of agriculture, and particularly on the dairying industry, that one would need to be a research scientist or a highly qualified economist to be able to wade through the mass of material and contradictory suggestions put forward by so-called experts.
This is clearly to be seen in the proposals made following the different surveys carried out into the dairy products industry. We have, first of all, the Department's report of a survey team set up by the Minister to go into the dairy products industry. This was produced in February, 1963 by three gentlemen nominated by the Minister. They examined this industry and published a report which includes the most fantastic ideas about reorganising the entire creamery industry. They wanted the wholesale closing of creameries and suggested that the entire processing be concentrated in five or six monster units situated at strategic points. There was to be bulk collection at the farmer's gateway by huge tankers and the dairy farmer was to have the most expensive refrigerator equipment to keep his milk in order.
This was the most fantastic document ever produced. It was completely out of touch with the realities of the situation. The suggestions, if implemented, would at one sweep write off the co-operative movement in the dairy areas. Fortunately, the Department did not get away with implementing these proposals because when they were studied, every organisation connected with the dairy industry disagreed with them. To be fair, and I always try to be fair, there are certain minor recommendations in this which are logical and full of common-sense, but they are only minor. I am condemning this document on the grounds of its whole approach.
I come now to a rather amusing situation. Among the organisations which commented on this report of the survey team established by the Minister was the Irish Agricultural Organisation Society, 84 Merrion Square. They published a memorandum on the report of the survey team. It is an excellent document running to 14 pages. I will not read the lot of it but I will pick out the main points. It says:
Taking into account the extent of the investigations the time was too short to enable the team to formulate proposals which could be received with confidence by all who are concerned with the Dairying Industry. This is apparent from the fact that many of the recommendations in this Report are based on insufficient and inconclusive evidence.
It goes on to say that the report
is open to the most serious objection from the point of view of its general attitude to the structure of the industry as it stands and in respect of a number of its specific recommendations. The general impression which the casual reader is likely to get from it is that the Industry is composed of far too many small units under management which might be regarded as indifferent or under the control of Committees of Management who give indifferent supervision.
The memorandum states that there is an apparently hostile attitude to the co-operative idea. The third point it makes is that the Report shows
...a complete misunderstanding of the basis and practice of co-operative undertakings. All in all the members of the Survey Team have shown a lack of appreciation and understanding of the basic principles applying to co-operative organisations and the lack of knowledge of the practical work of their Committees of Management.
Subsequent to the issue of this report, another document was produced by the Department of Agriculture entitled An Appraisement of Agricultural Co-operation in Ireland by Joseph G. Knapp, an American expert. He produced this Report in January, 1964. He states here in the foreword:
I spent the month of June in Ireland, gathering information and inspecting co-operative facilities while on leave from the Farmer Co-operative Service of the United States Department of Agriculture. Since then I have worked on this report at night and over weekends as my official duties would permit.
He must be a man of tremendous ability who can come to Ireland for one month, go back and in his spare time at night produce an appraisement of agricultural co-operation in Ireland. Though he spent only one month here, his report makes far more sense and is much more practical and realistic than the report of the experts of our own Department of Agriculture, who should be expected to know the situation and who had adequate time to examine it.
In page 69 of his Report, Dr. Knapp refers to the Report of the Dairy Products Survey Team and comments on its major recommendations. He states at page 70 that the survey team
proposes a plan of consolidation which would be more of a State effort than a group effort. It does not envisage economic studies to see how the existing co-operatives could voluntarily achieve a reasonable goal of rationalisation without a demoralisation of their existing organisations.
It is believed that an alternative programme to the one proposed by the survey team could be suggested, one that would work from the known to the unknown. This would accept the idea of consolidation as desirable and in fact no one questions this. Dr. Knapp's idea is that instead of wholesale closure of our creameries and concentration of production on five or six major units the dairy industry could be rationalised by
giving co-operative encouragement to consolidate or federate or otherwise to strengthen their existing organisations. Studies would be made for logical areas to determine what advantages could be achieved through better combinations or better organisation.
Dr. Knapp also go on to state:
The report of the survey team gives a rather misleading picture of existing co-operatives which are probably not nearly as ineffective and weak as represented. The report does not analyse the strengths and weaknesses of the industry as it exists. Rather it sweepingly assumes that a major reorganisation is necessary to change completely the character and form of existing co-operatives.
He sums it all up very well by saying that at no point did the survey team state that the farmers would be better off if the changes recommended were adopted.
I mentioned already that the IAOS produced a memorandum on the Report of the Survey Team in which they disagreed violently with most of the main recommendations of that report. But I have another document here, headed "Irish Agricultural Organisation Society—Proposals for Reorganisation in the Dairy Industry, February, 1966." This is the document that has caused all the controversy. It has been circulated to the various creamery societies. In it suggestions and plans are outlined for amalgamating the creamery societies of this country. What I cannot understand is this. A year or so prior to the production of this document, the IAOS produced the other one from which I quoted. These two documents are completely contradictory. One disagrees with amalgamation but the recent one suggests amalgamation and puts forward proposals for it. It says:
These proposals are submitted for consideration after very careful preparation. They are based on the understanding that the societies within each group will amalgamate.
This document was considered by the creamery societies in various parts of the country. It has not met with approval.
Surprise has been expressed and severe criticism levelled at the co-operative creamery society members because they did not accept this document. Of course, this document is not acceptable for the simple reason that, as Dr. Knapp pointed out regarding the area survey by the Department of Agriculture at no point have the IAOS in their recent proposals for reorganising the creamery industry stated the farmers would be better off if the changes recommended were adopted. They would not tell the farmers how much it was going to cost, beyond the statement that the farmers would be asked to subsidise this reorganisation to the tune of £3 per gallon at peak production. For a farmer who has 50 gallons per day going to the creamery at the peak period, participation in this reorganisation programme of the IAOS would cost £150.
That is all right. The farmers are no fools or, to use an expression of my respected colleague Deputy Dillon, the farmers are no daws. They want to know what they are to get in return for this. The IAOS document says it has been proved conclusively from Canada, Denmark, France and other countries that amalgamation of creamery societies is a good thing and will put more money in the pockets of dairy farmers. Instead of sending the milk down the road to the local branch creamery, the farmer will now have it collected from him and transported 15 or 20 miles to a major processing centre. He wants to know: "How much more per gallon is that going to mean for me?" If the costings are worked out, can I or anybody else go along to a creamery society and say: "Gentlemen, this is a good idea. These are the facts and figures. If you agree to this amalgamation, it will mean ¾d per gallon, 1d or 2d per gallon more for your milk"? They have not been told this at all.
I do not know what is going on between the Department of Agriculture and the IAOS. I have a sneaking suspicion that the two bodies are at loggerheads over this and that the Department of Agriculture want to implement the report of their own survey team. However, no farmer and no creamery society could agree to the implementation of the proposals suggested in February of this year by the IAOS for amalgamating the creamery industry. No farmer in his sane senses could agree to it because there is not one scrap of evidence to prove that this would benefit the dairy farmer or the creamery industry. In fact there is evidence available which shows that it could cost the farmer a considerable amount of money. I mentioned already that it is suggested in this document that it would cost him £3 per gallon.
The only costings that have been done in respect of the whole dairying industry are in relation to the transport of milk from the farmer's gateway to a central processing station, and comparisons have been made between the cost of that and the cost to the farmer of delivering the milk himself two or three miles down the road. It is conservatively estimated from those costings that the introduction of bulk haulage over long distances to central processing stations could not be done under 2d a gallon. It is well worth the farmer's while to take his milk down the road to the local separating station at 2d a gallon. The sooner the better the Minister and the Department of Agriculture, the IAOS and all other bodies realise that the Irish farmer wants facts and figures and a plain statement of what all this involves. I admit, and most people who are familiar with the problems of the creamery industry admit, that a certain amount of reorganisation is necessary and that a certain amount of amalgamation is good, but this global approach of a survey team from the Department of Agriculture and the IAOS, who seem to have been converted to the Department's idea, can achieve nothing.
This IAOS document has caused such a furore and so much controversy that I propose to say a good bit more about it. Creameries are put into 19 different groups. Let us look at some of the groupings in my own area. I find it difficult to understand what advantages will accrue. For example, there is a group which has been referred to down south as the Nenagh Group. A certain number of creameries in East Limerick and adjoining areas in Tipperary are to be grouped together and a central processing station is to be established at Nenagh.
To give the House an example of the type of irrational planning that has been going on in the creamery industry for a long time: there are two creamery societies within two or three miles of Limerick city. In Limerick city we have the Lansdowne, a large processing plant operated by the Dairy Disposal Company, commonly known in Limerick as the Condensed Milk Company. The Drombanna Co-operative Society is two miles from Limerick and the Annacotty Co-operative Society is about the same distance. Those two societies are only a short distance from the Lansdowne plant. What do we find? We find that Annacotty is being grouped with Nenagh and that Drombanna is being grouped with the Golden Vale, each of which is 25 to 30 miles away. Surely it is more economical to have the milk of these creameries processed at the nearest plant?
This document which has caused so much controversy should be forgotten. As I said, while everybody connected with the creamery industry knows and appreciates that a certain amount of reorganisation and amalgamation is necessary, it is no use putting forward any proposal unless it is supported by self-evident facts and figures which the ordinary farmer and members of creamery societies will understand.
There is one final point I should like to make. In the notes circulated by the Minister, we find that the average price paid to the producer in 1965 was 22.45d per gallon, or 1/10½d. There is a very striking figure here. The average return per milk supplier is £377. That is the average income of the creamery milk supplier. It is not necessary for me to comment on that figure. Neither do I think it necessary for me to draw the logical conclusions in support of the arguments I have put forward for an improvement in the price. Again, I want to remind the Minister that the one and only way in which the dairy farmer's income can be improved, and improved immediately, is by an increase in the basic price and I ask him to reconsider the two-tier system.
There is provision in this Estimate for the Agricultural Research Institute. I have referred to this Institute on numerous occasions. No doubt agricultural research is very necessary but I am beginning to wonder if the Irish farmer is reaping the benefit of all this research costing several million pounds. I think it is time we took stock of the work of the Agricultural Institute. No doubt they are engaging in very valuable scientific work but the real test as to whether or not this research is of any practical use is to ask oneself the simple question as to how it has benefited, is benefiting and will benefit the Irish farmer. I have devoted a good deal of time to this lately because many people have been expressing doubts about the practical results. This country, in addition to having its own research institute, is subscribing to international agricultural research bodies. Some of the work on which our Institute is engaging is a mere duplication of the work being carried out by agricultural research institutes in other countries and the results of that work, in the sphere of dairying and other aspects of agriculture, are applicable to the problems of this country. I am not convinced that the Institute is being brought inside the farmer's gate. In fact, I have found very little evidence of communication between the Agricultural Research Institute and the ordinary farmer.
One cannot examine these things without coming across a number of problems. I think it would be well for the Minister now to review the work of the Agricultural Institute since its foundation, to see what results it has produced, how it is benefiting the Irish farmer on his own farm, and to determine whether this continued substantial expenditure is or is not justified, or whether it could be spent in a better way for the benefit of the farmer. There is no proper liaison between the Agricultural Institute, the Department of Agriculture and the Faculty of Agriculture in University College. All the evidence I have leads me to believe that there is a lack of both co-operation and co-ordination between these three bodies. There is an obviously independent spirit which is not going to be of benefit to the farmer. I could say a great deal more, but I shall not do so at the moment. It would be well for these gentlemen in the three bodies I have mentioned to realise that they are expected to work in their own fields and also expected to co-operate in those fields for the benefit of the ordinary farmer.
There is very little in the Minister's speech about co-operation. The Minister dealt at some length, though, with one aspect of co-operation in relation to the dairying industry. What progress has been made in the effort to introduce the principles of co-operation to agricultural production? I am convinced, and I have stated this here on many occasions, that one of the ways in which the small farmer can be maintained on the land — indeed, one of the only hopes for the survival of the small farmer — is co-operation. It is rather strange that, despite all the research being done, very little research is being done into this important question of co-operation. It is vitally essential and vitally important that every agricultural adviser in this country should have a practical working knowledge of the principles of co-operation. I have been told by groups of farmers who have attempted to co-operate so as to produce more efficiently that one of the big barriers to this type of development is the lack of proper technical advice.