asked the Minister for Industry and Commerce if his Department have any plans to control the price of fertilisers; and, if not, why.
10.
Ceisteanna—Questions. Oral Answers. - Fertiliser Prices.
9.
asked the Minister for Industry and Commerce if, in view of the fact that Moroccan rock phosphate is to be reduced in price this year by 25 per cent, he will indicate the steps he will take to ensure that this reduction is passed on to Irish farmers.
I propose, with the permission of the Ceann Comhairle, to take Questions Nos. 9 and 10 together.
The present arrangements in relation to fertiliser prices were introduced by me in December, 1973, on the recommendation of the National Prices Commission. The commission had concluded that it was not possible to devise for price control purposes a formula that would relate the prices of end products to those of the materials used in their production. Accordingly, the price control arrangements for the fertiliser industry as set out in the commission's November, 1973, report were formulated. However, I am expecting a report from the Prices Advisory Body on fertiliser prices and when this is available I will be in a better position to assess the adequacy of these arrangements in present circumstances.
With regard to the reduction in the price of Moroccan rock phosphate, my Department have requested the three main fertiliser manufacturers to submit details showing the effect of this cost reduction on their prices. I should point out that increases in other costs may have the effect of counterbalancing the reduction in the price of this particular material.
Am I to take it from the Minister's reply that even though phosphate is reduced by 25 per cent, the manufacturers can say that other components have increased and that there is no way this increase can be passed to the consumer? Can they balance one thing with the other? What powers have the Department over that?
At present the mechanism relied on is the mechanism of price competition which since December, 1973, in a competitive situation, has been, in my view, the most effective method of price control. When you have a fixed price, that becomes the price. The fixed price is useful when prices are rising rapidly. When there is sharp competition and prices are steady or eroding, then the competitive mechanism is best. We changed over to the encouragement of the competitive mechanism in December, 1973. If we now find that that is not giving the consumer — the farmer — the best service, we can change that. In regard to balancing a rise against a fall, if there have been genuine rises in other components of the finished fertiliser, then it is just that the manufacturers should be able to recompense themselves.
Such as the delivery charges put up by Deputy R. Ryan, Minister for Finance.
In view of last year's situation when there was a vast reduction in the use of fertilisers, when does the Minister hope to have the prices commission report from the three main fertiliser manufacturers?
The Deputy is raising another matter.
The Deputy referred to a report but it is an inquiry that has gone out simply requiring an answer as to what component of their final price is represented by rock phosphate and also what was the amount of the reduction so it is on the basis of a reply to that inquiry that there will be an examination of whether a change is necessary in our current policy. In general, we have been served very well in recent times by the price competition mechanism. I would remind Deputies concerned with farmers' interests that when we went to the competition mechanism in regard to animal feedingstuffs we were criticised bitterly. The result of our doing that has been that the margins are very narrow and that Irish farmers are getting animal feedingstuffs at very competitive prices.
If I table a question next week, will the Minister give me an answer?
I will endeavour to answer a question tabled by any Deputy.
I am referring to a question relating to the inquiry.
Would the Minister not consider it reasonable that manufacturers and merchants who, in anticipation of big increases in fertiliser prices, were in a position to stockpile and make big profits should be prepared to pass on any reduction to their customers in the same way as they were prepared a short time ago to accept the profit?
Yes, that is reasonable. This is an area where there is a real temptation to speculate and stock up. Sometimes people come badly out of such speculation. However, such practices are deplored universally but even with the most rigorous price control and with thousands of inspectors such practices would be difficult to eradicate.
Is there any fixed date for a reply to the inquiry?
No.