I move:
That a sum not exceeding £65,534,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1971, for the salaries and expenses of the Office of the Minister for Agriculture and Fisheries, including certain services administered by that Office, and for payment of certain subsidies and sundry Grants-in-Aid.
The sum of £65.5 million will not in fact be enough to meet total expenditure in 1970-71. The 1970 Budget introduced increases in milk prices and pig prices and moreover improved rates of grants under various schemes, such as the beef incentive scheme, the sheep and lamb headage payments scheme, et cetera. Towards the end of this speech I shall be referring to the further measures to improve agricultural incomes which I announced yesterday. More funds will thus be required in 1970-71 as well as, of course, next year. If this Estimate is agreed to it is proposed to bring in a Supplementary Estimate to provide an additional amount of the order of £4 million over and above the amount in the main Estimate.
Deputies will note that the format of the Estimate for 1970-71 has been recast to show more clearly what the money is being spent on. The change in the format has been made with the approval of the Public Accounts Committee.
The customary notes on the main activities of my Department have been circulated to Deputies giving facts and figures which, I trust, will be of help to them in the debate.
The Estimate total of £65.5 million includes £35½ million for price support, of which milk accounts for £30½ million. It also includes £17 million for agricultural production and development aids; £3½ million for livestock improvement and disease eradication and £5 million for agricultural education, research, and advisory services.
I do not propose to deal in detail in this speech with the implications for agriculture of our membership of the European Communities since this subject, which is of such vital importance for the whole future of agriculture, was very fully discussed before the Summer Recess during the debate—still to be concluded — on the Government's White Paper. As the House knows, the initial meeting between the four applicant countries and the Communities took place in Luxembourg on 30th June, when formal statements were made on behalf of the Governments of the applicant countries, the Communities and the Commission of the Communities. The Minister for External Affairs, who was accompanied by senior officials of the four Departments mainly concerned including my Department, made the introductory statement on behalf of Ireland. There was a further Ministerial meeting in Brussels on 21st September between an Irish delegation led by the Minister for External Affairs and the Communities, which initiated the detailed negotiations for our entry. Since then there have been two further meetings at official level, on 20th October and 27th November. There will, of course, be further regular meetings in Brussels at Ministerial and official level. While we have a number of senior officials servicing the meetings in Brussels for my Department, these will be supplemented as the occasion arises by other officials and I expect that, as the negotiations proceed, most levels of my Department will at one time or another be involved. I have made arrangements for regular consultations between my Department and representatives of agricultural organisations on the agricultural aspects of the negotiations. Consultations have already taken place with a number of these organisations and it is the intention that these consultations should continue throughout the negotiations.
There is one aspect of our EEC membership application on which I feel compelled to comment here. I refer to the unbalanced and distorted arguments which are being promulgated by certain groups and personalities against membership. Well-informed and constructive criticism is a welcome and essential part of the total debate on and assessment of our future in the enlarged Community. The groups and personalities I refer to, however, appear to be neither well-informed nor constructive and, so far as agriculture is concerned, are completely out of line with the views of informed agricultural opinion in this country. They have tried to paint a grim picture of the future for our small farmers and forecast a massive reduction in farm population. There will, of course, be some movement off the land. This is happening all over the world, both inside and outside the Common Market. The movement here will not, however, be on anything like the scale forecast by these prophets of doom. Our structural problems are far less than those in most of the existing member states and indeed the average size of farm here is significantly higher than that in the present Community. Outside the enlarged EEC the plight of our small farmers would be very serious indeed, whereas inside the Community they would have the prospect of much better prices for their produce and an orderly and stable marketing system. Moreover, within the EEC, those people who would be leaving the land in any event would be assisted in doing so in a humane and comprehensive way through the Community's proposals for the structural reform of agriculture. It is highly significant that the opponents of Ireland's entry into the EEC have failed completely to put forward any kind of worthwhile or practicable alternative to EEC membership.
I would now like to say a few words on the objectives of our agricultural policy and the progress being made in achieving them. It was only natural that on my appointment as Minister responsible for agriculture I should take a close look at the overall picture as well as the individual sectors. Even as one familiar with the practical aspects of farming, I was struck by the diverse and complex nature of the industry, the difficulties inherent in its administration and the problems internal and international with which it has to cope.
The broad objectives of our agricultural policy are set out in the Third Programme. I am quite satisfied that they are soundly based. I can see no reasonable person taking issue with the aims of increasing efficiency in the production, processing and marketing of our farm products, of improving the structure of agriculture and of aiding the smaller farmer. The aim of maintaining a reasonable relationship between farm and non-farm incomes is justified on both social and economic ground's. If this relationship is to be maintained without imposing an undue burden on the Exchequer it is essential that we continue to do everything possible to secure improved access to, and better returns from, the external markets on which we depend for the disposal of a high proportion of our agricultural production.
There has been no shortage in the past of criticism of our agricultural policy and I do not expect that this position will change. All I ask is that such criticism be positive and constructive. The facts about agricultural progress speak for themselves and refute those critics who like to assert that the Government's agricultural policy is ineffective. As a result of this policy and more advanced techniques, the ability of farmers to produce efficiently has greatly increased and there can be no doubt about the potential for a big expansion in production. One of the main factors hampering the exploitation of that potential is the difficulty of obtaining adequate remunerative market outlets.
In the last three years 1967, 1968 and 1969 agricultural output, prices, income and exports all increased. The high volume of output achieved in 1968 was maintained in 1969 and with a further rise in prices the value of output rose to the record figure of £318 million, an increase of £14 million over 1968. Despite the continuing upward trend in operating expenses, total family income in 1969 was £3 million higher than in 1968 when it rose by £23 million to the record figure of £169 million. With growing modernisation, agricultural labour requirements are diminishing so that this income is being shared among fewer people. I will be speaking about the outturn in 1970 later in my speech.
There is no clearer illustration of the benefit of agriculture to the community than in the figures for agricultural exports. Over the years these have continued to climb and in 1969 reached almost £163 million, compared with £155 million in 1968. Agricultural exports in the first nine months of 1970 show an increase of 10 per cent on the corresponding period of 1969. While with expanding industrial exports the percentage of total exports represented by agriculture has been falling, agricultural exports still account for nearly half the total and their contribution to economic progress is greatly enhanced by their low import content.
In view of the serious export trading difficulties which exist and the inherent tendency for the prices of agricultural products to lag behind those of other products, substantial State support for agriculture continues to be necessary. In fact, the amount keeps on growing. The proportion represented by price support is considerable. Of course, price support does more than simply help to augment farmers' incomes. It strengthens farmers' confidence, encourages production and provides extra money for reinvestment in farms. Farmers are as much entitled to an equitable price for what they produce as anybody else, though the budgetary problems of providing such a large sum in price support are formidable.
As is well known, the barriers to agricultural trade are rooted in the measures taken by importing countries to protect their own producers. Efforts made by international bodies to improve the situation have not so far been very successful. There is a tendency for some of these bodies to deal with agricultural trade without making adequate allowance for the relative importance of agricultural exports in the economies of different countries. Agricultural exports of highly industrialised countries which can afford large scale support for their agricultural production tend to be considered on an equal footing with the agricultural exports of countries like Ireland where agriculture is far more than an adjunct to a highly industrialised economy.
After these general remarks, I shall now deal with the main sectors of agriculture, beginning with cattle.
The cattle trade continued buoyant throughout 1969 and demand this year has also been steady Our exports of store cattle to the UK in the first nine months of 1970 have been somewhat down on the same period in 1969. Export slaughterings of bullocks and heifers rose last year and this upward trend has continued this year. The British guaranteed price for cattle was increased by 7s 6d per live cwt. for 1970-71 and the Government decided to increase the level of support for our carcase beef exports to Britain by an equivalent amount, that is to say, 1½d per Ib. deadweight. More recently— from 12th October last—the British Guaranteed price was increased by 10s per live cwt. for 1970-71 which works out at an average of about 20s per live cwt. for the remainder of the year. A similar increase was sanctioned by the Government in respect of our carcase beef exports to Britain. The net effect of these two increases, after taking into account some savings resulting from good market conditions in Britain earlier this year, is to increase net estimated expenditure on support payments on beef from £1.4 to £2.6 million. Provision is being made in the Supplementary Estimate for the additional amount.
The allocation introduced by the US Government early in 1968 for imports of beef into the United States continue during 1970. Ireland's original allocation for 1970 was 29,240 tons, an increase of 1,000 tons on the allocation for 1969, and was subsequently increased by 1,205 tons to bring the total allocation to just on 30,500 tons. The beef exports to the US consist almost entirely of frozen boneless beef for manufacturing purposes, mainly cow beef.
Due mainly to the high level of the import levies the EEC market has remained virtually closed to our beef. However, in recent months, when import levies were at a reduced level, we were able to export some quantities of beef and also some live cattle to that market.
Córas Beostoic agus Feola have been engaged, since their inception early last year, in promoting the sale of Irish store cattle in Britain by staging exhibits at the principal shows there and have undertaken promotional campaigns for Irish beef in selected areas in Britain. The commission were also active in investigating the potential of other markets and in generally promoting Irish livestock and meat abroad.
During 1969 over one million cows were artificially inseminated representing about 62 per cent of the total cow population. Herefords and Friesians were the breeds in greatest demand, accounting between them for over three-quarters of all inseminations. A notable feature has been the growth in demand for Charolais from 7,400 in 1967 to 31,000 in 1969. The most recent figures available for 1970 indicate no significant changes in the total number of inseminations or in the pattern of demand for the various breeds.
The policy of trying out new breeds under Irish conditions is being continued. The South Devon and Luing breeds have been introduced from Britain while Limousin cattle imported from France are at present in quarantine on Spike Island together with a further consignment of Charolais cattle. Arrangements are currently being made for the importation for experimental purposes early next year of Friesian and Simmental cattle from Germany and Austria subject to the animal health position in each country being favourable.
Some concern has been expressed about the quality of our store cattle exports because of the decline in recent years in the numbers of Shorthorn cows. To correct this trend, I introduced in September a special scheme for Shorthorn cattle. Under this scheme, a herd book will be established confined to specially selected stock of the old Irish Shorthorn type. Grants of £10 per head will be paid for suitable progeny but provision for these payments will not arise until 1971-72. The Irish Shorthorn Breeders' Association are co-operating with my Department in the operation of this scheme.
The Third Programme provides for the establishment of a central station for the performance testing of beef bulls. I am glad to say that the initial planning work for the erection of a station on the most up-to-date lines is under way in consultation with the Office of Public Works. A suitable site has been acquired at the National Stud farm at Tully, County Kildare, and I am hopeful that it may be possible to bring the station into operation towards the end of next year. The station will have an initial throughput of 100 young bulls a year from which a pool of tested animals will be provided for the AI service and for leasing to pedigree breeders.
The beef cattle incentive scheme introduced last year is aimed at encouraging beef production by providing grants to herdowners who do not sell milk or milk products. In deciding to introduce this scheme the Government were influenced by several facts— firstly, that it was impossible to find even reasonably satisfactory export outlets for the rising milk production; secondly, that there were better export prospects for beef; and thirdly, that up to then beef producers had not received from the State financial incentives comparable to those provided for milk producers.
The grant was fixed at £12 for each qualified cow, in excess of two, accompanied by a calf. Around 34,000 herdowners received a total of over £1,800,000 in grants under the scheme in 1969-70.
The original provision of £2,400,000 for the scheme in 1970-71 was based on a £12 grant. However, following representations by farming organisations during the course of the pre-Budget talks and in view of the promising future for cattle and beef exports, the Government subsequently decided to give a substantial additional impetus to beef cattle production. The rate of grant under the scheme was increased to £21 for the first qualifying cow— that is the third cow in the herd—£19 for the second qualifying cow and £16 for each subsequent qualifying cow. These higher rates are of particular benefit to owners of the smaller herds.
As a result of the higher rates of grant there has been a considerable expansion in the number of herdowners now participating in the scheme. In the current financial year a total of £4,750,000 is likely to be paid to around 54,000 herdowners. Provision is being made in the Supplementary Estimate for a sum of £2,350,000.
Support for creamery milk is by far the most costly item in the Estimate, and accounts for a sum of £30.5 million.
The total supply of milk to creameries in 1969 amounted to over 526 million gallons. This was about six million gallons more than in 1968 and would have been higher but for the drought conditions of the autumn of 1969. It is likely that the creamery intake this year will be lower than the 1969 level.
While there have been some minor improvements recently in price on certain export markets for dairy produce, one cannot be certain that these improvements will be maintained. In general existing world market prices for dairy products are not satisfactory. While this situation obtains, substantial support for milk will continue to be necessary.
Economic pressures in the form of rising operational and marketing costs and poor returns on export markets accentuate the need for the most modem and efficient equipment and facilities throughout the milk processing industry. This leads me to the urgency with which the problem of reorganising the creamery industry must be tackled. The prospect of entry into the EEC makes it imperative that the creamery industry should be placed on the best possible economic footing so that it will be in a position to make the most of the export opportunities that will arise in the enlarged Community and retain the valuable home market. In a number of areas some progress has already been made in regard to reorganisation but a great deal more remains to be done.
I appreciate the problems that have to be faced by individual creamery societies but, if the industry is to prosper in the years ahead, these problems must be tackled and overcome. The vast majority of creamery societies should find it possible to reorganise into large-scale groups in such a way as to serve not only the interests of the individual societies but also the overriding interests of the creamery industry as a whole. In view of the continuing upward trend in costs, it is now more important than ever that the creamery itself should take all possible steps to rationalise the creamery organisation and so enable better prices to be paid to the milk producers.
While the general state of export markets for dairy products continues to remain so weak and unsatisfactory and even with the increased quota for our butter exports to Britain in 1970-71, there is a continuing need for ensuring that as much milk fat as possible is used at home. The Exchequer contribution towards the promotion of dairy products on the home market is being more than doubled this year, and this permits of a more vigorous and sustained promotion campaign than was possible with the resources previously available. In the campaign particular emphasis is being placed on the promotion of butter.
Sheep numbers have been declining but there is evidence to suggest that this period of decline is now ending as a consequence of our improved production incentives and of the satisfactory level of sheep prices.
The mountain sheep subsidy schemes were continued this year. The subsidy rate for both lambs and hogget ewes was increased from £1 to 30s and the hogget ewe scheme was extended to all areas of the country. In round figures farmers will benefit to the extent of £1,300,000 in subsidy. While a breakdown as between mountain and lowland areas is not yet available, indications are that the numbers of sheep presented in mountain areas are slightly higher than last year. It seems that the number of hoggets from lowland flocks presented this year for subsidy was of the order of 200,000. Now that farmers in the lowland areas have the support of the hogget ewe subsidy, it may be hoped that next year more hoggets will be retained for breeding in those areas.
The British guaranteed price for sheep was increased by 3d per lb carcase weight for 1970-71 and the Government decided to increase the level of support for our carcase lamb exports to Britain by a similar sum. Following the British price increases of October last the level of support was increased further by an average of 3d per lb for the remainder of the current financial year. These measures should help towards bringing about an increase in sheep production.
In passing I should like to mention that the administration of these headage grant schemes for cattle and sheep is very demanding on staff. To carry out the inspections over a reasonable period it was necessary to withdraw some staff temporarily from other work, notably the land project and farm buildings schemes. This has caused delays in making inspections and payments under these schemes and the position is not yet quite up to date. I would ask farmers, and Deputies who may be approached by them, to accept the necessity for such delays.
Regulations under the Wool Marketing Act were made earlier this year on the advice of An Chomhairle Olla. These prescribe a bonus and deduction system related to quality and faults to be applied to wool purchased from producers. The regulations also prescribe the standards for premises, plant and machinery which a buyer must meet to gain registration under the Act. The register of wool buyers will be set up prior to the 1971 season and for this purpose Department inspectors are now making regular visits to wool buyers to guide them on the standards. These measures mark the first stage in improving the efficiency and operation of the marketing arrangements for wool in this country. I should like to stress the importance I attach to the role of An Chomhairle Olla, both in their function of advising me on steps to improve the marketing situation and in pursuance of their tasks to promote wool exports and secure the maximum use of Irish wool by our manufacturers.
As regards horses, an important development was the enactment of the Horse Industry Act, 1970, which implemented the recommendations of the survey team on the horse breeding industry in relation to the establishment of a Horse Board and the licensing of riding establishments. On the subject of the Horse Board I have been in consultation with interests concerned and I hope to announce their establishment shortly.
The national mare nomination scheme continued in operation this year and was very successful. Under the scheme the value of a nomination is a flat £7 in all cases irrespective of whether the sire selected is a thoroughbred or an Irish draught. This year about 8,500 mares were presented for inspection and about 6,100 nominations were awarded; the figures for 1969 were 6,100 mares inspected and 4,300 nominations awarded. Premiums are awarded to nominated mares which produce live foals—£25 if both dam and sire are registered Irish draughts and £15 in any other case. About 2,100 foaling premiums were paid this year on the crop of foals from last year's nominations.
For pigmeat support in the current year the Estimate provision is £3.4 million. The year 1969 was a record year for deliveries of pigs to bacon factories and deliveries this year may be of much the same order and marketing prospects seem to be reasonably good.
Pig prices have been firm over the past couple of years and there has been a fair measure of stability in the industry. Early this year we increased the guaranteed minimum prices of good quality pigs by 10s per cwt. deadweight. On the marketing side, in addition to supplying bacon against our quota for the British market, we are sending fairly substantial supplies of pork regularly to Britain and getting a premium price for the product. There have also been some useful exports of pork carcases and pork cuts to a number of continental markets.
Broiler production in 1969 amounted to about 14.8 million, an increase of over 1 ½ million birds compared with 1968. With the increase in prices of red meat, some further expansion of consumer demand for broilers may be expected. There was a further increase in 1969 in the use of turkey hatchery poults, sales of which rose to 700,000. There was a continued improvement in the quality of turkeys marketed.
I now turn to measures to combat diseases of livestock. It is now estimated that a sum of £2,625,000 net will be required for the bovine tuberculosis eradication scheme this year, that is, £625,000 more than the amount provided in the main Estimate. The additional amount required is being included in the Supplementary Estimate. The net expenditure on the scheme in 1969-70 was about £2,500,000.
Last year, my Department initiated some special measures to reduce further the incidence of bovine tuberculosis. These measures have been continued and intensified this year and, as anticipated, greater numbers of reactors have been identified and removed. While it is difficult to be precise in the matter it is expected that the number of reactors this year will be about the same as last year but, in accordance with market trends, the prices will, on average, be higher. We hope that the special efforts made this year and last year will soon pay off in a substantial reduction of the disease. The original estimate for brucellosis eradication was £1,500,000 net but it is likely now that the actual net expenditure will turn out at not more than £1,250,000. The saving is being taken into account in the Supplementary Estimate.
There are now five counties in the brucellosis free area—Donegal, Sligo, Leitrim, Cavan and Monaghan. Testing, of course, continues in the area to remove any remaining pockets of the disease. During the year we have extended the eradication scheme to counties Mayo, Louth, Westmeath, Roscommon and Longford and I intend shortly to include County Meath. The operation of the scheme in these counties will be a further safeguard for the brucellosis free area and I hope that these counties will, within the next few years, also reach brucellosis-free status. The early certification of the midland area, from which most of our live cattle are exported, is most important in view of the intention to start brucellosis eradication on an area basis in Britain next year and the possible accession of this country and Britain to the European Economic Community.
Shortly, therefore, a total of 11 counties will have come under the brucellosis eradication scheme. In the remaining 15 counties, a scheme is now operating whereby herdowners who are considered to have a reasonable chance of clearing their herds of the disease can get grants for every brucellosis reactor sent for slaughter. Grants of up to £75 for pedigree animals and £25 for non-pedigree animals are payable when the herd is certified free of the disease. Herds which qualify for the grant could then be taken on to the brucellosis (certified) herds scheme. Another important scheme operating in the II main dairying counties of the south and east is the heifer vaccination scheme. I am glad that this scheme has met with a very good reception. Of course, vaccination will not cure or eradicate the disease but it will give substantial protection to many herds in the dairying area over the next few years until we can commence the eradication programme there.
It is regrettable to have to advert to a further increase in the number of outbreaks of sheep scab—86 in 1969-70 as against 65 in 1968-69. This unsatisfactory position is all the more to be deplored because the total eradication of the disease could be readily achieved if all the sheep in the country were effectively dipped over a period of two to three years. The obligation on claimants under the sheep subsidy schemes to produce dipping certificates will, I hope, bring about full compliance with the dipping requirements.
Field and laboratory trials were initiated last year under the guidance of the expert advisory group which is studying the highly complex problem of liver fluke. These trials are continuing. They consist of, firstly, field trials with a molluscicide in Counties Cavan, Louth, Meath and Monaghan, in which the county committees of agriculture, herdowners and the veterinary profession are co-operating and, secondly, a research project on the economics of liver fluke in beef cattle during their first two years of life. The Agricultural Institute and the veterinary faculties of the universities are co-operating with my Department in this project and Shell Research Ltd. are contributing towards the cost. To all these bodies I express my appreciation. Generally, the weather conditions in the past couple of years have been such that the incidence of fluke has been below normal.
Under the arrangements whereby warble infestation is a notifiable disease and notified animals are treated free of charge about 400,000 animals were treated in 1969. Provision for the treatment of a like number of animals in 1970 was included in the Estimate but in the event almost 800,000 animals were dealt with before the notification period terminated in August, involving an excess on the estimated provision of a further £33,000 which is being sought by way of the Supplementary Estimate.
In view of the rising level of warble infestation I decided in May last that a national dressing campaign would be undertaken in the autumn through the agency of the AI bodies and on the basis of the cost of treatment being met by herdowners as in the case of the previous national campaigns. Discussions were held subsequently with the different interests concerned to work out detailed arrangements and a scheme was duly formulated which the AI bodies were ready to operate from the 1st September. As in the case of previous national schemes, farmers were asked to pay a small charge per animal dressed—an amount which was negligible in relation to the advantages. I regret that in the event, however, the AI bodies found it impracticable to operate the scheme in the form visualised because of opposition by some farming organisations. The AI bodies have, however, provided a voluntary service under which about a million cattle will have been dressed before the end of the dressing season.
In view of the situation that has developed it will not be practicable to continue the spring warble dressing service which my Department has operated for the past few years and it will be necessary to amend the legislation under which the presence of warbles in cattle has been compulsorily notifiable. It seems that in future treatment of the warble fly will have to be on a voluntary basis.
A diagnostic and advisory service for controlling mastitis continues to be provided by my Department's central and regional veterinary laboratories and by certain co-operative societies and the Dublin District Milk Board.
The ban on the importation of dogs and cats from Britain which was imposed as a precaution against the introduction of rabies following cases of the disease in that country has been removed with effect from the 1st December. Dogs and cats from other countries may be imported only under licence and subject to six months post-importation quarantine and two anti-rabies vaccinations during quarantine.
Four of the five new regional laboratories to supplement the diagnostic, investigational and advisory service provided by my Department's Veterinary Research Laboratory at Abbotstown have now been completed and are fully operational. The fifth laboratory, at Kilkenny, will be completed next year.
Turning to tillage, I am glad to say that in 1970 there was an overall increase in the area under cereal crops as compared with recent years. Most of the crops were harvested satisfactorily although weather conditions deteriorated towards the end of the harvest.
The area under wheat in 1970 was 231,000 acres as compared with 204,000 in 1969. While yields were on average somewhat lower than in 1969, growers still got a satisfactory return.
The area under feeding barley continues to increase and in 1970 was 419,000 acres which is 12 per cent higher than the record figure for 1969.
The area under oats has been declining for a number of years and in 1970 there was a further decrease of some 19,000 to 171,000 acres. I am continuing the floor-price scheme for oats grown in western counties as I believe that in its absence the decline in oats would have been far greater.
My Department is continuing with its highly successful research work in cereal seed breeding thus ensuring an ample supply of cereal seeds most suited to our requirements. Our crop yields from seeds produced in the Department's cereals stations compare very favourably with those of other countries.
The year 1969-70 showed a continued increase in the high level of demand for the facilities of the land project general scheme. The amount paid out in the year by way of grants to farmers was £2.8 million and the area improved was 108,700 acres as against 97,000 acres in the previous year.
Following the improvement in November, 1969, in the rates of grants under the fencing scheme for mountain grazings and the mountain grazings (supplementary keep) scheme the number of applications received in 1969-70 showed an increase of 22 per cent over the previous year. The number of approvals issued in 1969-70 was 759, for the enclosure of 19,220 acres. The total amount being provided in 1970-71 for grants under the general scheme and the mountain grazings scheme is £2.5 million.
Under the fertiliser credit scheme, which provides long-term credit to farmers at a low interest rate, over 35,000 acres were treated with lime and fertilisers during the year 1969-70, at a cost of £255,000.
In Subhead D. 3, I am providing £2.3 million for grant expenditure under the farm buildings scheme and £500,000 for the water supplies scheme, a total of £2.8 million as compared with £2.71 million for 1969-70. These schemes are kept under review to ensure that they continue to cater for agricultural requirements and steps are being taken to rationalise and improve them this year. The changes will include a common scale of grants for housing for cows and drystock involving increased rates for the latter. There will be a revised grant system for buildings required for general or miscellaneous farming purposes such as the storage of grain, potatoes and other agricultural produce, and machinery. There will also be revised scales of grants for hay-barns, silos and concreting, and new grants for storage for flax, whey and skim milk for feeding. In the case of the water supplies scheme the maximum grant will be improved. It is hoped to announce full details of the changes in the near future.
The milk cooler grant scheme has been improved by raising the grant for ice-bank coolers from £40 to £75. The scope of the scheme has been extended by raising the maximum valuation qualification from £25 to £60 and the maximum milk gallonage qualification from 7,000 to 14,000 gallons per year. In addition to the original Estimate provision of £10,000 for the scheme, a further £10,000 was provided for in the Budget for these improvements. Since the changes were introduced in May, however, the demand for these grants has increased beyond expectations and it is now estimated that a total of £33,000 will be required this year. This involves a supplementary provision of £23,000.
Ground limestone consumption for the year ended 31st March, 1970, was in the region of 1.7 million tons, the highest on record. This is a welcome improvement on the position in recent years, when the annual consumption remained around 1.5 million tons. The total amount being provided for the ground limestone transport subsidy in 1970-71 is £1,150,000.
Consumption of nitrogen, phosphorus and potassium over the four fertiliser years 1966-67 to 1969-70 increased by 124 per cent and 68 per cent respectively. The total amount being provided for subsidy on phosphatic and potassic fertilisers is £5,720,000.
There is a provision of £400,000 in the Estimate for grants for glasshouse nurseries. This is sufficient, at the rate of grant—33 ? per cent—and at the present level of costs and prices, to provide for the construction of about 50 acres of fully-equipped modern heated glasshouses, with a production potential in excess of £500,000 per annum.
The number of applications for grants continues to run at an exceptionally high level. It was originally envisaged that during the five years of operation of the scheme, which was introduced in March, 1967, a sum of £500,000 would be expended by way of grants. In fact, grants totalling slightly over £1 million have been paid in the first three years of the scheme. It has become necessary, as already announced, to restrict the grant available to any one applicant to £25,000 and to draw up a system of priorities as between applicants. I regard this as the most equitable way of allocating the available grant funds among applicants with a background in the industry, while at the same time securing the best possible return on the State's investment.
In view of the growing importance of our export trade in tomatoes, which has increased in value from £187,000 in 1967 to an estimated £600,000 in 1970, I made an order, the effect of which was to require that any tomatoes exported on and from 15th June, 1970, be graded and labelled in accordance with internationally accepted standards. The introduction of special legislation which would cover the grading of such agricultural, horticultural and fishery products as may be desirable, whether for export or for the home market, is in hands.
The prospects of expanding horticultural exports and the question of how best to develop exports to the United Kingdom have been examined by an independent horticultural economist and a summary of his findings has been conveyed to the trade.
As in the case of many other bodies, expenditure by committees of agriculture has increased in recent years. In 1958-59, total expenditure by committees was £600,000 but is now in the region of £1,800,000. This increase is attributable mainly to an increase in the number and cost of the advisory staffs employed by the committees. Between 1958-59 and 1968-69, the total number of advisers increased from 328 to 509. During the past year an additional 60 advisers were employed by committees. This increase in staff has arisen from farmer demands for better educational and other services operated by committees and is a highly desirable development. As one who has served on a committee of agriculture, I am well aware of the increasing reliance of farmers on their instructors for good and impartial advice.
The basic organisational structure of the advisory services operated by committees has remained the same for very many years. While the structure served as well in the past it has been evident for some time that it no longer meets modern requirements. Deputies will be aware of the suggestions made regarding the restructuring of the service in both the Jones/Davies Report of 1967 and the more recent Devlin Report.
I am at present considering the recommendations made in these reports and elsewhere and, of course, in-end to have consultations with the parties concerned. From such discussions as have already taken place and he submissions made to my Department, it is evident that there is a high degree of agreement on giving the service a unified national structure, and that any new structure should be such as to provide reasonable opportunities of advancement of staff to senior positions. Whatever form of unified national structure may be finally decided upon, it is apparent that advisers should be associated with the fundamental changes that are occurring in agriculture whether these be scientific, economic or social and, moreover, that there should be arrangements for full consultation with farmers. Also, in order that the advisory service be fully aware of the latest developments in research, there will need to be a suitable working arrangement with An Foras Talúntais and other research bodies.
In the meantime the service is being called upon to expand, particularly its educational activities. The Estimate contains a provision of £100,000 for grants to county committees of agriculture towards the cost of farm training centres. It is gratifying to see a demand arising for courses not only in agriculture, but in horticulture, farm home management and poultry-keeping as well.
Under subhead B.5 a sum of £1,950,000 was originally provided towards the non-capital expenses of An Foras Talúntais but an additional £265,000 will now be required to meet the cost of applying national salary and wage awards to the institute staffs. A sum of £80,000 is being provided under subhead B.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 almost £2.3 million. This sum brings to £14 million the total amount of State grants made to the institute since its foundation in 1958.
I should now like to say a few words about the Government's policy in relation to small farms and small farm areas. Among the various measures in operation to help small farmers an important one is the small farm incentive bonus scheme. This scheme aims at helping those many smaller farmers in the potentially viable category to get across the threshold of viability. The scheme continues to make steady progress. More than 7,000 farmers are now working on farm development plans under the scheme. Over half of these have already been paid the first instalment of £50 of the bonus grant and a number have completed the second stage of their farm development plan thereby qualifying for the second instalment of £75. The advisory officers, who have done excellent work in operating the scheme on behalf of the Department, regard it as a very important feature of agricultural advisory work, particularly in the 12 western counties which account for two-thirds of the participants. The scheme is two years in operation and it is intended now to review its working in the light of experience during that period to see whether any changes may be desirable.
Another measure designed to benefit this section of our farmers is the pilot area development programme. The scale of the programme was increased three-fold since its initiation five years ago and considerable progress has been made under it.
Experience in the pilot areas has shown that smaller farmers can achieve considerable expansion in a relatively short time. This has proved to be the case when they work closely with their agricultural adviser and when they avail of the aids and incentives open to them, many of which are differentiated in favour of the smaller farmer. The value of a close relationship between the small farmer and his agricultural adviser has been clearly demonstrated. This has helped farmers greatly in their efforts to intensify production through the adoption of modern planning and management practices. In view of the importance of the advisory service in helping farmers in small farm areas to improve their position, the intensification of the service in these areas has been a primary aim of agricultural policy in recent years; the service has in fact already been considerably strengthened in most of these areas.
A full appraisal of the pilot area development programme has recently been carried out and a report thereon has been prepared. This report, in addition to showing what the programme has achieved in the physical improvement of farms, highlights the lessons to be learned from its operation and will help to guide the direction of future developments.
Even with the wide range of agricultural measures which operate to help the smaller farmers, it must be accepted that there will be a proportion of farms which cannot be brought up to a viable level. As the Third Programme emphasises the approach to the problem of small farms cannot be based on agricultural measures alone. A comprehensive programme of development of all sectors is necessary to preserve a reasonable balance of population and activity in the various regions. This increases the opportunities for supplementary earnings by small farmers who cannot achieve a reasonable income from farming alone. This policy has the merit of assisting those who wish to continue farming in a part-time capacity as well as those leaving farming to take up outside employment. I believe that our policy is consistent with the thinking on this question in the EEC as it has so far evolved.
Subhead A.5 includes a provision to cover the expenses of participation in the work of the Codex Alimentarius Commission including the operation of the National Codex Committee which was set up in December, 1969, to advise the Government on the acceptability of international food standards formulated by the commission. This commission are an international body operated under the joint auspices of the World Health Organisation and the Food and Agriculture Organisation of the United Nations and are engaged on the formulation of standards for foods moving in international trade. They have the dual purpose of safeguarding health and facilitating trade in the commodities concerned. The implications of the acceptance of international standards are of considerable importance to us not only from the health point of view but also from the point of view of our trade and the Government will need the advice of this expert committee on the many complex questions involved.
Looking at the overall position in 1970, it is very satisfactory to see that cattle numbers showed a further increase. In June last, they were 154,000 higher than in June, 1969. Cow numbers at 1.7 million were 42,000 higher. Cattle and beef output this year is expected to be above last year's level but milk production is expected to be somewhat lower than in 1969. There was a significant movement out of milk into beef under the stimulus of the increased grants under the beef cattle incentive scheme. Furthermore the weather in May and June were not favourable to milk production. Pig numbers in June last were nearly 40,000 up on 1969 and output this year is expected to compare favourably with 1969. While sheep numbers have been declining the period of decline now seems to be ending. The increase in both the wheat and barley acreages was substantial but, with somewhat lower yields, production is estimated to be about the same as last year.
Operating costs have increased considerably during the year, particularly the cost of feedingstuffs, fertilisers and wages. The increase in operating costs, coupled with the increase in living costs, to which the rapid increase in earning outside agriculture contributed, had led to a deterioration in the relative income position of farmers. On present trends we estimate that income per person engaged in agriculture should increase this year by some 6 per cent to 7 per cent which in normal circumstances would be reasonably satisfactory. Taking into account, however, that non-agricultural incomes are expected to rise by 13 per cent to 14 per cent, it is obvious that something more needed to be done for farmers if their incomes are to be kept in reasonable relationship with incomes outside agriculture. I have been discussing this problem with farm organisations and the matter has been under consideration by the Government for some time.
The Government have now decided on the following series of measures to improve the income position of farmers. The price of creamery milk is being increased and the tier system of payments restructured. The rates of Exchequer milk price allowance payable to creamery milk suppliers are being increased, with effect from 1st September, 1970, to 11d per gallon on the first 7,000 gallons delivered by each supplier per annum, and 7d per gallon on his deliveries between 7,000 gallons and 30,000 gallons. Compared with the present rates, these new rates give an increase of Id per gallon on deliveries up to 14,000 gallons per annum, and an increase of 3d per gallon on deliveries between 20.000 and 30,000 gallons per annum. The rates for gallon-ages in excess of 30,000 remain unchanged but, of course, those supplying over that amount will receive the increase in price I have announced for their first 30,000 gallons.
The effects of the price increase and restructuring of the tier system are two-fold. Not only is the price of creamery milk increased for all producers but the increased and uniform rate of 7d per gallon for the 7,000-30,000 gallon range will be a new incentive to the smaller producers to expand their output to a more efficient and economic level. The cost to the Exchequer of these increases in the rates of creamery milk price allowance will amount to more than £2 million in a full year. The increases I have just announced are of course in addition to the increase announced in the Budget last April of Id per gallon on the first 7,000 gallons delivered by each supplier.
The guaranteed minimum prices for top-quality pigs will be increased by an average of 10s per cwt deadweight as from 7th December, 1970. The floor price for feeding barley of the 1971 crop will be increased by £2 10s a ton to £26 10s and an appropriate consequential adjustment will be made in the price of pigs from the autumn of 1971.
The sugar beet acreage will be increased by 6,000 acres next season.
As already mentioned, the rates of support payment under our beef and lamb export guarantee scheme have been increased by amounts equivalent to the weekly increases made in the British guaranteed prices for fat cattle, sheep and lambs—including Irish store animals fattened for at least two months in the UK.
It will readily be appreciated that these measures extend over a wide range of commodities—cattle, sheep, milk, pigs, barley and sugar beet— and should have a very significant effect on the income and continued prosperity of the farming community. It is estimated that these measures will cost the Exchequer an extra £4 million in a full year. Total State expenditure in relation to agriculture in 1971-72 is at present expected to approximate to £100 million.
