I move:
That a sum not exceeding £49,197,000 be granted to defray the charge which will come in course of payment during the year ending on 31st March, 1969, 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.
I propose also to move after the debate on this Estimate a Supplementary Estimate for £7,626,500 which will be required in the present financial year. I will deal with the items covered by the Supplementary Estimate in the course of this speech so that the debate may cover both the Main and Supplementary Estimates.
The total net Estimate for 1968/69, including the Supplementary Estimate, amounts to £56,823,500. This figure shows an increase of £7,140,500 on the final total Estimate, including the Supplementary Estimate, for 1967/68.
The total Estimate of nearly £57 million includes £30.7 million for price support, of which milk accounts for £25.6 million. It also includes over £15 million for agricultural development grant schemes; £3 million for disease eradication; nearly £2½ million for agricultural education and advisory services and £2 million for research.
As usual, notes on the main activities of my Department were circulated to Deputies some months ago giving data likely to be of help to them in the debate on the Estimate.
Before going on to the details of the Estimate I would like to say a few words about the outturn of agriculture in 1967 and the position in 1968. The final figures for 1967 show that farmers increased their gross output by about £17 million and their net farm income by £13 million—representing an increase of 10 per cent—over 1966 to bring the income figure to its highest level ever. The principal factors contributing to the increase in output were the good demand for cattle and beef; the substantial rise in milk production, which was achieved mainly through greatly improved milk yields; and the significant increase in the area under wheat and sugar beet. Weather conditions were generally favourable; yields of most crops were very good and the general level of prices was higher than in any previous year. Agricultural exports rose in 1967 to the record figure of £144 million compared with £123 million in 1966, an increase of 17 per cent and accounted for over half of total domestic exports. All this was gratifying following a rather disappointing year for agriculture in 1966.
The indications are that 1968 will be the best year yet in Irish agriculture. Cattle, sheep and pig prices have been maintained at high levels. Milk production has again beaten all records. We have had a remarkably good grain harvest, with record yields per acre and excellent quality. The sugar beet crop is giving a very good return, both in yield and sugar content.
The high yield of wheat this year, which is much above the 1967 record of 31 cwt an acre, can only be described as phenomenal, and over 97 per cent of this bountiful crop, totalling about 386,000 tons, has been paid for at the milling price. Not only is there enough millable wheat to provide the 75 per cent of our flour requirements, which has long been the Government's declared policy, but there will be a very substantial excess of millable wheat which must be disposed of on the feed market at a considerable loss. If this position could have been foreseen—and, in fact, it was not possible to foresee it—there would have been a levy of some 10s a barrel, or 80s a ton on all millable wheat under the Agricultural Produce Cereals) Act, 1958. I shall have more to say about this later in my speech.
Farm costs have, of course, increased during 1968. Wages, rates, feed and fertiliser costs and other items have risen, but, after making full allowance for these, economic experts estimate that family farm income in 1968 should be much in excess of the record figure of 1967. It is provisionally estimated by these experts that net farm income may show an increase of about £15 million, or approximately 10 per cent over 1967. The final figure for income cannot, of course, be established until some time next year, but the trend is unmistakable.
Many loose and inaccurate comparisons are made of agricultural and other incomes. In fact, the trend in total agricultural income in 1967 and in 1968 has matched the trend in other sectors during these years, and the higher total income was shared by a lesser number of people.
It is notoriously difficult, of course, if not impossible, to establish reliable and meaningful comparisons of per caput incomes in agriculture and other sectors, and the talk we hear about various alleged per head income gaps does not take into account the difficulties in making a valid comparison and the qualifications that go with it. Agriculture is a very diversified industry within which there are wide income ranges and different levels of production, size of enterprise, efficiency and employment. Such comparisons are usually in the form of generalisations of a quite invalid nature. For example, the incomes of full-time industrial adult workers are contrasted with alleged per head incomes of those working in agriculture who include young members of farming families aged over 14 years as well as the aged and a considerable number of people who devote only part of their time to, and derive only part of their income from farming. Another very important fact that is commonly ignored is the changes made in recent years in the regulations governing Social Welfare payments to small-holders, which, in fact, now constitute a guaranteed minimum income from the State throughout the year for many thousands of persons in this category, irrespective of their actual earnings from farming.
All these facts throw a very different light on various figures which are bandied about for propaganda purposes and are obtained by manipulation of statistics to fit in with a preconceived conclusion. One thing that is certain is that it will continue to be the Government's policy to ensure that all farmers who work their land fully and efficiently will share equitably in the growing prosperity of the nation and to pay special attention to the needs and problems of small farmers.
The facts and figures I have given for 1967 and 1968 are a striking vindication of the Government's agricultural policy, and they refute the reckless and absurd assertions, made all too commonly, and for propaganda reasons, that agriculture is, somehow or other, "down and out", is a static, poverty-stricken and inefficient industry and is too great a burden on the rest of the community. In fact, with State help, agriculture has made great strides in modernising itself. Agricultural output increased by about a fifth in volume in the past decade. Considering that the agricultural sector is such a large part of our economy, this rise was a substantial one. It was a significant factor in the increase in farmers' incomes from £109.9 million in 1957 to £145.9 million in 1967 and in the increase of £61 million in agricultural exports over the same period.
This progress was achieved by an industry which is by its nature subject to special difficulties, aggravated in our case by the fact that such a large proportion of output has to be sold in export markets which, as everybody knows, are in an unsatisfactory state.
The fact that agriculture accounts for such a large proportion of our national income, exports and total labour force does not provide a complete picture of its total contribution to the national economy. We must look at agriculture's contribution to industry generally and realise how many industries are based on it. The food processing industries, for instance, which are so heavily dependent on agriculture, account for over one-third of the gross output and one-quarter of the total employment of all manufacturing industries. If we consider in addition the degree of dependence of the fertiliser industry, the agricultural machinery industry and the transport industry on agriculture we get a much better appreciation of the overall significance of agriculture in our economy. We must bear this wider context in mind when considering the high and steadily increasing amount of Government expenditure in relation to agriculture.
The figure published in the Budget tables this year was in the region of £72 million but the actual figure will be many millions in excess of this when account is taken of the extra £4.5 million to meet the rising cost of creamery milk support, as well as other provisions made in the Supplementary Estimate. I defend expenditure of this order as necessary and desirable in the national interest but there would be no point in pretending that the raising of such large sums presents no problems for the taxpayer. It is, of course, important to ensure that the money is deployed in the best interests of agriculture and the nation. In my speech on the Estimate for Agriculture in May last year I referred to the setting up of a group to examine the various forms of State expenditure on agriculture with the object of ensuring that we are getting the best value for the money spent and that, in particular, an equitable proportion goes to the smaller farmer. The report of the group engaged in this review is now almost completed and I expect it to be in my hands within a few months.
When introducing the Estimate last year, I referred to the significance for Irish agriculture of the reactivation of Ireland's application for membership of the European Economic Community and said that any prospect of participation in the Community's agricultural arrangements was to be welcomed. As Deputies know, the Council of Ministers of the European Communities has been unable to reach agreement on the opening of negotiations for membership with the four applicant countries. Various other arrangements between the member States and the applicant countries have since been proposed but as yet nobody can say what, if anything, may emerge from these. From the point of view of an early expansion in our agricultural exports to the EEC, however, I am afraid that most of these proposals give little room for optimism. Indeed, until we become members of the Community the prospects of our regaining the valuable agricultural trade which we had a few years ago with the Community are anything but bright.
Our traditional trade in cattle and beef with certain member States has been almost at a standstill during the past two years or so. The introduction in the summer of 1968 of a common guide price for beef in all six member States coupled with a new graded import levy system is likely to prove even more restrictionist than the measures previously in operation. In the case of our other main agricultural export, dairy products, we are all only too well aware of the surplus production in the Community. Not alone is there no immediate prospect of our supplying dairy produce to the Community but the disposal of EEC surpluses abroad at a fraction of the prices obtaining within the Community has been seriously depressing world markets for dairy produce and causing grave difficulties for agricultural exporting countries such as Ireland.
Until such time as Ireland and Britain are admitted to membership of the EEC, the Free Trade Area Agreement between the two countries remains the essential basis on which our mutual trade is conducted. The agreement, which gives trade between the two countries a special character, is a two-way arrangement. It provided improved access to the British market for our vitally important agricultural exports—accounting for about 60 per cent of our total exports to that area—together with links with the British guaranteed price system in the case of our store cattle, store sheep and carcase beef and lamb. For the British, the important advantage is the assurance of increasing access to the Irish market for industrial products. It is only on a fair balancing of advantages that trade between the two countries can be developed in a satisfactory and equitable manner, and in this context agriculture is obviously of vital importance to us. If for any reason our exports to the British market were to decline, it would inevitably follow that exports from Britain to this country would also fall. In fact, of course, since the coming into operation of the Free Trade Area Agreement in 1966, exports in both directions expanded, and this is a trend which we would like to see continuing. This is of importance both for ourselves and Britain, of whom we were last year the ninth most important customer in the world.
As the House is aware, the Taoiseach's recent discussions with the British Prime Minister and other Ministers dealt with the effects on our economy of the British import deposit scheme, and also covered a number of important agricultural questions arising in relation to the working of the Free Trade Area Agreement. The agricultural issues discussed included recent statements by British Ministers about the continuance from 1970 to 1972/73 of their selective agricultural expansion programme. On this, the British Government took the view that the programme is not inconsistent with their international obligations and will not frustrate the agricultural objectives of the Free Trade Area Agreement, and it was arranged that the Agriculture Ministers of both countries would maintain close contact to this end. It was also arranged that these questions and other trade and economic issues arising out of the discussions with the British Prime Minister would be further considered at the meeting of the Anglo-Irish economic committee set up under the Free Trade Area Agreement, on 9th and 10th December. This meeting is in preparation for a meeting of Irish and British Ministers, and subsequently of the Taoiseach and the British Prime Minister. In these circumstances, I do not think that it would be appropriate for me, at this stage, to speak in any greater detail about the Free Trade Area Agreement or our general trade relations with Britain, except to emphasise the importance of the full implementation of the agreement on both sides, in its spirit and in its letter. This is the most effective guarantee of continuing expansion in our mutual trade, to the advantage of both countries.
After these general remarks, I should now like to deal in detail with the various sectors of the industry, beginning with cattle.
1967 was a good year for the cattle trade. Demand was good and exports of live animals and carcase beef were at satisfactory levels. 620,000 store cattle were exported to Britain and the Six Counties and the figure would probably have been higher had it not been for the disruption of trade caused by the foot-and-mouth disease outbreaks in Britain. Exports of carcase beef to Britain set a new record at 108,000 tons and for the first time Ireland was the principal supplier of carcase beef to the British market. Our exports of boneless beef to the US were also at a record high figure of more than 34,000 tons valued at £12 million, a major contribution to our dollar earnings. All in all, exports in 1967 of cattle, beef and by-products of the beef industry were worth £90 million which represented 62 per cent of total agricultural exports and 34 per cent of total exports.
This year the cattle trade has been very buoyant and prices have been at record levels. There has been a strong demand for our store cattle from British feeders and exports of carcase beef to that market are also at a satisfactory level. The US market for boneless beef has remained steady also but exports to the US will be appreciably down this year on the high 1967 figure. The likely position in 1969 is rather uncertain. The estimated overall total of meat imports into the US is now expected to exceed for the first time the level at which import quotas would be "triggered off" under US meat import control legislation passed in 1964. In that event imports from this and other countries would be subject to specific quotas in 1969 unless an alternative system of voluntary curtailment of their exports were to be accepted by the various supplying countries. The whole matter is at present under very active examination by the US authorities: and my Department and the Irish Embassy in Washington are keeping in the closest touch with developments. Exports of cattle and carcase beef to the EEC remain at a very low level. Import levies now charged by the Community on live cattle amount to about £50 per head, on top of which there is a duty of 16 per cent. Any worthwhile export trade is ruled out by protection of this order.
The store cattle study group which was appointed to examine all aspects of the store cattle trade and to make recommendations considered desirable for the future development of the trade has submitted a very comprehensive report which I am having examined. The report will be published shortly and will, I am sure, be of great interest and assistance to all concerned with this highly important sector of our agricultural production and trade.
Arrangements for the establishment of a body to promote exports of meat and livestock are now almost completed and I hope to announce full details of the new body in the very near future.
The original provision under Subhead K.22 in respect of the export support payments on carcase beef and carcase mutton and lamb was £3.7 million and there was an offsetting appropriation-in-aid of £1.8 million representing receipts from the British Government under the Free Trade Area Agreement in respect of exports of carcase beef, mutton and lamb to Britain during the year. The net expenditure provided for was accordingly £1.9 million. Due to strong market conditions for beef in Britain, the rates for guarantee payment there, and consequently the rates of export support payable here, have so far been appreciably lower than was originally anticipated. Mainly because of this, gross expenditure is now estimated at £2.7 million and receipts from the British Government at £1.4 million, leaving net expenditure at £1.3 million or £0.6 million less than the original Estimate.
During 1967 the number of cows artificially inseminated showed a further increase to 983,000 as compared with 930,000 in the previous year. The 1966 trend to beef breed inseminations was continued with the Hereford displacing the Friesian as the most popular individual breed. The position of the other breeds was largely unchanged but it is worthy of note that interest in the Shorthorn breed was renewed somewhat, and the demand for Charolais is now growing. On the question of progeny testing, proposals to expand and improve the service on a national scale were recommended by the National Agricultural Council and were subsequently considered by the interests concerned. The programme envisaged would provide for a greater intake of young bulls for testing in the AI service each year and more intensive selection of these bulls on the basis of test results. Agreement on this programme and on the detailed methods of testing involved has now been reached with AI stations but improved arrangements for milk recording generally have not yet been worked out in detail. However, I am hopeful that this latter matter will be settled by next year. Under the existing arrangements for progeny testing, 59 of the dairy bulls in the AI service have been fully tested and found satisfactory. As Deputies are aware, the AI operating bodies decided to increase their fees this year. This was the first increase since 1952 and was attributed to higher costs of operation.
The Angus animals purchased in the United States last year completed their period of quarantine in Spike Island and services from three of the bulls imported are now available to pedigree breeders through the AI service. I gave approval for the import of a number of Charolais cattle from France this summer. The first consignment of 47 animals has already been imported. It is expected that a further consignment of 40 animals will be imported by the end of the year.
As I mentioned last year, I am particularly concerned about the problem of scrub bulls. In 1967, I arranged for an intensive comb out of such bulls following which legal proceedings were instituted in respect of 483 unlicensed bulls. A further intensive search has been undertaken this year and in the interest of our cattle industry, I will have no hesitation in prosecuting those keeping scrub bulls. I would again ask all who are genuinely interested in the welfare of the industry for their fullest co-operation in helping to deal with this problem.
As has already been announced, the Government have decided that the calved heifer scheme should be discontinued in June, 1969. The scheme has been mainly responsible for the increase of well over a quarter of a million in our cow numbers between 1963 and 1968. Very long notice has been given of the termination of the scheme so that no herd owner can claim that he has been caught unawares.
Last August, the National Agricultural Council recommended that the Government accept the case made by the ICMSA for an increase in the price to creamery milk suppliers. As was recently announced, the Government, after careful consideration of this recommendation, decided to grant, as from 1st September, 1968, an increase of 1d per gallon for the first 7,000 gallons a year delivered by each creamery milk supplier to a creamery. The cost in a full year will be nearly £1.7 million.
The total cost of creamery milk support has become a serious problem. At the same time, it is recognised that the cost of milk production, especially for the small and medium producers, has increased, and so, also, have creamery costs. While it is estimated that the total net income from creamery milk in the year 1968 will be several million pounds above the 1967 figure, the increase in costs will have a bigger impact in the coming year, especially on the small and mediumsized producers. Large and intensive producers, of course, have advantages which the other milk producers lack, and the problem was to recognise all these facts and make a fair decision. It is for all these reasons that the Government decided that the small and medium-sized producers should benefit most from the increase in price, though, of course, every creamery milk supplier will get the penny a gallon on his first 7,000 gallons, irrespective of what additional quantity of milk he may supply to the creamery.
It was announced at the same time that the Government had decided, in the context of the Third Programme, on a new incentive scheme for increasing beef production by herd owners who are not in the business of commercial milk production. The reasons are pretty obvious: (1) the increasing difficulty of finding even reasonably satisfactory export outlets for rising milk production; (2) the fact that, so far as can be foreseen, beef has a better export prospect than milk products, and (3) the fact that herd owners not in the business of commercial milk production have not received from the State financial incentives comparable to those provided for milk. The new scheme will provide for an annual grant of £8 for each calved cow in excess of two in herds not in commercial milk production. Full details will, of course, be announced in due course.
I think it was right to combine these two measures. On the one hand, it was considered equitable to give further assistance to the milk producers, but especially to the small and medium-sized producer. Secondly, it was necessary to provide some reasonable counter-attraction to milk. The solution chosen by the Government will be an advantage both to the milk producer and the beef producer and will penalise nobody. As I have already stated, the milk price increase will cost nearly £1.7 million a year. The beef incentive scheme will cost about £2½ million annually.
The cost of creamery milk price support is provided for under Subhead N.1. In the original Estimate, a total of £21 million is provided and in the supplementary Estimate I am seeking a further £4.65 million for that purpose, including the cost in 1968-69 of the increase in the milk price allowance from 1st September. The total amount of £19.2 million made available for creamery milk support in 1967-68 was the greatest ever provided; it was six times the provision made five years earlier. The total which I am now seeking is £25.6 million, which is £6.4 million greater than last year's figure and represents not far short of 50 per cent of the total sum being provided for all the services of my Department in relation to agriculture.
About £18.7 million of the total provision represents the allowances paid direct to creameries. These are the milk price allowance of 7d a gallon paid on all creamery milk, the special quality allowance of 2d a gallon payable on creamery milk that passes a quality test, and the further allowance of 1d a gallon now being paid on the first 7,000 gallons a year from each supplier. The remaining £6.9 million represents the Exchequer's two-thirds share of the losses incurred by An Bord Bainne in connection with exports of dairy products. The current rate of Exchequer support for milk works out at an average of just under 1s per gallon. This compares with 10d last year, and about 2¼d in 1962. In the light of these figures, it cannot be maintained that the Government are unmindful of the dairying industry or of its importance to the national economy.
The increased amount required for the milk price allowance and quality allowance directly reflects the very considerable increase in deliveries to creameries this year. Deliveries in 1967 had set a record at 473 million gallons, but this year they are expected to set a new record at about 520 million gallons. All of this quantity used for manufacturing purposes will attract the milk price allowance and about two-thirds of it will also qualify for the quality allowance. I am sure that, with the incentive of 2d per gallon bonus, more and more of the milk will reach the necessary qualifying standard for this allowance in the future.
The upward trend in milk production here has coincided with an expansion of production in many other countries also, and with a considerable weakening of world markets for dairy products. Large surpluses have been built up in the EEC, and some of these have been offered on world markets at very low prices. It is extremely difficult for an agricultural exporting country such as Ireland to compete with wealthier and highly industrialised countries which are prepared to sell dairy products at give-away prices. In these conditions, the task of An Bord Bainne in marketing our dairy products abroad has become particularly difficult, and the low prices obtaining in foreign markets have substantially increased the board's export losses. On some markets indeed the price obtainable for milk products represents only a few pence per gallon of milk at the creameries. Because of these factors, the board's levy on deliveries of milk to creameries was increased as from July last. It is now necessary to provide for that portion of the increased losses which falls to be met by the Exchequer. Provision is, accordingly, being made in the Supplementary Estimate for an additional £2,470,000 on top of the £4,440,000 provided for in the main Estimate. This brings the total Exchequer grant to An Bord Bainne for the current year to £6,910,000, or more than double last year's provision.
Before leaving the subject of export marketing of dairy products, I should like to refer briefly to the question of exports of cheese to Britain. In August, last, the British authorities approached the various supplying countries with a view to securing a measure of voluntary restraint in regard to supplies of Cheddar and Cheddar-type cheese to the British market. Stocks of Cheddar cheese were piling up in Britain and it was feared that there was a risk of market collapse. The matter, which gives rise to considerable concern, has been the subject of discussions between the two Governments, but no final arrangements have yet been agreed. While Irish exports of cheese to Britain have increased in recent years, the increase has taken place on a planned and orderly basis. Our increased share of the British cheese market has been secured, not by price-cutting, but by supplying a top-quality product and by marketing it efficiently.
Exports by An Bord Bainne take place only against orders, and, accordingly, Ireland has not contributed to the build-up of unsold stocks in Britain. The quality of Irish cheese has been raised to a really high level, the cheese-grading scheme introduced by the Department two years ago being a major factor in this, and Irish cheese commands a premium price on the British market. In fact, it is selling well above the price obtained by New Zealand, Australia and practically all other exporting countries. I absolutely repudiate the charges made by some biased interests that Ireland is one of the countries which is threatening the stability of the British cheese market. No country has more careful and effective marketing arrangements. The truth is that the demand there for our cheese is such that we could sell more and still continue to get a premium price over most of our competitors. Any threat that exists to the British cheese market is mainly due to certain countries which are unloading cheese there on the market at very low prices.
During the past year or so, the export market for skim milk powder weakened considerably. Prices for skim powder had been very attractive for some years previously, but, with greatly increasing production in many countries, a weakening of the market was more or less inevitable. The prospects of an early improvement in the market are doubtful, and I would, therefore, urge creamery milk suppliers to use as much as possible of their skim milk for feeding livestock. Creamery societies can do much to help to distribute surplus skim to feeders needing supplies, and my Department and the local advisory staffs will be glad to assist in this.
As Deputies are aware, the question of the reorganisation of the creamery and milk processing industry has been examined during the past year by two American consultants. In their report, which was published in August, the consultants came down strongly in favour of rationalisation of the industry. The report is being examined by my Department and by the various interests concerned, and I am hopeful that, with the aid of the views of the American experts, it will now be possible to make definite progress towards achieving a fully rationalised industry capable of reaping the advantage of large scale organisation. Only in this way can we successfully meet the keenly competitive conditions obtaining in world markets, and only in this way can producers obtain the best possible return for their milk.
Sheep numbers, which had risen to a peak of over 5 million by 1965, have since declined to about 4.1 million. The reduction has occurred largely in Leinster and Munster and may have been influenced by the swing into cattle and milk in recent years. I am concerned to check this decline and am examining the position to see what further steps it may be possible to take to increase sheep output.
Exports of sheep and lambs, both live and in carcase form, were worth some £4½ million in 1967. The number of sheep and lambs slaughtered for export at meat factories during the early months of this year showed a considerable increase over the corresponding months of 1967. This is a desirable development and shows that producers are taking advantage to a greater degree of the better prices normally available in the early months of the year and of the export subsidy adjustments which encourage exports in those months. It is suggested from time to time that greater efforts should be made to promote exports of carcase lamb to Continental markets. It must be borne in mind, however, that the more important markets on the Continent for lamb operate restrictive import policies of one form or another. For example, in the case of France, the main Continental market, imports are regulated by a minimum price system which can result in imports being stopped completely at very short notice. This situation renders it impossible to maintain a continuing supply, and limits greatly the scope for promoting trade on a firm long-term basis. When, however, exports to France or other Continental markets are possible, Irish exporters are not slow to avail themselves of any opportunity arising.
The amended mountain lamb subsidy scheme which was operated in the autumn of 1967 was widely welcomed. Its success may be judged from the fact that subsidy was paid on some 350,000 lambs and, at 10/- a head, this meant a total payment of about £175,000 to mountain sheep farmers. As Deputies are aware, the rate of subsidy was increased to £1 a head this year and provision for the additional cost is included in the Supplementary Estimate. I believe that with this increased incentive, the scheme is now an attractive one for mountain farmers and that they will plan expansion of their flocks with confidence. It is a feature of the scheme, as it was last year, that lambs must be dipped to qualify for subsidy.
Pursuant to a recommendation made by the Survey Team on the Horse Breeding Industry, a national mare nominations scheme was introduced this year in replacement of the scheme formerly operated by the county committees of agriculture. Under the new scheme, a flat nomination value of £7 is prescribed irrespective of whether the sire used is an Irish draught or thoroughbred. Over 3,200 nominations have been awarded. As from 1969, premiums will be paid in certain cases where nominated mares produce live foals—£25 where both dam and sire are registered Irish draughts, and £15 in any other case.
It is the Government's aim to encourage a substantial expansion in pig output, and I am glad to say that various measures taken to this end are showing promising results.
A sum of £1.7 million is provided in the main Estimate under Subhead K.20 for pigmeat export support in the current year. In addition, the increase in prices announced in the 1968 Budget involved the provision of £425,000 for further export support. Because deliveries of pigs to bacon factories have been running at a higher rate than had been expected, and because of some periodic weakening in export market prices, it is necessary to provide a further £475,000 for pigmeat support in the current year, making a total of £2.6 million as compared with expenditure of £1.4 million in 1967-68.
The decline in deliveries of pigs to bacon factories which set in during 1966 after the record level of 1965 has been reversed this year, deliveries showing an appreciable increase on the corresponding months of 1967. Pig numbers in June, 1968, were 7 per cent higher than a year earlier. It is hoped that the rate of increase will accelerate as we move further away from the valley of the pig cycle, and this trend will be stimulated by the 1968 Budget measures to aid the pig industry, namely, the increase of 12s per cwt. deadweight in the guaranteed minimum price for the top two grades of pigs (A special and A), the upward adjustments also in the minimum prices for certain other grades, the substantially increased piggery grants, the generous grants towards the establishment of large scale pig fattening units, the special farrowed sow scheme for the western counties, and the new and improved aids for accredited herds.
I would particularly appeal to small-holders to avail themselves of the increased piggery grants and to get into pig production in a reasonably substantial way. There is not much attraction in fattening just a few pigs during the year on expensively-bought small lots of feed, but there is a lot of sense in fattening a hundred pigs, or maybe two hundred, on feed bought in economic quantities. There is even more sense in fattening such larger numbers if grain grown on the same farm is used. In areas where there are ample supplies of skim milk, pig producers have a valuable feed constituent available to them at an attractive price, and I would urge them to ensure that the supplies are fully utilised for what is by far the most remunerative purpose.
Our bacon export quota for the British market this year under the Multilateral Understanding on the Supply of Bacon to the UK Market is 28,010 tons, the same level as for 1967-68. Due to the decline in pig production, supplies of bacon to Britain last year fell short of the quota, but, with the recovery in pig production, we are in a position to supply the full quota without difficulty this year. In addition, the increased pig supplies are enabling the valuable export trade in pork to be revived.
The Multilateral Bacon Understanding, which was made early in 1964, is due for review after the initial five-year period and this review is now about to be carried out. The Understanding is generally accepted as having introduced an element of stability into the market and it has not in practice been a serious limiting factor on our bacon exports. It does not appear likely that the forthcoming review of the Understanding will lead to any major changes.
The increase in exports of bacon and pork makes the job of marketing a still more important one. The lower exports last year resulted in relatively better prices being obtained on the British market. In September/October, 1967, the price of the then lower exports of Irish bacon in Britain averaged about 25s per cwt below Danish bacon, but in September/October this year when our bacon exports were higher the Irish prices averaged about 31s per cwt. below Danish. This variation calls for special effort in the field of marketing in order to keep the export subsidy cost as low as possible. I am glad to say that our price has again improved relative to Danish during recent weeks.
Some attention has been directed recently to the smuggling of pigs across the Border from the Six Counties to factories here. Variations in prices between the Six Counties and here can lead to some traffic of this sort from time to time, either in our direction or in the opposite direction as circumstances provide an incentive. Some months ago, the Six Counties reduced from 150 to 145 lb. deadweight the weight of bacon pigs qualifying for the top price, whereas our Grade A Special and Grade A prices here are still payable for pigs weighing up to 160 lb. deadweight — this weight has applied since April, 1966, previous to which it was 168 lb. The only effective way to counter any tendency to smuggling of pigs between 145 lb. and 160 lb. from the Six Counties to factories here, where better prices are being paid for that weight of pig, would be to make a further reduction in the maximum weight of pigs qualifying for our Grade A Special and Grade A. I am awaiting the views of the Pigs and Bacon Commission on the whole matter.
Under Subhead K.19, a sum of £100,000 is being provided for payment of outstanding grants for modernisation of bacon factories. In order to help the bacon industry to prepare for the competitive conditions of the EEC, the scheme of grants for modernisation of bacon factories was introduced under the First Programme for Economic Expansion in 1960. Practically all the bacon factories utilised these grants to improve their premises and equipment, and the scheme is now in the winding-up stage. Assistance for further improvement works which bacon factories may wish to carry out will be available under the industrial grants legislation.
Under Subhead K.23 in the main Estimate, there is a provision of £100,000 in respect of grants for farrowed sows. This has been increased to £215,000. The scheme of grants was originally intended to last for one year from its inception in September, 1966, but it was extended to June, 1968. The scheme was well availed of and has been of significant help in reversing the downward trend in pig production. On the termination of the scheme at the end of June, it was replaced by the Special Farrowed Sow Scheme for Western Counties. I am confident that this new scheme will make a major contribution towards expanding pig production and helping the smaller farmers in the western areas.
Financial incentives were introduced this year for owners of herds reaching accredited status under the Accredited Pig Herd Scheme. Details of the incentives have already been announced, and I hope that they will stimulate greater interest in this valuable breeding scheme. Commercial breeders are being encouraged to obtain their breeding stock from accredited herds by the payment of a grant of £10 in respect of each approved in-pig gilt purchased from an accredited herd and payable when the gilt farrows. This step, together with the selection of premium boards from accredited herds only, as has been the case in recent years, will ensure that the genetic improvement achieved in these herds will be passed on to commercial herds.
From what I have said, it is obvious that very special efforts, and a great deal of money, are being devoted to the pig industry. I believe that this is fully justified because the industry's potential is very considerable. There are, however, no easy or facile formulas for dealing with this matter. What is needed is hard, unspectacular and unremitting effort by everyone concerned, from the production to the export marketing end.
As regards the marketing arrangements for pigs, schemes for centralised purchasing have been prepared by the Pigs and Bacon Commission and by the Irish Bacon Curers Society. The question of centralised purchasing was considered by the National Agricultural Council, who felt that it needed to be further examined. I have since arranged for officers of my Department and representatives of the Pigs and Bacon Commission and of the Irish Bacon Curers Society to examine in detail the practical and technical operational aspects of the schemes submitted by those two bodies.
It has been suggested that central purchase of pigs would transform the industry. I have, personally, quite an open mind on this question. I am open to conviction, but only to practical and convincing arguments. There is no point in suggesting that centralised purchase would have a kind of magical effect, and, in fact, there are many problems to be faced, not least the problem of how minimum prices are to be converted into fixed prices; how we are to avoid freezing the bacon industry into a rigid pattern with margins guaranteed all along the line and curers becoming commission men rather than businessmen; and what the cost of such an arrangement would be, and who would meet it. I notice, incidentally, that in the Six Counties— the only area in Europe where central purchase of pigs has operated—a committee of inquiry have been set up to review the whole position. Clearly, this is a matter which must be examined in a detached and objective manner and not in a propaganda atmosphere.
In 1967, the continuing increase in broiler production was the most notable feature of the poultry industry. About 11 million broilers were produced, representing an increase of approximately 10 per cent over the figure for 1966. Production in 1968 is expected to show a further but smaller increase. Growers here now have available to them some of the world's best strains of broiler stock which have been imported during the past few years.
Another feature of the industry has been the increase in recent years of large units for commercial egg production. As a result of a recent survey, it was ascertained that a total of approximately 1¼ million laying hens or about 25 per cent of the total are now accommodated in large units. Commercial egg production is obviously becoming less attractive to the ordinary producer.
While the present indications are that there will be an increase in the supply of turkeys, prospects for exports are not bright as the number of turkeys produced in Britain in large units has also expanded further.
Coming now to the provision in the Estimate for dealing with diseases of livestock, I should like first to mention that the increased provision for bovine tuberculosis eradication represents mainly increased costs of testing and does not imply any significant change in the incidence of the disease.
County Donegal was declared a brucellosis-free area on 1st June, 1968. Four other counties—Cavan, Leitrim, Monaghan and Sligo—are under test and, if all goes well, they, too, may be certified brucellosis-free by about the middle of 1969. It was originally intended that in the present year the scheme would have been extended further but, owing to difficulties in providing the necessary laboratory facilities for the purpose, this has not been possible. The net reduction in expenditure on the scheme is taken into account in the Supplementary Estimate.
I am concerned that, despite all the efforts of my Department over the years, outbursts of sheep scab are still occurring because of neglect on the part of a very small number of flock owners here and there to dip their sheep. Some means must be found of bringing the defaulters into line if the disease is to be finally eradicated and my Department are at present actively searching for a solution to this problem.
Liver fluke causes very heavy losses and presents a highly complex problem which cannot be dealt with by straightforward eradication measures. The expert advisory group which I set up last year has recommended, first, a short-term programme aimed at effecting an immediate reduction in fluke losses and, secondly, a long-term programme of research into the practical aspects of the disease. The short-term programme includes the provision of facilities locally for the laboratory examination of faeces samples for accurate diagnosis of the disease. Such facilities have been provided already at a number of my Department's District Veterinary Offices in the South and West and it is proposed to extend this service to a number of other centres. Farmers have been exhorted to avail themselves of these facilities.
There have been suggestions that the general dressing of all cattle under the Warble Fly Eradication Scheme has been dropped too soon and that there is still widespread warble infestation in the national cattle herd. My information is that, while there are some pockets of infestation, the level of infestation in the country as a whole is quite low and there are large areas where the pest has virtually disappeared. I am confident that the measures now in operation, whereby warble infestation is compulsorily notifiable, free dressing is available for cattle notified to my Department and penalties are prescribed for defaulters, are the most appropriate and effective in the present circumstances. In a letter to all herd owners early this year I asked them to inspect all their cattle regularly each year from February to August and to notify promptly any animal showing warbles. I now repeat that request.
Proposals put forward in the Second Programme for Economic Expansion for the extension of the Department's veterinary service included provision for the establishment of a number of regional veterinary laboratories to supplement the service being given from the Veterinary Research Laboratory at Abbotstown, the aim being to provide an improved diagnostic, investigational and advisory service for the whole country. The siting of the laboratories was decided on the basis that they should be located in areas with a high density of livestock and in centres with good communications to facilitate the rapid transmission of perishable specimens submitted for examination. The first regional veterinary laboratory is already in operation at Sligo. Construction of the laboratories at Cork and Limerick should be completed early in the new year and that at Athlone in the spring. Arrangements for the construction at Kilkenny of the fifth laboratory are in hands.
At the time the Estimate was being prepared, outbreaks of foot and mouth disease were still occurring in Britain and it was in consequence not possible to forecast when all the special precautionary measures that had been taken here at the height of the emergency to prevent the disease getting into this country could with safety be removed or what would be the cost to the Exchequer of implementing these measures in the present financial year. Accordingly the amount included in the Estimate in respect of such expenditure was merely a token one. As the House is aware, the epidemic in Britain was finally stamped out in June last and as a result all the emergency controls and restrictions we had introduced have now been withdrawn. A fairly considerable amount of expenditure was of course necessarily incurred since April last in connection with these controls and restrictions. The Supplementary Estimate provides for an extra £106,000.
I might mention that the total expenditure by my Department on the special precautions since October last year, when the epidemic started in Britain, is of the order of £240,000. Everybody will agree that this is a comparatively small price to pay for preserving our freedom from this dread disease which, if it had come here, would have played havoc with our livestock industry and our whole economy. At this point I would like again to pay tribute to all our people at home and abroad for their wholehearted co-operation in combating the danger with which the country was confronted.
The fact must be faced that we are exposed to a continuing risk of introduction of foot and mouth disease or other serious animal disease from external sources. My Department has in operation permanent controls designed to minimise the risk, including rigorous restrictions on the import of meat and meat products which can be a potent means of transmitting infection. I would appeal to everyone concerned to co-operate fully with my Department in these protective measures.
As Deputies are aware, the British Government set up a committee under the chairmanship of the Duke of Northumberland to make recommendations on future policy as regards the prevention of outbreaks of this disease. A Deputy Secretary and the Director of Veterinary Services of my Department have given evidence before this committee, in the course of which they explained in detail the position of our country and the policy of the Government in this regard.
I would like to draw the attention of Deputies and farmers to the Order I made last year under the Diseases of Animals Act, 1966, about the dehorning of cattle. This Order provides that on and after 1st February 1969, horned cattle, with some exceptions, may not be sold or exported. Public notice of the intention to introduce the prohibition was given early in 1966 and since repeated, thus enabling farmers to dehorn calves which might be coming forward for sale or for export as mature animals in 1969. A similar Order has been brought into effect in the Six Counties. Horns on cattle can be a source of serious loss and sometimes danger to the farmer. Dehorned cattle can be more easily managed, fed and transported. Horn damage to meat and hides is avoided as well as injuries to cows' udders. It is thus very much in the farmer's own interest to dehorn his cattle and the best method of doing so is fully described in my Department's leaflet No. 23 which can be obtained, free of charge, on request.
Earlier in my speech, in reviewing agricultural developments in 1967 and 1968, I referred to the remarkably good yield and quality of the 1968 grain harvest. The very big intake of wheat and barley in a comparatively short period could have given rise to very serious storage and drying problems were it not for the expansion of these facilities this year and the excellent co-operation of all interests, including millers and farmers, with my Department during the harvest.
The problems which arose in 1967 in regard to intake and drying facilities were caused largely by the increased numbers of large combine harvesters and increased use of bulk transport for the grain. I had the position examined in detail in consultation with the interests involved. Arrangements were made with the Agricultural Credit Corporation for the making in 1968 of loans for the provision of storage with associated drying facilities and the Corporation's hire purchase facilities were also made available for the purchase of drying machinery. By arrangement with the Irish Flour Millers' Association, 23 additional intake points were open from the beginning of the harvest and drying and storage facilities showed a big increase on 1967.
In addition, in order to encourage growers to dry their own wheat, or to arrange to have it dried before sale, I included a provision in the annual Wheat Order this year for payment to growers for artificially dried wheat. I also provided that the bonuses of 2s 6d and 5s per barrel previously paid for undried wheat delivered in the months of December and January respectively would be paid in November and December. These provisions were made as incentives to growers to dry their own wheat, or where undried wheat could be safely held, to arrange for late delivery and thereby ease the strain on intake points at the peak of the intake period. The arrangements I have outlined would normally have provided adequate facilities for a smooth and efficient intake of the crop, notwithstanding the increase in the acreage. The record yield and exceptionally heavy intake over a very restricted period meant delay in some areas. In general, however, the harvest was completed very smoothly and efficiently.
As I mentioned earlier there will be a large quantity of surplus wheat for disposal on the feed market. This will involve a substantial charge on the Exchequer and I am providing £1 million under this heading in the Supplementary Estimate to meet the loss expected to arise in the current financial year. The balance will be provided in the Estimate for 1969/70.
The Agricultural Produce (Cereals) (Amendment) Act of 1958 provided for the imposition of a levy on wheat growers to meet the loss on disposal of any surplus of millable wheat. This Act had the full support of farmers' representatives. It is now obvious that There should have been a levy on the 1968 crop which has produced a surplus of over 75,000 tons of dried wheat. Up to now, my Department's practice was to decide in July, on the basis of the total acreage under wheat, as reported by the Central Statistics Office, and the experience of recent years in regard to yield and millable quality, and after consultation with An Bord Gráin, whether a levy would be required and, if so, how much it should be. In the years 1963 to 1967 it was decided in July of each year that no levy was required, and this decision proved to be correct in those years. In 1968, my Department and An Bord Gráin, taking into account the 17½ per cent increase in acreage and applying the record per acre yield of 1967, concluded that a levy would not be required. The assumption was a reasonable one but as we now know, the phenomenal yield and quality of the 1968 crop—which far surpassed what could have been expected in July —were such that, in fact, a levy should have been imposed to finance the disposal of the grain.
Obviously, the way the levy procedure has been operated—that is on the basis of an advance estimate of the crop—has been proved faulty this year. While we cannot expect the 1968 experience to be regularly repeated, the underlying trend is for yields to increase. In future, as recently announced, the imposition and size of the levy will be decided on the actual outturn of the crop, which is clearly the fairest approach from all points of view. To enable this to be done, it will be necessary to pay for millable and potentially millable wheat in two stages. The first payment, to be made on delivery, will represent two-thirds of the total value of each supplier's wheat, and the second payment, to be made after the harvest, will represent the balance due less any levy found to be necessary on the basis of actual total deliveries of millable and potentially millable wheat. The levy will come into operation at this stage if deliveries of millable and potentially millable wheat exceed 240,000 tons dried, which at present represents 75 per cent of the flour grist. These new arrangements constitute the most efficient and practicable method of implementing the 1958 Act.
The area under barley in 1968 was maintained at around the level of previous years. The yield was satisfactory and the crop was harvested and marketed without any serious difficulty.
There has been in some quarters the usual kind of misrepresentation about the wheat and barley prices and arrangements for 1969. In fact, the combined net effect of these—that is, the increase in the barley price and the necessary adjustments in regard to the wheat supply arrangements—will be to raise the overall value of these two crops to growers compared with what it would otherwise have been. The price for wheat remains the same. It is not a low price; actually, it is rather higher than the EEC price.
No change is being made in policy as regards the percentage of Irish wheat in the grist. This target remains at 75 per cent which, at the present level of consumption of bread and flour, now represents about 240,000 tons. On this quantity, the full price is guaranteed, and the levy arrangements sponsored in 1958 by representatives of wheat growers, and given statutory effect in an Act passed in that year, will come into operation, as they envisaged, if there should be a surplus of millable wheat over the guaranteed quantity. The levy will not be imposed unless the actual outcome of the crop is that there is a surplus. This is, surely, a better procedure than trying to estimate the yield and quality of the crop before it is harvested and either imposing a levy which may not, in fact, prove necessary, or not imposing a levy when one should, in fact, have been applied.
The only other change is that the minimum falling number for potentially millable wheat is raised from 130 to 140. Experience showed that 130 was too low a figure and that the inclusion of wheat between 130 and 140 in the potentially millable category only spoiled potentially millable wheat with a higher falling number.
There is much talk about increased costs of growing cereals but little publicity is given to the striking increase in yields per acre. The wheat yield per acre went from about 25 cwts. in 1960 to 27.8 cwts. in 1966, 31 cwts. in 1967, and around 36 cwts. in 1968. Barley yields per acre have also reached record levels in the past two years. I recognise that 1968 was a remarkable year, but, beyond any doubt, the trend in yields is steadily upwards. This, obviously, has important financial advantages for the growers at any given price level.
The position in regard to oats production and marketing has been a source of some concern to me. In his Budget Statement, the Minister for Finance indicated that, beginning with the 1968 harvest, there would be a floor price corresponding to the feeding barley price for clean oats of good feeding quality. A scheme was introduced for this purpose and applied to oats grown in the western counties. To meet the cost of disposing of oats purchased under this scheme I am providing for a sum of £150,000 in the Supplementary Estimate. Provision is also being made for a sum of £30,000 in respect of grants for the provision of drying and storage facilities for oats in the area covered by the scheme. These measures should ensure that the growers in the west whose opportunity to grow other cash crops is limited will secure reasonable prices for oats produced by them.
In addition I have arranged for the abolition of the certification fee hitherto payable under the seed oats certification scheme, and of the inspection fee payable under the field approval scheme for oats with a view to improving the general quality of the oats produced. The Department's research work in cereal seed breeding of varieties designed to suit the country's requirements has been highly successful. One of the factors resulting in the increase in wheat and barley yields has undoubtedly been the general use of the improved varieties bred by the Department.
The high level of demand for facilities under the Land Project continued during the past year. Notwithstanding the temporary restrictions on visits to farms during the foot and mouth disease crisis, 5,000 more schemes were issued in 1967/68 than in the previous year and the total value of the grants offered at £3,652,000 was £414,000 greater than in the year before and over twice the value of grants approved in 1957/58. The amount paid in the past year by way of grants to farmers was £2,450,000 or £674,000 higher than in the preceding year and the highest figure ever reached. The acreage reclaimed also showed an increase of 31 per cent over the previous year.
My Department has had the mountain fencing scheme and the mountain grazings (supplementary keep) scheme under review. As an added incentive to farmers to improve mountain-type grasslands, the grants under both the mountain fencing scheme and the mountain grazings (supplementary keep) scheme are being substantially improved. The new mountain fencing grant will be two-thirds of the estimated total cost of both labour and material subject to a maximum of 15/-per perch of fence or £12 an acre of land enclosed. Hitherto the grant was paid only on the cost of material used and the limit was 10/- a perch or £9 an acre of land enclosed. In regard to "surface treatment" of mountain grazings, the maximum grant for approved works such as surface seeding, liming and manuring under the supplementary keep scheme is being raised from £4 to £8 an acre. These increased grants should help farmers to produce more and better keep for stock in mountain areas during critical periods, as when weather is severe or during mating and lambing times.
Expenditure under the Land Project fertiliser credit scheme also rose from £353,100 in 1966/67 to £375,300 in 1967/68 to reach the highest level ever. The extra provision made in the Estimate is mainly to meet the continued upward trend in the grants to farmers under the general scheme and the improved financial assistance under the mountain grazings schemes.
The provision under Subhead K.8 includes £2.15 million for grant expenditure under the farm buildings scheme and £500,000 for the water supplies scheme. As will be seen from the Supplementary Estimate, a saving of £150,000 on this subhead is anticipated. Grants paid under the farm buildings scheme in 1967/68 amounted to nearly £1.9 million and would have been higher but for the contraction in field work consequent on the precautions taken against foot and mouth disease. For the same reason expenditure under the water supplies scheme was less last year than expected, although at £380,000 it showed an increase over 1966/67.
I have already alluded to the substantial increase in the rate of grant for farm piggeries and to the new grants towards the cost of large-scale pig fattening units. The latter grants are at the rate of one-third of the approved capital cost (excluding working capital) and are payable in respect of units capable of accommodating at least 3,000 pigs at one time. A number of applications for the new grant have already been received and are being examined.
The scheme of grants for milk coolers for creamery suppliers, which was introduced last year, is being continued and I am providing £50,000 for the purpose under Subhead K.26.
Consumption of ground limestone in the year ended 31st March, 1968, was 1.48 million tons as compared with the record usage of 1.56 million tons in the previous year. The rate of delivery this year indicates that the figure of 1½ million tons will be exceeded before 31st March next year. An additional £50,000 for the ground limestone transport subsidy is being provided this year bringing the total to £1,150,000. Because of the importance of obtaining and maintaining a satisfactory lime status in our soils it is very desirable that our annual application of ground limestone should continue to increase.
The special campaign aimed at increasing the usage of fertilisers which was launched in 1966 and in which my Department, the fertiliser industry and the advisory services participated was continued during 1967 and 1968 with very satisfactory results. Fertiliser usage for each of the years July to June, 1966-67 and 1967-68 showed a substantial increase.
The amount provided under Subhead K10 in the original Estimate for subsidy on phosphatic and potassic fertilisers is £4,600,000. Indications are that because of the magnitude of the increase in the usage of fertilisers this amount will not be sufficient and provision for an additional £1,213,000 is being made in the Supplementary Estimate.
It was originally envisaged that during the five years of operation of the scheme of grants for glasshouse nurseries which was introduced in March, 1967, a sum of £500,000 would be expended by way of grants. In fact, during the first year of operation, grants to the extent of £150,000 were paid towards the cost of erection of new glasshouses. In the present year the demand for grants has accelerated and it is now apparent that the provision of £200,000 in the original Estimate under Subhead K.25 will not suffice and a provision of a further £200,000 is included in the Supplementary Estimate.
It is encouraging to see that glasshouse owners have sufficient confidence in the future to invest their capital in new and modernised glasshouses. Those in the industry are aware that the object of the scheme is to enable them to face open competition both at home and abroad and that gradual elimination of protection in due course is envisaged. I would also mention that the high level of consumption of tomatoes on the home market this year was largely due to the exceptionally fine weather, but that there is a limit to what the home market can absorb. Growers, therefore, must turn their attention to export markets. Imports of tomatoes into the United Kingdom are substantial and I am sure that progressive growers are aware of this fact and will not be slow to test the potential of this market, bearing in mind that we are well placed especially as regards North of England markets. Our success in increasing exports depends on our ability to compete in price, quality, grading and presentation of the produce while maintaining continuity of supply.
Under the heading of grants to county committees of agriculture, Subhead F, I am making provision this year for a sum of £780,500. There has been a significant expansion in the advisory services over the past decade and the total number of advisers employed by the committees has increased in that period from 313 to 509.
The report of the two experts who made a comprehensive review of the existing advisory service has been printed and published. This report, together with comments on it which have been received from various interested parties, is at present being examined interdepartmentally. I might add that the Government have not as yet come to any final conclusions on the recommendations in the report.
Under Subhead I.5 in the original Estimate a sum of £1,486,000 is being provided towards the non-capital expenses of An Foras Talúntais. A further sum of £34,000 is being provided in the Supplementary Estimate to offset the extension of the tenth round salary increase, retrospective to 1st June, 1966, to staff of An Foras Talúntais earning over £1,200 per annum. This increase of course applied throughout the Public Service. A sum of £90,000 is being provided under Subhead I.6 to finance capital expenditure by the institute. The total State contribution towards the cost of the institute's work in the current year is thus over £1.6 million.
In Subhead D.9 there is increased provision for grants to the faculty of agriculture of University College, Dublin, and to the faculty of dairy science of University College, Cork. The former faculty will receive the usual statutory grant of £24,984 while the latter will get a statutory grant of £13,000. I am providing for payment of an additional grant of £435,000, including the extra amount in the Supplementary Estimate, to the University College, Dublin, faculty of agriculture. This is £235,000 higher than for 1967-68. This expenditure arises from the development of the faculty to meet the growing needs of higher education in agriculture.
A sum of £220,000 is provided in the Estimate by way of additional grant to the faculty of dairy science of University College, Cork. This sum, which is £83,500 higher than that voted for 1967-68, includes £150,000 for the much needed expansion of the faculty buildings, on which work has commenced.
Subhead D.10 provides financial assistance for the farm apprenticeship scheme. This scheme has an important part to play in the field of agricultural education and training. It is a comparatively new scheme but already it has made substantial progress. Earlier this year, I presented Government awards of £500 each to the first group of apprentices to qualify under the scheme. This year there will probably be a bigger number of apprentices qualifying and I have provided in the Estimate for the payment of additional awards.
The problems of small farms continue to engage the closest attention of the Government as was evident from the measures to assist agriculture which were included in this year's Budget. The additional budgetary aid which was provided for the production of pigs, sheep and oats was particularly aimed at the smaller farmers in whose economy these commodities play a major role. Another very important measure designed to benefit this section of our farmers was the small farm incentive bonus scheme which was introduced last May. I am glad to say that this scheme is going very well. Up to the end of October over 6,000 applications to participate in the scheme were received by the county committees of agriculture and about 1,500 of the applicants had embarked on farm development plans. The bulk of the applications has been coming in from the western counties and there has been a very good response, too, from the dairying areas of the south. I believe that this new scheme, coupled with the many other Government aids that are now available, has a great potential for improving the incomes of a substantial proportion of our smaller farmers.
While on the subject of small farms, I should like to refer to developments under the pilot area programme. The scale of the programme has been increased three-fold in the past year or so, and progress has been most encouraging both in the physical sense and in the degree of acceptance by the farmers concerned of the ideas underlying it. Material progress is evident in all the pilot areas in such spheres as the provision of suitable farm buildings, and many of the areas have achieved marked increases in farm output. Of even greater significance, perhaps, has been the extent to which it has been possible to establish and activate local farmer groups whose co-operation is essential in achieving the objectives of the programme.
In Subhead C.4, there is a provision of £150,000 for our 1968 contribution to the world food programme and in Subhead C.5, £40,000 is provided for a food aid contribution under the international wheat agreement. In the Supplementary Estimate, a further sum of £13,500 is provided for emergency assistance to the Middle East. This provision has been made in response to an appeal by the UN and FAO for additional assistance for refugees in that area.
I should like, in conclusion, to say a few words about the much publicised question of relations between the Government and farmers' organisations. The remarkable increases in output, exports, income and general economic wellbeing are the present realities of the agricultural situation, through what has come to be called disharmony on the agricultural front seems to attract much more public attention.
Let me repeat again that I and the Government are most anxious that there should be effective and workable arrangements for close consultation with farmers' organisations of policy matters. I have always believed, because of the diverse and often conflicting interests within agriculture, that the most effective means of communication between Government and farmers is through some kind of representative body or council. Some time ago, I invited the leaders of the two major farming organisations to meet me for a full and frank discussion without any preconditions, but, for varying reasons, neither of them wanted such a discussion. The Taoiseach also offered to see both leaders together but the leader of the NFA wanted a separate meeting and the Taoiseach has now agreed to see each man separately. As Deputies know, the talks between the two organisations aimed at defining functions and working relationships will be resumed in January. In the Government's view it is very important that these talks should lead to satisfactory undertakings between the organisations, as this is the real kernel of the problem of how the Government are to carry out effective consultations on policy matters with farmers' representatives.
Personally, I am not wedded to any particular type of representative machinery for the purpose of discussions with Government and Ministers, provided the major organisations can agree about it. If the main farmers' organisations wish to form their own council, I am quite prepared to deal with it and to give it a reasonable share of my time and that of my officials. Agriculture is confronted with many problems at the present time, and the sooner organisations get down to the serious business of examining these in consultation with the Government, the better pleased I shall be. If they can agree on some way of working together and on the machinery which should form the basis for consultations with the Government, there would be no difficulty whatever in establishing close relations with the Minister and his Department.
John Feely, the ICMSA leader, had been closely associated with the efforts to find a solution to the problem. His sad and unexpected death came as a great shock to all of us. As well as being an extremely able, dynamic and popular leader, he was a great patriot, in the true sense of the word, and the contribution he made to his country's welfare, and particularly to agriculture, was very great indeed.