asked the Minister for Industry and Commerce if his attention has been drawn to the recent substantial price increase for animal feeds; and the action he proposes to take in the matter.
Ceisteanna—Questions. Oral Answers. - Animal Feeds Price.
21.
I am aware of recent increases in animal feedstuff prices of up to £2.50 per tonne or about 3 per cent. I understand that these increases were necessary to compensate compounders for increased costs incurred by them. I might add that the prices charged for animal feedstuffs are constantly kept under the closest scrutiny by my Department to ensure that no unwarranted price increases are applied and I do not see any need at present for any other action on my part.
Is the Parliamentary Secretary aware that the 3 per cent increase is coming at a time when there is a drop in the price of the content of protein and that there should be no increase at this time of year when there should be no substantial increase in the cost of cereals? The answer would indicate that the increase is entirely due to wages or manufacturing costs at a time when an effort has been made to freeze this type of cost. Could the Parliamentary Secretary explain that?
The situation is that, as the Deputy indicated, there was a fall in protein content and there was a fall in the price of £4 per ton in the period September/November 1975 in the cost of soya bean meal which is a protein element, but fishmeal, which is another protein element, increased in the same period by £26 per ton. Barley increased by £1.01 per ton; wheat by £6.50 per ton and maize by £2.57. The overall increase in ingredient costs also increased the borrowing costs of firms who must have bridging finance. In addition, in the past year there were increases in other costs—wages by 25 per cent, paper bags by 50 per cent, electricity by 34 per cent, to give some examples.
The reply indicates that there is now a need for what we on this side of the House have been urging over the past two years, a reimposition of price control because the Parliamentary Secretary has mentioned——
The Deputy is raising a wider issue.
These increases should not be there because it is only storage costs that are involved and these should not account for an excess of £1.30 per ton.
As the Deputy knows, formal price control was removed——
After the Monaghan by-election.
——following representations from the farming organisations who are those primarily concerned. The evidence which we have in relation to the companies, their profits last year, the prices which they are charging and which we are monitoring closely, indicates that no excess profits were made and that the increases which are occurring are as a result of unavoidable increases in costs. The situation is being reviewed continually and I see no justification for the suggestion made by the Deputy.
If the situation is re-examined and if they find there is reason for complaint, would the reimposition of price control be considered?
If we found there was need for it, we would consider that. There is no such need at the moment. In fact the present situation encourages competition which is in the best interests of the consumer.
The Parliamentary Secretary said he saw no necessity to reimpose price control and that he had been so informed by farming organisations. He has been informed otherwise by this side of the House and many of us also know a little about farming and we think there should be price control. I cannot see justification for this increase and I think there is need to reimpose price control.
The evidence I have, which is concrete evidence, is contrary to the suggestion by the Deputy. I remember looking up this matter last year at the time and I found indications that from the time price control was taken off there had been a decrease in the margin of mark-up by animal feed processors.