When this debate was beginning, I mentioned that it was likely it would cover a wide area. That has been the case. The discussion ranged from the processing of pigs to the prospects for the farming community within the EEC. It was interesting during the debate to not the sharp divergence of the opinions expressed by Deputies, especially Deputies on the benches opposite.
I suppose it was inevitable that the substance of the debate concerned the imminent prospect of our entry to the EEC. Although I said at the outset that there would be a more appropriate time for going into details in relation to the EEC, that is when the White Paper is available, the matter has been referred to in almost every contribution that we have had during the debate. A lot of the comment was speculative. Most of it was ill-informed while, at the same time, much of it was constructive. Many Deputies would seem to be unaware that they were supplied with a booklet concerning Irish agriculture in the EEC. This booklet, which was issued by the Department of Foreign Affairs, is in very concise and easily understood terms. It sets out the main implications for our farm industry as that industry will be affected by membership of the EEC. I am not suggesting that it is, by any means, an exhaustive or detailed work of research but it sketches in easily understood language the main considerations so far as agriculture is concerned.
Regarding the divergence of opinions from the benches opposite, Deputies L'Estrange, Fitzpatrick and others foresaw that the prospects for our farmers would be increased substantially by our joining the EEC. This might be contrasted with what Deputy Treacy said. I think I am quoting him fairly accurately when I say that, when speaking of the Mansholt proposals, he describes these proposals as the death knell for our small farmers. However, Deputy Treacy did not attempt to substantiate that statement in any way because, of course, this is not the case. On the contrary, the prospects that entry to the EEC hold for us will prove to be a lifeline for many of our smaller farmers.
Since the Mansholt recommendations were referred to almost continuously during the debate, it is no harm to consider some of them. Of course the Council of Ministers in Brussels have not reached any final conclusion on the Mansholt proposals and until such time as they do, it is not certain how their decisions are likely to affect us. The basic aim of the Mansholt proposals is not in question. Simply, it is to create the kind of structural conditions in agriculture whereby the incomes and living conditions of farmers would be comparable to those in other sectors of employment.
Several Deputies spoke of what has come to be known as the flight from the land. If they were not speaking in ignorance, they certainly were speaking in a condition of failure to recall the sort of living that many of our small farmers have had in past decades. Deputy L'Estrange was forthright enough in dealing with this question this morning when he said that there are large numbers of very small holdings that cannot provide for their owners an acceptable standard of living. He said and, rightly so in my opinion, that the standards that had to be accepted in the past will not be accepted by the young people of today. Another factor in this structural question in agriculture is the age structure of our farming community and the fact that many of our farmers, as well as being rather elderly, are unmarried.
This inevitably brings up the question of succession when such people pass on. The use that this land could be put to is dealt with not only by Mansholt but also in the Scully Report which has just been published. It is quite clear that there is no basic inconsistency whatever between the aims and objectives of Mansholt and those of our Government for structural reform. Indeed it can be said that the measures we have been taking here to create viable farm units, for example the small farm incentive bonus scheme, the land settlement operations operated by the Land Commission, and the special assistance given to western farmers are very much in line with the thinking in the Mansholt proposals.
The Mansholt Plan itself, of course, has gone through several mutations in the three years since it was first enunciated. One of the most significant changes has been the departure from the idea that the viability of an individual farm could be determined by a particular acreage or size of farm or the number of cows. As they now stand the only standard of viability in the Mansholt proposals is that the farm eventually would be made capable of providing a decent income for its occupier, comparable with that available in other occupations. I do not think any sensible person would quarrel with that. There may be, and I am sure there are, people who do not themselves live in the country, who have other lucrative means of getting a living, people who like to look upon farmers as quaint, picturesque people with a rather low standard of living. They have a nostalgic wish for this status of our farming people to continue. It is not my wish, nor is it the intention of the Government, that large numbers of our farmers should be maintained at this subsistence level of farming. Every assistance that can be given to small farming units that have potential will be given to them.
As they stand at present the Mansholt proposals envisage a selective system of aids directed towards the modernisation of what are called development farms. These would be farms which could show a potential viability on the basis of a six-year farm development plan, somewhat in the same way as we operate our own small farms scheme. The form of aid envisaged for the most part is by way of interest rebate on borrowings. One question which we are considering is the extent to which our capital grants system of aids may be regarded as an equivalent. Once the basic principles of the Mansholt plan are agreed upon, member states, whether they be new or old, will be allowed a fair measure of discretion in the detailed implementation of their plans and in particular in the way in which they handle the financial aids to suit the different regions of the Community.
The idea that the development farms be given priority in the allocation of land available from vacated farms and the proposal to offer older farmers a pension if they wish to give up farming, which are other basic features of the Mansholt approach to reform, are in conformity with our own practice and their extension should not give rise to any particular difficulty. Any land becoming available that is needed for structural reform and the enlargement of small holdings can be pre-empted for that purpose and this requirement will take precedence over the demands for other purposes or any rights of foreigners. Deputy Treacy was particularly anxious on this score and there is no basis for his anxiety.
It is most important to note that it is fundamental to the Mansholt proposals that there is no element at all of compulsion in them. Nobody will be forced to give up farming and no farmer, whether he is big or small, will be deprived of the benefits of the greatly improved prices which will follow our entry to the EEC. We should remember that regional development policy is fundamental to the EEC approach and it will mean special assistance in the economic and industrial development of our rural areas. It will facilitate part-time farming and also give the people the benefit of higher prices. There are certain areas of our country at present where this can be seen working on, as it were, a pilot basis. There are certain industrial areas with rural hinterlands where we can see before our eyes, working in practice, the engagement in industry of smallholders and at the same time, and parallel to it, the fact that they derive additional income for themselves from their smallholdings, they invest more in them because they are in a better position to do it and, most importantly, they continue to live on their own farms and in their own localities, in their own parishes. For the maintenance of the structure of a rural community this is most important.
The Mansholt proposals again provide that small but potentially viable farmers will get increased incentives to expand and modernise through the purchase or leasing of additional land, capital for development and various other assistance. Also farmers who do not want to enter into a development programme can continue to benefit from the higher prices, or, if they wish, they can opt to sell their land for use in the enlargement programme of other holdings in return for a lump sum or an annual pension or possibly a combination of both. In this connection I should like to take up a point that was raised specifically by Deputy Murphy. This was his anxiety about the effects of assistance given on the social welfare status of farmers. It is important to refer to this because it reflects a widespread misconception about the position of small farmers in relation to Common Market regulations. I think he was afraid that small farmers who now get social welfare payments might lose them under Common Market regulations. This is not so. The Common Market agricultural policy is not concerned with social welfare payments. It is concerned basically with giving farmers a better living, better prices and more efficient production. The member States of the Community will be free to tailor their structural programmes to suit the requirements of their own farmers.
Several Deputies talked about driving people off the land. This is nonsense. The remarkable thing is that, in a couple of cases anyway, the contributors to the debate, who made this point about driving people from the land, at the same time maintained that our entry into Europe would have the most striking benefit for our farmers. The two things are quite contrary to each other. In any event, there is no question of driving anybody anywhere. It should be plain to anybody who studies the basic proposals that our purpose is to maintain the greatest number of people on the land, giving them a decent standard of living and giving them also special means to attain it. This talk about driving people off the land is just plain nonsense.
The policy of the Community will put a great many small farmers, who, up to now, have not been able to make the grade in a much stronger position. They will be in a far better position than they have been up to now because of market limitations and the effects these limitations have had on the prices they got for their products. I got the impression from the debate that some Deputies regretted the passing of the tier price system for milk and that they felt that the Department of Agriculture and Fisheries was vacillating in its price support policy. Of course, this is not the case at all. The abolition of the tier system does mean that larger producers are getting something extra but this does not imply in any way that medium and small producers, who are the vast bulk of our dairy producers, are not also benefiting and benefiting very substantially.
The multi-tier system, as most Deputies who study these things know, was introduced at a time when it was pretty well impossible to sell dairy produce and subsidisation of the resultant export losses became an increasingly large burden on the Exchequer. At that stage the multi-tier system was introduced in an effort to direct some of our milk, not into the production of manufactured dairy products, but into the production of beef. It was complementary to the introduction of the beef cattle incentive scheme which was very successful and which has been taken up, from recollection, by 50,000 or 60,000 herd owners, and at the same time it is very significant that the drop in milk production was negligible.
The criticism of the multi-tier system usually ignored the fact that in the 1970-71 milk year 84 per cent of all milk supplied to creameries fell within the first tier, the tier up to 10,000 gallons and, therefore, enjoyed the highest level of support. In fact, the first two tiers, that is, from 0-10,000 gallons and from 10,000-30,000 gallons together accounted for 98.7 per cent of all milk supplied to creameries for manufacturing. I was asked to speculate some months ago by some Deputy at Question Time as to what would be the likely out-turn of the creamery milk supply and I said it would be in the region of about 520 million gallons. In fact, I was wrong. It is in the neighbourhood of 530 million gallons. This is a record figure and well in advance of any year prior to the introduction of the multi-tier system.
There is the additional fact that a good many milk suppliers—about one in seven I think; I am not certain— opted for the beef incentive scheme. Nevertheless, because of the very much improved conditions now existing in the world markets and the need there is for us to bring our milk support price arrangements more into conformity with the EEC regulations, the changes in our system of support for milk prices which started on 1st December of this year have brought the end of the multi-tier system. It is not practicable to translate the measure of price support for creamery milk which prevailed under the old system into those which will affect prices in the new system. The two new pence increase projected in average milk prices in 1972 is derived from an estimate of average milk prices expected to be paid by creameries to producers in the coming year with the average prices actually paid in 1970-71. This is, broadly speaking the way it goes. The former price support system provided up to five new pence a gallon Exchequer milk price allowance plus one new penny a gallon quality milk allowance for milk up to a quality standard that is to say, a total of up to six new pence for quality milk. The new arrangement provides 5p through the butter price and 2p through the skim milk support price, that is to say a total of 7p. As compared with some 70 per cent of milk supplies that receive the quality 1p allowance in 1971, the full 1p will now be incorporated in the butter price covering all milk, an increase of 0.3p. The scheme for quality milk will still be continued, of course.
Added to that, the abolition of the tiering price allowance will have an overall average effect of about 0.2p. Bord Bainne were enabled to reduce their levy by 0.5p. All these amount to 2p of an overall average increase in 1972 as compared with this year. The actual increase for any individual farmer, of course, has in the past depended on the efficiency of his creamery and his own efficiency and on the control exercised over costs and the pattern of distribution for both quality and creamery milk allowances which applied in his case under the old system. It is natural to expect that big integrated plants with a capacity for producing a range of diversified products to meet extra demands as they arise and operating at low unit costs, will be able to pay, as they have been in the past, appreciably better prices than creameries operating on a small scale.
This underlines again the pressing need for the co-operative movement especially to press ahead with the rationalisation of their organisation as rapidly as possible. Deputy Creed identified this need for rationalisation and was very much in favour of it because, quite obviously, he is very familiar with it, seeing clearly the benefits derivable to farmers from its rapid implementation.
Deputy Crowley said to people in the co-operative movement that they should think very carefully whether their objectives were that the benefits of rationalisation should go to milk producers or whether they were motivated by some other reasons. I do not want to comment on that except to repeat that uneconomic units will in the end mean that people who supply those units will have to take a smaller price than they need to for their products.
I think I have made my attitude to the Dairy Disposal Company creameries clear on more than one occasion. The future of those creameries has always depended, and depends still, on the progress made by local suppliers' interests in developing a co-operative movement to a point where they will be able to take over the whole operation. As I said in my opening statement, no Minister or Department can push rationalisation on the co-operative movement because it is totally independent. The people involved in it own their projects, but I should like to say that the Dairy Disposal Company are quite ready to fall in with any programme of rationalisation that is in any way reasonable, and I forecast considerable progress in this respect.
The beef cattle incentive scheme was introduced to provide encouragement for the expansion of beef cattle herds. It was in recognition of the fact that, though market conditions in the dairying side of the cattle industry were very bad at the time of its introduction, it was still necessary for us to press on with the rapid expansion of our cattle herds and this was the reason for the beef cattle incentive scheme. It achieved its objectives. The great majority of the participants in the scheme were not creamery milk suppliers but about one in seven were creamery milk producers who moved out of milk and into the beef cattle scheme.
The dairy market will probably be much more attractive in EEC conditions than it has been, especially in the last couple of years, and I think it is reasonable to expect this to improve further because in the last couple of weeks the price of springers and cows has jumped very dramatically by up to £30 a head. This indicates the confidence of dairy farmers in the future of the milk industry. The removal of the tier system is partially associated with this. What amounted to a restraint on the production of milk can now go because of the far brighter prospects we see before us.
Deputy Treacy inquired about a proposed milk processing plant in Tipperary town. I understand the position about that is that in June, 1965, a proposal by a number of co-operative creameries in west Tipperary and east Limerick, in conjunction with the Dairy Disposal Company and a British milk processing company, to set up a cheese factory in Tipperary town was approved in principle for a licence by the Minister on condition that the local creamery structure would be appropriately rationalised. Subsequently the British concern withdrew from the proposal and it has not been proceeded with. Since then, there has not been any concrete proposal for the setting up of a milk processing factory in the area.
I was asked by Deputy Creed and others about the position in regard to the sale of Dairy Disposal Company creameries at Coachford, Terelton and Tipperary. Negotiations between the Dairy Disposal Company and Ballyclough for the transfer of the Coachford/Terelton creamery groups to the society have recently resulted in an agreement about the price and negotiations between the Dairy Disposal Company and Tipperary Co-op for the transfer of the company's Tipperary undertaking have also resulted in a price agreement. In both cases, the necessary further arrangements to conclude the deals are in train. I want to repeat that the Dairy Disposal Company are willing to co-operate in schemes of rationalisation and this will include the sale of units of co-operative groups as part of the rationalisation programme.
