Section 2 proposes to increase the share capital of the company to £27½ million which appears to be a considerable increase on the existing share capital. The next section allows the Minister for Finance to take up £22½ million of that share capital but it is not clear by whom the other £5 million would be taken up or would be held. Perhaps, the Minister would explain that to the House.
Nítrigin Éireann Teoranta Bill, 1975: Committee and Final Stages.
Section 1 agreed to.
SECTION 2.
Question proposed: "That section 2 stand part of the Bill."
Section 3 provides that the Minister for Finance might not, without the prior agreement of the Government, take up further shares in the company but the further shares so taken up would be limited to £5 million which is the difference between the £27.5 million share capital referred to in section 2 and the £22.5 million referred to in the earlier part of this section.
Does the Minister for Finance propose to take up all the share capital or is any of it held either at the moment or is it proposed to be held in the future by anybody other than the Minister for Finance and, perhaps, one or two nominees?
The Minister for Finance proposes to take up all of the share capital.
Will he then hold 100 per cent of the share capital?
Yes.
The increase to £27½ million in the capital of the company is a very substantial one. The reason given for this increase is the proposal of NET to establish a factory which is already under way at Marino Point in Cork to manufacture ammonia and urea from natural gas which will be obtained in the Kinsale Head find. It has been suggested to me that part at least of the reason for the large increase in the share capital may not just be for the purpose of establishing the factory at Marino Point but also to give Nítrigin Éireann Teoranta scope to take over an existing fertiliser firm which is in difficulties at the moment and which, in fact, to all practical purposes has closed down, for the time being at least, and has laid off a large number of workers. The firm in question has, as is well known, run into serious financial difficulties due to a variety of reasons, some being similar to the ones which caused Nítrigin Éireann to have such a bad year last year. In the case of the private firm in question it was due to a number of other reasons also which might not necessarily be applicable to Nítrigin Éir-eann.
It is thought by some people that the private firm in question may well have difficulty in reopening and if so the proper approach of the Minister should be that Nítrigin Éireann should be instructed to take over the factories in Dublin and Cork of the private firm in question. It is thought that the considerably increased share capital proposed in section 2 for Nítrigin Éireann could at least in part be used for that purpose. I should like to ask the Minister if, in fact, any discussions have taken place or any consideration been given to the possibility of Nítrigin Éireann Teoranta taking over the firm in question in order to try to preserve the jobs of the 1,000 or so people who at the moment are seriously affected by the temporary closure of that firm
The Deputy will appreciate the sensitivity of the area of discussion which we have entered. I know he would wish to say nothing, certainly I would wish to say nothing, that would add to existing difficulties. But I can tell the House that very detailed investigations have been carried out in this matter of some duration and considerable depth. I can also say that, while I would not preempt the freedom of decision as it were for all time of a responsible management the moneys mentioned in this section, and in the subsequent section, are not intended to be used in part for a purchase the Deputy referred to.
I appreciate that and I should like to ask the Minister that if these moneys are not intended, which, of course, I accept, nonetheless are discussions on the lines I have indicated going on or is consideration being given in his Department or by the board of Nítrigin Éireann Teoranta to the position that arises in the other firm and the possibility of permanent redundancy for many of the workers in the other firm if the difficulties which the other firm, and the group of which it is a member, cannot be overcome?
I would hesitate to offer opinions or predictions about the difficulties to which the Deputy refers but I can assure him that this is a matter of very considerable concern in my Department, that it has been very thoroughly investigated. The management of NET have been involved in this consideration. I am not trying to be evasive but it is, as the Deputy knows, a delicate situation and a situation in which it is not possible to predict the outcome.
I do not think it would be helpful for me to say any more. If the Deputy wishes, I would be happy to discuss the matter with him, but I do not think it would be helpful to do it in the House.
I accept that, and the Minister's attitude in regard to it is reasonable. We have established that the Minister and NET are actively concerned with the problem that arises in relation to the other fertiliser firm, Presumably, they will do whatever is necessary to try to preserve the firm and the employment of those concerned.
I should like to make some reference to the proposal of NET to construct this new factory at Marino Point, Cork, and I presume this is the most appropriate section on which to do it. I and other Deputies had a number of inquiries on the last day but, due to the operation of the guillotine, the Minister was unable to reply to them, or at least, he had only a few minutes in which to do so but did not avail of. I do not want to put all these inquiries again as it would be a waste of time, but, perhaps, the Minister has a note of some of them and he might avail of this opportunity on this section, which is the most general one, to reply. A number of the points were made, particularly in relation to the price at which An Bord Gáis would sell the natural gas to NET; the question of Portuguese imports; the question of whether or not the alleged dumping of imported fertiliser is being investigated by the Dumping Commission; the question of the effect on agriculture of the constant drop in usage of fertiliser; and what the projections for future uses of fertiliser now are in the light of the high prices that are being charged for Irish fertilisers.
I should like if the Minister would deal with the question of the construction of the pipeline to the Marino Point factory and the various matters that arise in relation to that. I raised the question also of the comparatively bad value which this country will get from the usage of a fairly high proportion of natural gas for the generation of electricity and whether there is any possibility that either Nítrigin Éireann Teoranta or any other company might establish a similar factory to the Marino Point one in order that a more beneficial utilisation of the natural gas might be carried out and also whether or not the Minister has any plans for what hopefully will take place, namely, the discovery of other gas deposits of at least equal value to the Kinsale Head find which Nítrigin Éireann Teoranta will be using in part now.
I have, indeed, detailed notes on the points Deputy O'Malley raises, not that I was able to anticipate him but because the points were made on Second Reading and to which I did not have time to reply. I assure the House that the lack of time was no will of mine. I am happy to reply to them now and I should like to put them on the record of the House. The points were taken seriatim from speeches made by Deputies on Second Reading.
As a matter of record, Deputy O'Malley said the price of Irish manufactured fertilisers has increased by approximately 250 per cent on average in the last two years. It is important to make distinctions here because the decline in usage is a very serious thing and it is necessary for us to be precise about these things. What he said was true for phosphatic fertilisers, and, indeed, the figure might be a bit on the low side, although the price of phosphates has been coming down a bit. The particular product we are talking about in relation to Marino Point is calcium ammonium nitrate and there the increase has been 83 per cent. I am not suggesting that is not very serious but it is approximately one-third of 250 per cent.
Again, it is a matter of record that the sales of compound fertilisers, that is, fertilisers containing nitrogen, phosphate and potash, have declined by 40 per cent in the past year or so. I deplore, together with Deputies who did so on Second Reading, this as being very serious. But, in fact, the sales of calcium ammonium nitrate increased by 10 to 15 per cent in that period. It is not possible to make firm predictions about future consumption for the reason that there is such a close relationship between the level of consumption and the margin of profitability of agricultural enterprises. When farmers are poorer, when the gap between what they have to pay for what they buy in and the return on that investment diminishes, they are inclined to slow up in their investment. It is predicted—the different commercial firms have their experts—that a growth rate of between 2 to 3 per cent will be resumed after the beginning of 1976 and will continue thereafter. It is expected that there will be a growth resuming in the beginning of next year.
Price is a matter of commercial value and it is not the practice to make public prices such as the Marathon sale price but we can say that if, in fact, Marino Point were in production now, calcium ammonium nitrate from NET would be cheaper than it is. Notwithstanding remarks made about the cost of the gas and the careless and imprecise comparisons which have been made between onshore and offshore—remember that for offshore one has to have the pipeline in the water and it is dearer to do this—from sources which I entirely trust, I believe the deal that has been done is a very good one. I want to put that formally on the record of the House. The comparisons between, for example, the price coming out on land in the United States or on land in the Middle East or the Persian Gulf with what comes from underneath the sea are not fair comparisons; they are profoundly misleading.
I want to say something about the import of fertilisers which has been exercising many people's minds recently. As Deputy O'Malley recognised in his Second Stage speech, there are two sides to this because, of course, one wishes that Irish consumers, namely, the farmers, would have fertilisers at a reasonable and competitive price. On the other hand, one wishes to guarantee the future of the Irish industry and it is a delicate balance. This has been referred to An Coimisiún Dumpála who are carrying out an investigation, which is not completed. The commission have recommended to me the imposition of a provisional anti-dumping duty of £8 per ton on imports from Portugal. I have made an order, which will become operative at midnight tomorrow, from the beginning of 31st July.
Is this on urea or calcium ammonium nitrate?
On calcium ammonium nitrate, CAN, because that is the stuff that is in fact coming in from Portugal. I would emphasise two things, that this is provisional and that the investigation is continuing. There is a provision for relief from the duty if the importer can establish that the goods have not been dumped or that the margin of dumping is less than £8. It is provisional. It has been recommended by An Coimisiún Dumpála to me and I have accepted that recommendation and put it into force. This, I may say, is the first announcement of it. I thought it appropriate to do it in the House if possible and I had the good fortune of this Committee Stage on which to announce it.
In regard to the Gas Board designing and constructing the pipeline, I should inform the House that that board are an agency of the Department of Transport and Power and not of my Department. It is a matter for the Gas Board to give the details of the design and construction. I am not trying to be evasive: it is not a matter of my Departmental responsibility. In so far as possible, that information will be given to the House if inquiries are made in the appropriate quarter.
The interesting question which I want to spend some time on is that of whether one uses this fine raw material—it is not just that, it is natural gas, it is very good and clean natural gas—purely as a basis for a chemical industry or whether one uses some of it to generate electricity. There are two conflicting considerations. One is that it is a lovely raw material and it is nice to get the maximum added value by doing something like some sort of synthesis to make urea, calcium ammonium nitrate or whatever is the starting point, for many things.
On the other hand, if we think back to October, 1973, we have the circumstance that we are exceptionally dependent on imported energy. We cannot develop our hydro resources any more. We cannot develop peat very much more. We do not have the coal reserves let us say of the Germans or the British. It is therefore very desirable that we use some of what we find to secure, not from the efficiency point of view, because what Deputy O'Malley said about efficiency is right, but from the security and strategic point of view, the use of some of what we find, or some of our first find, to guarantee electrical production, that we should add it in the hopefully unlikely event of there being an embargo on oil. Then, at least on the basis of hydro-power, peat and our own gas which we have, we can keep a substantial part of our electrical production going. That seems to me to be prudent.
On the one hand, you have an argument of efficiency and on the other hand you have an argument of security. I think the correct balance is to give some of it for electricity generation and some of it for making chemicals. That argument would not apply with further finds. With further finds I think the argument is very strongly in favour of using it for a capital synthesis.
What are the percentages of the two usages?
I do not want this to be considered an exact answer because I cannot give a hard answer, but my understanding is that the usages are approximately equal between electricity generation and the synthesis of calcium ammonium nitrate of that order of magnitude. I am sorry I cannot be more precise.
Let me turn to planning in regard to future discoveries. The general planning, what I might call the planning carried out by staff who are currently in the employment of people like the Industrial Development Authority, is indeed going on. Detailed planning, as Deputies will know—feasibility studies—can cost £50,000, or £100,000 for a certain sort of chemical development. We think it inappropriate to put that sort of money into hypothetical or speculative development plans when we do not know what the resource is. We think it appropriate instead to be carrying on studies of a more general kind with a much lower cost than that, and these are going on in regard to the optimum kind of use between different possible syntheses.
I should say in this context that this is an area of investment that absolutely eats money. The quantity of investment is immense and the labour content is very low indeed. I do not suggest that the decisions in this area are easy ones. I am informed that the ratio of NET use as to ESB use is 52 to 73, a little bit more to the ESB— out of 125 cubic million feet per day, 52 to NET, 73 to the ESB. I have tried to answer the points made by Deputy O'Malley on a previous occasion. If I have forgotten any point I will try to answer it now.
I welcome the imposition of a levy of £8 a ton on CAN from midnight tomorrow. I am delighted to hear this.
I hope all the farmers of Ireland will agree with the Deputy.
I know the farmers were the first to realise that they were not the people who were gaining by it. From my own survey and having discussed it with the farmers involved, they felt that they were not getting the benefits of these imports. I wonder if the Minister would spell out where the plant in Arklow will fit in to the overall development of NET in Cork. Is it presumed to bring the gas from Cork via pipeline to Arklow for development or are we to have this nitric acid plant in Cork?
Firstly, it is not proposed to have a nitric acid plant in Cork. Secondly, a pipeline, I understand, is not economic but there will be the transfer of ammonia to the Arklow plant. All of the planning of NET is to increase the security and to guarantee the future of Arklow by reciprocal relationship with Marino Point. If you can guarantee from internally the supply of ammonia, that position is much more suitable than the one that is obtaining currently. I want to put on the record of the House that there is no intention to undermine or to downgrade the future of the Arklow plant, which is secure and the security of which is increased by the development at Marino Point. They are not seen, in the planning or in the execution, as conflicting enterprises.
I mentioned at one stage an external EEC tariff being imposed on products or supplies coming from countries outside the Common Market, such as Portugal. Has that been considered at all? Is it feasible?
There is an Irish and an EEC common customs tariff on calcium ammonium nitrate and on other superphosphates, CCFs, urea and so on. The position is that under Article 39 of the Accession Treaty there will be alignment of the common purchasing tariffs, and the process is as follows. We took a first step on 1st January, 1974, of a 40 per cent alignment; 1st January, 1975, already down another 20 per cent. That is a 60 per cent alignment up to now. On 1st January next year there will be another 20 per cent alignment and then a final 20 per cent, making 100 per cent alignment. This is total alignment between our and the other Community countries' tariffs by 1st January, 1977.
In the case of urea, that means an increase in our rate. In the case of other nitrogenous matters, including calcium, ammonium and nitrogen, it means an increase. With CCFs, of which there are two rates, a Commonwealth rate and a general rate, it means a diminution. With superphosphate it means a diminution except in the case of Canada and Northern Ireland where it means an increase. I can give the Deputy the details of that. It is, perhaps, not suitable for saying across the House.
I compliment the Minister on his swift action in introducing an £8 levy on imported fertiliser. Last week on this Bill we pointed out the seriousness of this problem to the Minister, who was well aware of it. I am glad to see he has acted so swiftly, even before the commission had completed their findings, in endeavouring to close this loophole which will obviously be an embargo on the importation of fertilisers.
I should like to ask the Minister about the £22 million. It is mainly for the building of the plant in Cork, but after being in existence for 12 years there are obviously major renewals required, particularly in the Arklow factory in the production of some of the acids and the other ingredients required for the production of fertilisers at Arklow. Last year there was an explosion there. Thankfully, nobody was hurt and there was no loss of life. The accident took place on a Sunday when there were very few people there. It was felt locally that a number of the plants would now be reaching the end of their useful life and there would be separate requirements of renewal there as a result of the very active use of that plant, particularly over the last few years. We have seen the figures for production. The factory was intended to produce something like 300,000 tons. Now it is almost double that. I should like to know if part of this extra capitalisation will be used for the extension of the present factory at the site in Arklow as well as the main bulk of it going to the Cork plant.
I would couple my reply to that to something I might have referred to earlier. Firstly, let me make it clear that the moneys in this Bill are not intended for Arklow. The financing of the continuing updating of Arklow will be and is being achieved from cash flow. Of course, one can say that it is a firm which is a single enterprise and has two plants. Its financing is looked at globally and what eases the situation in regard to one plant eases the situation totally. I said the last day that all borrowings would be repaid by 1982. The discount in cash flow and other projections for the future indicate that the whole enterprise will be a significantly profitable one. The other point I wanted to refer to which, in fact, Deputy O'Malley raised the last day was a matter of the borrowing. He said:
From what I can read in the balance sheet I do not think the company has any resources other than it got from finance.
He continued:
I wonder whether this borrowing is made abroad or whether it is to be raised domestically.
The answer to that is related to what Deputy Kavanagh said. The point is that when one is putting in chemical plant this is a large purchase which comes from a particular supplying country. It is a very expensive bit of plant. In regard to these things, which are at relatively cheap rates of interest, firstly the European Investment Bank money is available. Secondly, there is the British Export Credit Plan in relation to British plant. We have a similar thing for NET. The initials are the NCM, but the NCM is the Netherlands equivalent of the export guarantees, and the French equivalent is called COFAST which is a company to help foreign exports of French chemical and other capital goods at attractive interest rates. There is what one might call a soft borrowing power of a considerable kind because of the nature of the investments.
I would sum up by saying that, while none of the money in the Bill is intended specifically for Arklow, it is well recognised that chemical plants must keep up to date with technology and productivity. The commitment to keeping Arklow a highly productive and modern plant is a firm one. It will be possible to finance that from cash flow.
When the Minister replied earlier to some of the points I had made, he declined to state the price of the gas being sold by the Gas Board to NET on the grounds that it was a commercial matter, and so on. I do not want to follow that point, but it is debatable whether there should be non-disclosure of important national contracts such as that. This is the first contract signed by a user of natural gas in this country. While I am not asking the price as between Marathon and the Gas Board, I did ask the price as between the Gas Board and NET and whether the Gas Board take any profit on the transaction. I suppose they have to have something to cover their overheads but whether the profit is of any significance is a matter of national public importance.
Having said he could not disclose the price being paid by NET for the gas, the Minister went on to say that the ammonia and urea which would be produced by NET from natural gas at Marino Point would be cheaper than what is being produced at the moment in Arklow. The Minister's phrase, "would be cheaper", suggests it might be as little as 5 per cent cheaper. I thought it might be 50 or 75 per cent cheaper because of the extremely valuable material being got at a comparatively low price and a much greater ease of manufacture from natural gas.
Let me say at first that I have a great deal of sympathy with that point of view. This is a very important contract and the maximum possible disclosure is desirable. The Deputy accepts that the Marathon-Gas Board step is one where commercial considerations preclude giving details. On the Gas Board-NET step—I do not have the figures now and, indeed, the Gas Board is the responsibility of the Minister for Transport and Power, not mine— but I will certainly urge him, and I will myself look into the matter, that we should say as much as we can within the normal limits of commercial protection because it is in the public interest to have disclosure to the maximum possible consistent with proper commercial practice.
In the matter of how much cheaper, I hesitate to quantify because this is a very large plant and it will be some years before it is on its feet, and we have a product. It is very difficult to predict what will happen to international prices in that time. So, to make the comparison between what we could borrow internationally when we cannot predict the price of the international product is difficult. When the Deputy asks do I think 5 per cent to 10 per cent cheaper or 50 per cent to 75 per cent cheaper, 75 per cent cheaper is enormous; 5 per cent cheaper is not nearly enough. I believe it will be very substantially cheaper, more than 5 per cent and indeed more than 10 per cent, but I would find great difficulty in quantifying something that is three years away. It is difficult to predict the evolution of prices.
I am sure the Minister appreciates the importance of a significant reduction in price from the agricultural point of view and therefore from the general Irish national point of view, because with the drop in usage last year the agricultural effects of very dear fertiliser which we have at the moment will be very serious for the country as a whole. I would like to refer to the chairman's statement in NET's accounts for the 18 months ended 31st December, 1974. He stated:
Turning to the national field the six-month period July to December, 1974 showed a serious decline in fertiliser sales, phosphorus and potassium each falling by 35 per cent to 40 per cent compared with the corresponding period in 1973. It should be stressed that a continuation of this trend through 1975, as is likely, will bring fertiliser consumption back eight years to the levels used in 1967. If such a situation should persist for longer than one year the indications are indeed very serious for Irish agriculture and consequently for the whole economy.
He goes on to develop that point at length. Because of what has happened and what is happening in relation to the usage of fertiliser here it is vitally important that there would be a substantial decrease in price as a result of this. For these reasons it is very hard to gauge the matter unless we know the price which NET are going to pay for the gas and what the other likely costs will be. In relation to that it would seem that since nitric acid or some other component must be added to the ammonia which will be manufactured at Marino Point and since it is not supposed to have a nitric acid plant at Marino Point, presumably all or nearly all of the ammonia will have to be transported to Arkow. Is it proposed to transport that by rail or road or by ship? I understand that the transport of ammonia is not easy. It has to be kept in liquid form at very low temperature and it gives rise to various problems. The form of transport would be important. The most satisfactory form of transport would be by ship.
It will be by sea.
It would be the most satisfactory from various points of view, not least the question of danger, if transported by road.
It is a mechanism for stabilising the future of the Arklow plant to have that indigenous source of ammonia available. I come back to the point that the matter of price to the Irish farmers is extremely important and, as I said earlier, it is anticipated that in the area of the production of NET growth will resume in 1976 and their estimate is of 2 per cent or 3 per cent per annum growth thereafter. The great worry is that by the end of this year NET will be importing approximately 120,000 tons of ammonia per annum to supplement the Arklow production of ammonia and that there is a difficulty about secure supplies of ammonia. Ammonia is not freely available as an international commodity. While marginal tonnages can be secured on international markets from various sources, long-term contracts that are secure are difficult to come by at this time. There is the question of security of supply as well as price which is very important.
Could I make a final point? It is proposed, as the Minister has told us, to transport the ammonia from Marino Point to Arklow by ship. Whether NET take over Gouldings or not, will NET make some of that ammonia that will be manufactured in Marino Point from natural gas available to the Goulding factories in Cork or Dublin and possibly to Albatross in New Ross also?
I understand that there will be surplus ammonia and that it will be commercially available. As to which of the other Irish users decide to use it, there will be commercial considerations for them but it will be so available. Ammonia will be available either to Gouldings or to Albatross if they wish to purchase it.
Question put and agreed to.
SECTION 3.
Question proposed: "That section 3 stand part of the Bill."
I just want to be clear on the question of shareholding. The Minister has already answered this question but I want to clarify it a little further. Is the Minister for Finance at the moment the only shareholder apart from his nominee, and will he remain the only shareholder?
Yes.
When NET hopefully, as they project, will have cleared their capital liabilities and so on by 1982, will the Minister get a full commercial dividend at that stage from NET or will the profits which hopefully may exist after 1982 then be ploughed back into the industry?
My own belief is that the greatest dividend to Ireland would be the growth in size and in strength and indeed some diversification. Of course, there is already the recovery of what was a surplus of waste gypsum in Arklow, which is a welcome development. This is something which we ought to be flexible about. In the long-run it is desirable that the State should operate by hard commercial criteria, by the rules of the market place. While it is very desirable that we develop and grow and have the potential in fertilisers and possibly in some other areas that NET has developed, or is developing or may develop, there will be a change in the articles of association to permit a dividend because at a certain time we would have a level of growth where the State would wish to get a financial return as well as a return in technology and in employment. That I think is some distance away. The growth and development of the heavy chemical end is the priority rather than a repayment to the State.
Could I ask the Minister if this diversification will include an expansion into sea transport, including the purchase of a ship to transfer the ammonia from Arklow since he has conceded that this will be the cheapest mode of transport? Although it may not be under the aegis of the Minister's Department, does he accept that the facilities in Arklow port and indeed in Wicklow port will be sufficient for the safe unloading of the ammonia? There is at present very extensive port improvements being done in Arklow but is the Minister satisfied that the supplies will be regular enough because of the work being done?
I regret that I cannot, in fact, give the Deputy a firm answer. I do not know the details of the plans of the company in that regard and, indeed, in general I favour a good deal of managerial and commercial independence for such undertakings. I would make a general observation in regard to cargoes like ammonia, that it is necessary for our economic growth that we move cargoes like this around the country and for the future development of ports they must be prepared to handle things like that and that with the knowledge that now exists if the proper precautions are taken both in advance in the planning and in the continuous scrutiny and invigilation in regard to the safety rules that this is something that is done all over the world very safely day after day and that if ports refuse to handle things like that what they are doing is simply cutting off their own future.
I do not think there is any problem in that direction.
In regard to Arklow there is none at all. In fact. I was thinking of something slightly different.
This section sets out the share capital which the Minister for Finance can take up and which it is proposed that he would subscribe for in order partially to finance the Marino Point development in County Cork but if as appears to be possible NET were to take over an existing fertiliser firm, would the Minister come back to the House with further legislation in relation to that? Would legislation be necessary either from the point of view of increasing the share capital or to empower NET to take over an existing firm which has been trading as a private company?
We are getting a bit into the realm of hypothesis. I do not think one can answer in the abstract without knowing the details the question as to whether or not either coming back to the Dáil for legislation or a further expansion of share capital would be necessary. I would simply say that I have no a priori position in this. If it were necessary I would certainly do so. I do not rule it out. But I think of course that if one wants to act briskly often mechanisms short of legislation can be found to do so though I am not in fact offering any judgment about the likelihood of it happening. I believe that the flexibility of companies is such that it could be encompassed without legislation if it were necessary but I do not rule out legislation.
If I could recap, with your permission, just for a moment. I wonder in the Minister's provisional levy of £8 a ton if he had considered or if he has entered into negotiations with another Department with a view to this figure being substantial enough to allow some form of subsidy to be given on fertilisers. Was that angle of it considered when the Minister came up with this figure of £8 per ton? Did he allow a margin there for a subsidy which would be necessary I would say in the interim a couple of years before this plant at Cork came into operation?
The question of fertiliser subsidy is not a matter for my Department but I can offer the Deputy some arithmetic, which is to say, that CAN consumption in Ireland is of the order, I think—this is out of the top of my head—of 300,000 tons a year. The sort of importation we have been talking about in this context is of the order of 8,000 tons a year. The 300,000 is only CAN. Of course there are other sorts of fertilisers used. So that no amount of duty or levy or anything else on a tonnage as small as we are now concerned with makes any relevant difference to the subsidising of other sorts of fertilisers. It simply is of a scale of magnitude which would make no difference.
May I put it to the Minister that while we accept his responsibility for the maintenance of employment in the fertiliser factories, the imposition of the levy on imported CAN that he has mentioned must necessarily mean dearer fertilisers for the agricultural industry? This in turn will make farming even less profitable than it is at present. In view of this case that seems to me to be unanswerable in so far as it goes and in so far as it relates to the overall quantity of imported calcium ammonium nitrate that we do get in and that does become subject to levy, it reinforces the argument that Deputy Murphy has made for the Government to consider the subsidisation of nitrogenous fertilisers, especially of the nitrate kind. It might be somewhat different to extend the subsidy to all nitrogenous fertilisers like urea. From my own experience of handling urea it is rather tricky material to handle. It is not as easy to make a case for the subsidy on urea as it is on nitrate. Nitrate in the form of ammonium nitrate is a basic material for animal protein which in turn is a raw material of our main export.
While I accept that the question of subsidy for fertilisers is a matter for another Minister, at the same time it is a matter for the Government as a whole. If the action of the Minister in the control of imported calcium ammonium nitrate produces dearer fertilisers for the agricultural industry it must impose an obligation on him as a member of the Government to tell the farming community in what way they will be compensated for the inescapable rise in fertiliser cost that will arise.
I would also like to ask the Minister—I was attempting to do so, when we were discussing the Second Stage and I think I could appropriately do it, Sir, on this section and I think it is vital to the interests of the fertiliser factory workers both in Arklow and in New Ross—whether it is proposed at any stage to develop a nitric acid plant in Cork, because in the first place it would seem to be a logical development of an ammonia plant but if it does take place and if the liquid ammonia is not transported, presumably by sea, to New Ross or Arklow it will mean that the calcium ammonium plants in New Ross and Arklow may well become redundant if you do set up a nitric acid plant in Cork.
Before the Minister starts may I remind the House that we have about five minutes left?
Thank you, a Chathaoirligh. I dealt with the latter question of the Deputy but I am pleased with the opportunity to talk about the price of fertilisers because Deputy Gibbons referred to an inescapable rise in the fertiliser price as a result of this action. Let us recap to say that approximate consumption of CAN is 300,000 tons a year, that the amount that this will refer to, that has not already come in, of this shipment from Portugal, we think is in the order of 2,000 tons still to come. That is 0.66 per cent, I think, of our total consumption. A change in the price of that will make very little difference—I would go so far as to say no measureable difference—to the price Irish farmers will pay for CAN. One has to strike a balance. Deputy Murphy and other Deputies are concerned with helping the fertiliser industry and with the health of the workers in that industry. We have to be concerned with protecting it. If we let it be smashed, the Irish farmer will have to pay more in the long run because the reason for smashing it is to get control of the market. We have to protect it on the one hand and yet protect it with the absolute minimum protection that puts up the prices for farmers not at all, or by no measurable amount.
I suggested an increase of £8 a ton. and said there was an arrangement for less, where dumping could be shown to be less, and an exemption where no dumping took place in regard to Portugal. It only relates to Portugal and is for half a year. I suggest that that scale of intervention will not make a measurable difference to the price Irish farmers pay for CAN. I recognise the importance of that input and how essential it is to have competitive nitrogenous fertilisers for the health of our agricultural industry.
There is no talk of a subsidy for nitrogenous fertilisers at the moment.
I am not the appropriate person to whom to direct that remark. I am not the responsible Minister. What the Deputy says is on the record and will be noted.
Has the Minister passed on what he said to us to the Minister concerned? When he was making a decision on the levy of £8 a ton I presume he discussed this matter in detail with the Minister for Agriculture and Fisheries?
That is correct.
Would it be a breach of any discussions that may have taken place if he were to tell the House whether he discussed a possible subsidy?
I do not think it would be a breach but I did not discuss a possible subsidy with him.
Section agreed to.
Sections 4 and 5 agreed.
Title agreed to.
Bill reported without amendment and passed.