Córas Beostoic agus Feola Bill, 1979: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Minister for Agriculture (Mr. Gibbons)

It was always the intention that in time legislation would be introduced to put the organisation on a statutory basis. I am certain that the time is now opportune to make CBF a statutory body and, in addition, to broaden the scope of its activities while making new arrangements for its financing. I have long felt that CBF has been unduly restricted and has been prevented from playing the kind of development role our livestock and meat industry now requires. I propose to give CBF certain important objectives and to make arrangements for adequate funds to be available so as to ensure that these objectives are attained. Our meat industry must capitalise on the opportunities now existing for increased production, processing, employment and exports. It is reasonable to expect that those who will benefit from the activities of the organisation should contribute towards its financing. Therefore I have included provision for a modest levy on cattle and sheep slaughterings and exports.

The proposals contained in this Bill have been framed following consideration of written submissions by the interests most affected—the Irish Fresh Meat Exporters' Society Ltd., the Irish Farmers' Association, the Irish Creamery Milk Suppliers' Association, the Irish Agricultural Organisation Society Ltd., the Irish Livestock Exporters' and Traders' Association Ltd., the Irish Master Butchers' Federation and CBF Teoranta. The submissions concerned were, in all cases, the subject of lengthy discussions between myself or officers of my Department and representatives of the organisations concerned. Naturally, not all of the organisations consulted saw eye to eye on all aspects of the proposals but there was general acceptance of the need for a stronger body, with wider powers and a realistic budget. One cannot reasonably expect all the views of producers, meat factories, live exporters and domestic butchers—whose interests are so diverse—to be reflected in a single set of proposals. I have, therefore, had to strike a balance which I feel will be broadly acceptable and will provide a framework within which all sectors of the industry, whatever their interests, can work together for their common benefit. In framing the legislation I have also had to take account of the constraints which our membership of the European Community imposes, particularly in relation to levies and to trading by State bodies.

I shall now refer to the more important provisions of the Bill to give Deputies some idea of the thinking behind them. Firstly, as regards the functions of the new board, these would, in brief, permit the board to engage in a wide range of promotional, informational and investigative activities in relation to livestock and meat including promotion on the home market. In addition it may carry out, either independently or jointly, some export trading in livestock and meat. This latter provision is qualified by the words "to such extent and to such markets as the Minister may from time to time direct". I want to make it clear that I do not see CBF going into competition with our existing exporters—quite the contrary, in fact. I intend that CBF will not have an exclusive selling role in any export market and will, initially at least, confine its efforts to third country markets. Pioneering work by CBF will, I feel certain, ultimately open up valuable markets for commercial exporters. There is, therefore, no question of CBF using its funds, whether derived from the Exchequer or the industry, to compete with our commercial exports to any market. The board is being empowered to set up a subsidiary body or bodies to carry out its trading role.

As regards membership of the board, it is difficult to give fair and reasonable representation to all interested groups and, at the same time, to keep the size of the board such as to facilitate the effective transaction of business. There will be ten board members—three representing farmers, two representing meat factories, one representing live exporters, one representing butchers, one officer of the Department of Agriculture, and two people nominated by the Minister for Agriculture, one of whom would be Chairman. The basic term of office of members will be three years, but in the interests of continuity, I am providing for retirement by rotation, so that one-third of the board will retire each year.

The Board is being given power to establish committees to advise it in relation to its statutory functions. Any such committees that might be established would have an advisory role only. They could include people who were not members of the Board. This arrangement would enable the Board, though itself a small unit, to draw on the expertise and specialist knowledge available to it throughout the livestock and meat sector in Ireland.

The Bill provides for the keeping of accounts by the Board and for the auditing of those accounts by the Comptroller and Auditor General. There is a special provision here—included at the request of the Comptroller and Auditor General—excluding from his scope the accounts of any subsidiary bodies of the Board. Such subsidiary bodies would be financed not from Exchequer sources but from the proceeds of the levy obtained by this legislation and would, therefore, not be an area of responsibility of the Comptroller and Auditor General.

The Board is being given the usual power to borrow, with the concurrence of the Ministers for Agriculture and Finance, for current and for capital purposes, and to charge its assets as security for such borrowing. Provision is also being made for Exchequer grants-in-aid to finance the work of the organisation. The new organisation will, therefore, normally have three sources of funds—the Exchequer grant-in-aid, the levy, to which I shall refer later, and borrowing. This should substantially increase the funds available to the body in contrast to the funds that have been available to the existing organisation, amounting this year to £642,000, exclusively from the Exchequer.

The Bill includes the usual provisions in relation to staff of the board, including the chief officer, and to their remuneration, conditions of employment and superannuation. The existing staff of CBF will become staff of the new organisation on terms not less favourable than they at present enjoy.

The Bill, as I have already said, provides for a levy to help in the financing of the board's activities. The levy specified is 50p on cattle and 5p on sheep and will apply to all slaughterings and all live exports of those animals. I would expect the levy, which will be payable directly to CBF, to yield about £900,000 a year. Since slaughterings for the home market are equally liable to the levy I have ensured that CBF will have power to undertake promotional campaigns on that market also. I have no doubt but that the levy will be more than matched by handsome rewards to the cattle and beef industry and to the producers, when the work of the new body bears fruit. The Bill also provides for the transfer of assets and liabilities from the old to the new body.

I commend this Bill to the House.

Mr. Bruton

I welcome this Bill on behalf of my party. In contrast to our attitude to the two previous Bills which the Minister introduced and which imposed levies, we will do everything in our power to facilitate its speedy passage through the Dáil.

It is well recognised by all concerned in the cattle industry that the CBF have been performing a useful role and if they are given extended functions on a statutory base they will be able to do their job more effectively over a wider field. Everybody here recognises the importance of the beef industry. It is worth noting that not only does it provide employment for the majority of farmers who are involved in one way or another in beef production, either in the production of stores of fat cattle, but it provides employment in towns. Approximately 5,300 people are employed in the beef production industry in Dublin, Naas, Leixlip and in the other meat plants throughout the country. That was the 1975 figure and it represented a significant increase on the figure of less than 4,000 employed when we entered the EEC in 1973. Anything that will promote the expansion of the beef industry will help in the drive for increased employment.

Certain problems in the industry must be overcome if we are to achieve an increase in employment and in production. There is a problem in relation to seasonal supplies. In the autumn approximately 50 per cent more cattle are presented to the factories for slaughter than are presented on average throughout the other months. To cope with that peak which only lasts for a month or two the factories have to carry, at considerable cost, the capacity to deal with that number of cattle throughout the whole 12 months. That includes buildings, equipment and men. It is not a very economical system from their point of view and it is particularly difficult in the case of beef because beef is a more perishable commodity than milk for instance. It is not easy to keep beef in a frozen condition in which it will retain its quality, whereas milk products can be processed into commodities like butter and cheese which will retain their full quality for a longer time than beef. A seasonal supply of beef not only causes problems with capacity but it must also be sold very quickly. The public do not consume more meat in October than at other times so obviously difficulties are created if we suddenly want them to consume more meat in October than they consume normally during the rest of the year. This means that very often Irish meat has to be more or less unloaded on to the European market at perhaps less than its intrinsic value. It is seasonal, we have it when everybody else has it, we have perhaps more than the market can sustain, and we have to get rid of it at that time. That obviously weakens our marketing position. It also makes the making of forward contracts for beef much more difficult to manage; it makes it difficult to get the best value and a good steady price with high added value in processed products. We must be able to promise our distributor, perhaps a supermarket chain in Britain or on the Continent a steady supply throughout the year. A meat factory caught up in that situation with indeterminate supplies for most of the year and then a sudden rush would not find it easy to maintain a forward contract because not many supermarkets will want 10,000 tons a month, then in October be prepared to take 20,000 or 30,000 tons and then go back to 10,000 tons a month in November or December.

That sort of deal is not on and the result is that much of our Irish meat does not attract the best price on foreign markets. This results from the seasonal production situation whereby 50 per cent more cattle are slaughtered in these two months in the autumn than are slaughtered on average throughout the year. The only way of breaking out of this seasonal production system is to winter on Irish farms more of the cattle which are normally sold for beef in October and November when the grass is becoming scarce and the farmer has not made arrangements to provide silage or hay. In these circumstances it is usually necessary to sell the cattle even at a loss because they could not be maintained during the winter.

There are two ways of breaking away from this system. First, we could encourage the production of much more silage. It has been estimated by Mr. Brendan Kearney of the Agricultural Institute that if we were to maintain a steady flow of beef throughout the year we would need to produce an extra 5.4 million more tons of silage. Therefore, the obvious and immediate step that could be taken would be to encourage farmers to make more silage and more hay and to fertilise their ground in time so that they might feed their cattle during the summer on a smaller acreage and set aside more ground for silage than would normally be the case. I think all people, whether experts or otherwise in the beef and cattle industry generally, would agree with that suggestion. We should encourage more winter feeding. I am aware that the Department are endeavouring to promote this idea but in the west of Ireland there is a need to do much more to encourage farmers to become involved in making silage. The problems in that regard are considerable because a farmer must either have his own foraging machinery or must hire the machinery.

In a small-farm area like the west it would not be economic for farmers to buy their own silage-making machinery because they might need to use the machinery only one day in the year. Therefore, the obvious course for them to adopt is to engage contractors to do the work but this raises a problem also since there are not enough of these contractors. The reason for this is that it is not profitable for the contractors to engage in this work in the west because of the number of small farms there and where only small amounts of silage would be made. There is a sort of chicken-and-egg situation in that the farmer does not make silage because the machinery is not available and the machinery is not available because there is not a ready-made demand for it. We must break this vicious circle and the way to succeed in this regard is for the Government, through the EEC westernaid package which is in the process of negotiation, to make money available for the provision of contracting services for silage making. I am aware that this proposal is among those being considered but I would make one point which I trust the Minister will consider carefully.

I understand the proposal is that this sort of aid would be available only to co-operatives. I do not consider that to be sufficient. Aid should be made available also to private contractors. I have nothing against co-operatives. They are very useful but we should use every means possible to make silage contracting machinery available in the west and private contractors should be part of that scene. If there were a sufficient profit element involved, the incentive would exist for contractors to do this work and to promote their services. It might not be right in regard to this proposal to discriminate in favour of co-operatives and against private contractors. Such discrimination would not serve any purpose.

The other alternative to coping with this problem of seasonal production is to have a variable system of intervention. It would be desirable that a higher price be paid for beef in the spring in order to encourage people to keep cattle during the more expensive winter period. If we had a system whereby a higher price was paid by the intervention agencies in the spring, farmers would be encouraged to keep their cattle until then and, consequently, there would be a more steady production throughout the year. I realise that this might require EEC approval but the Minister should endeavour to introduce a variable level of intervention system on the lines I have suggested. If we had this system farmers would be assured that if intervention was necessary, the higher price cattle in the spring would take account of the higher cost involved in keeping cattle during the winter. I am fairly confident that the EEC would accept a proposal on those lines because a policy would ensure that better use would be made of our existing processing facilities. This is relevant particularly if the EEC are to provide us with more money for improving our processing facilities.

We face considerable difficulties as an exporter of beef because we are the only country in the EEC which exports far more of the beef that we produce than is consumed at home. Most of the other members have larger home markets than export markets. Usually a country producing beef has an advantage on the home market. Because our competitors have bigger home markets than we have they have an advantage over us and there tends to be the situation that it is only when home production is not as good as it might be in these other markets that there is room for Irish beef. This means that we are much more susceptible to depressions in the international beef market than would be the case in respect of these other countries who can protect their own large home markets. Therefore, a marketing effort such as that now being undertaken by CBF will be very valuable because it will give us a grip on export markets.

Another point is that our home market has not been expanding to the same extent as our export market has been expanding. Our home market has not been expanding as fast as our export market because our consumption of beef is 5 per cent below our 1974 level, whereas the consumption of beef in the EEC has increased by 2 per cent since 1974. Oddly enough, the situation is that the consumption of beef on the home market has been falling while the consumption of beef on the Continent has been rising, although we produce an excess of beef. It may be that the consumption of beef on the home market has reached saturation point though I do not believe that that is the case. I think there is room for improvement in the consumption of beef on the home market. Not only have we a small domestic market for beef but we have a declining beef market, which is a matter of serious concern.

I notice that CBF will promote the consumption of beef on the domestic market. Their attention will have to be drawn to the declining beef consumption on the domestic market. The situation is that funds are being raised to encourage the consumption of more poultry on the home market and now more public funds will be used to encourage the consumption of more beef. As the consumer can only eat three meals a day, he may be encouraged to consume less poultry. It seems that more and more public money could be spent in encouraging consumers to switch products. We would need to ensure that that does not happen and that money is not wasted. Our concern is with the agricultural industry and the consumption of more home-produced products, but we do not want to see public funds wasted in cancelling the activities of other agencies who are financed from the same source. The involvement of CBF on the home market is to be welcome, subject to that reservation.

CBF have been concentrating their activities on the Continent because it is a big market for beef. The EEC is only 95 per cent self-sufficient in domestically produced beef. However, when one takes account of the various imports of beef under GATT, under the Lomé Convention, and under agreements with former dependencies of the UK such as Australia and New Zealand, the deficit position of 95 per cent is transformed into a surplus of 102 per cent or 103 per cent. The EEC has more beef than it needs when one takes account of the beef produced domestically and of the imports of beef. I have expressed concern with some of the agreements with Third World countries. I believe, however, that we should encourage the beef industry in underdeveloped countries. I would argue that certain arrangements made with eastern European countries are only adding to the problems of beef producers within the EEC. The biggest loser in this situation is Ireland because we have the largest surplus for export. The Minister should look carefully at agreements with eastern bloc countries to see if they are justifiable. In particular, the Minister should look at the arrangements for the import of animals from Yugoslavia to Italy. I would not go as far as some in attacking New Zealand because we must recognise that New Zealand is a vulnerable democracy, cut away from the rest of the world by totalitarian states in Asia and eastern Europe.

An Ceann Comhairle

The Deputy is straying too far from the subject.

Mr. Bruton

I believe that there are political considerations in the case of New Zealand but I think the Minister should be vigilant in relation to all imports of beef from outside the EEC.

The Bill is welcome in that it gives a statutory basis to CBF. CBF have been operating for some time with public funds and have been in receipt of Government grants. Grants should not be made available to companies that are not statutorily established. Public money should not be spent on bodies of any sort unless there is a statutory guarantee that the money will be used properly. Although CBF have been operating as a private company for a number of years they were not obliged to present to this House an annual report of their activities, even though they have been financed from public funds. As we provide the money, we should be given an account of their activities. There are no requirements in relation to the checking of their accounts by the Comptroller and Auditor General. It is regrettable that CBF have been so long in existence without being given a statutory form. I welcome the fact that they are now being given a statutory form and that there are certain assurances in regard to their accountability for public funds.

I also believe that bodies in the category of CBF are not subject to sufficient scrutiny. I have advocated that a Committee of the House be set up to review the activities of all of these bodies which are not at present covered by any committee of inquiry in this House. I have a motion on the Order Paper at the moment for this purpose and I have included CBF in it. It is important that any body receiving public funds should not only have to present accounts but should be subject to detailed scrutiny by Members of this House. I hope the Minister will in due course see his way to accepting that.

I also draw attention to the fact that there is no requirement that CBF present their annual report to this House within any specified time. The requirements for an annual report are dealt with in section 16 of the Bill and the report could be presented anything up to five, six or seven years late. I am aware that there are certain bodies which are required by law to present annual reports to this House and I know of one body—not under the aegis of the Department of Agriculture—which, although statutorily required to so do, has not presented any report to this House since 1974. There are bodies under the aegis of the Minister, particularly an Foras Talúntais, which have been up to 18 months late in presenting their annual report to this House.

It is just not acceptable for bodies in receipt of public money to be so late in presenting their annual report. No private company would get away with that. If a private company was more than 60 days late in presenting its annual report to the Companies Office they would be liable to prosecution. There would be a lot of State bodies whose board of directors would be liable to prosecution if they had to present their reports to the Companies Office. But they have to present their reports not to the Companies Office but to this House. One would have thought that they would have had a higher obligation rather than a lesser one in this regard and yet they have been late in the presentation of their reports. I would like to see built into this Bill a requirement that CBF must present their report within a specific time and I would say that four months should be the maximum time from the end of the year to which the report applies.

I also believe that there are certain new borrowing powers which are being given to CBF under the legislation. These are contained in section 17. It is important that borrowing should only be undertaken by a State-sponsored body such as CBF to finance activities which are themselves intrinsically self-financing, that is, profit making or break even types of activities. It is not right for a State body to borrow to finance activities for which it expects to receive a grant from the State. In effect that involves holding a gun to the head of the State, because if they go ahead and do something with borrowed money they can then come back to the State demanding the money to repay the bank for what they have done. We would then have a situation where the revenue being raised by the Minister for Finance is being more or less earmarked in advance by a body outside this House. There should be a clear provision built into this Bill that while CBF should be free to borrow they should only be free to borrow in respect of activities which are of themselves self-financing.

There should be an entirely separate accounting procedure and a separate fund established for the financing of self-financing activities in respect of which borrowings could be undertaken and another fund established for State-financed activities in respect of which borrowings should not be capable of being undertaken. That is an important distinction in public finance which should be made. There is unfortunately a situation where more and more bodies are being given the power to borrow even though they are not self-financing bodies, and that is not desirable. I can well see the point in allowing State-sponsored bodies which are self-financing to borrow but not bodies which are largely or wholly financed by the State.

In section 20 there is a reference to the disclosure of interest in any contract which the board proposes to make by a member of the board who might be interested in that contract. The protections there are insufficient. I do not want to get into specifics here but there is a possibility that members of the board may be people who are engaged in the meat industry themselves. For instance, the chairman of the board could be involved in the meat industry. As members of the meat industry they naturally would have an interest in making sure that they made the largest profit for their own enterprise and they will naturally try to make use of any information they can get to find new markets.

I believe that any information CBF have about new markets should be given out on an entirely even-handed basis to all members of the industry. There should be no one who would have any greater access to this sort of information than any other member of the industry, whether he be a member of the board or not. There must be statutory safeguards, and I intend to propose amendments on Committee Stage to prevent any member of the board, whether he be the chairman or otherwise, from getting information from the CBF which would be commercially useful to him in advance of any other person in the industry. I know that it would be very difficult indeed to operate such a protection, because ideas and so on will come up in the course of discussions at board meetings where information of this sort can become available. However, I am sure the Minister will understand that, if one person is in a position to get that sort of information while other members of the same industry who are in competition with that person feel that they are not getting that information, there would be problems in the maintenance of a trusting relationship between the industry as a whole and CBF.

The Minister must, if he wants to have appointed to the board people directly involved in the trade, provide a means of ensuring that those people do not have any privileged access to information. I agree with the Minister that people who have experience in the industry and are directly involved in it should be on the board and I do not want to be construed as saying that I am opposed to such people being on the board. But, if they are, there must be some method of ensuring that they do not or cannot make use of their position on the board in a way not open to people who are not on the board. I do not belive that the terms of section 20 are sufficient to ensure that because they only extend to a declaration of interest in an existing contract which may be the subject of activity of the board. I am not so much concerned about existing contracts but I am concerned about the possibility of future contracts which might arise in the case of one person who has, by virtue of membership of the board, earlier access to information that other people in the same industry with whom he is competing and on whose products a levy is being raised to finance CBF. If that were to happen it would not be fair and I would like to see safeguards built into this legislation to prevent it happening.

I am not saying that this is happening because obviously nobody would know if it was but, as I said, the possibility exists when people on the board are involved in the trade. The provisions of the Bill should be extended to ensure that this possibility does not or cannot arise.

The board are being given a new function: to provide for the exportation, either as principal or agent, of beef. Up to now they were allowed to engage only in the promotion of beef, not in the actual export of the product. If they are to export they must be able to buy and sell, because presumably they will export on their own account. Nowhere are the board actually given the power to buy or sell beef, although they have the power to export. In case this matter might be challenged at a later stage, it should be written into the legislation that the board have power to buy and sell beef.

The board have been given the new power to engage in trading in beef only "to such extent and to such markets as the Minister may from time to time direct". That is far too vague and seems to be giving the Minister too much power. He will allow them to engage in trading in one market but not in another. For instance, they might be allowed to trade in a market where one Irish producer was already engaged but not in another market where another Irish producer was engaged simply by the Minister saying "You may export to country A because I am not too worried about the Irish producer there, but you may not export to country B because you might damage an existing Irish factory there."

In his speech the Minister said, "I want to make it clear that I do not see CBF going into competition with our existing exporters—quite the contrary in fact." That is his word contained in his introductory speech, but that will not be the law of the land. The law of the land will be that they may export "to such extent and to such markets as the Minister may from time to time direct", without any limitation as to whether they may compete with other Irish producers or whether the Minister may exercise this function in a discriminatory fashion. The criteria whereby the Minister may or may not allow them to sell in competition with private Irish exporters in given markets should be written into the law. The Minister should not be given the discriminatory power to say, "You may export to Fiji but you may not export to Samoa." The conditions under which the Minister may exercise his discretion to allow CBF to export to a particular market should be written into this legislation. It is not good enough for the Minister to say that it is not his intention that they should be in competition with other Irish producers because as the law stands there is no statutory requirement that this would take place.

I am also critical of the method of appointment of the board, which will be by rotation with one-third of the membership retiring each year. It is not a good idea to have somebody retiring from a board each year because one would never get the spirit of collegiality that is needed on a board. The board should be able to plan for the following five years in the hope that if they do a good job they will be reappointed. I realise the rotation system is to get an infusion of new blood on the board every year, but that is a trendy idea and I do not think it will have that effect. The Minister would be better off if he changed this Bill and appointed the board en bloc for five years. I hope he will consider that view carefully.

Perhaps the Minister would give some information about the beef classification scheme. Last year we provided on a statutory basis for the establishment of this classification scheme. At that time I was critical of that scheme because the classification scheme on which Irish beef would be sold abroad did not and could not coincide with the type of classification scheme whereby French beef was being sold. We were trying to export on the continental market in competition with the French, but our beef was not being classified on the same basis. If we had the same classification scheme, a person buying our beef could make a quick and easy comparison between the Irish beef and the same class of the French beef. It seems unusual that there should be a series of different national classification schemes in use on the same European markets. How has this scheme been working? Has the Minister considered altering the means by which the different classifications are set?

I understand from a report on beef carried out by the Confederation of Irish Industry that one of the things needed to encourage greater trade in beef is the implementation of an internationally enforceable code of trading practice in beef and export credit guarantees for beef. Have the Department studied this matter and the extent of the problems being faced by the industry in the absence of any code of practice in the beef trade on international markets? Can he take any initiative internationally to have such a code established, because I presume there is a genuine need for it?

I referred earlier to the need for greater employment in the beef industry in the processing of beef products. We cannot make much progress unless we can ensure that our beef is processed to the furthest possible extent before it leaves our shores. There have been considerable improvements in this situation, particularly in the term of office of Deputy Clinton as Minister. In 1974 only about 24 per cent of our beef was denoted before it was sold in individual cuts and the rest was sold as whole carcases. There was an improvement in that situation throughout the period of the present Government. We should set a clear target for our industry by a particular date in the proportion of beef which should be denoted for export. The Government should commit themselves to achieving that half of our beef is exported in a deboned form by 1982. The more beef deboned the more employment there is for boners in the factories and for various people in the processing of the meat.

One of the problems we have been facing in ensuring greater processing of beef in this country has been the absence of any MCA on canned meat. An MCA has been made available on chilled beef but not on canned beef. I understand that the Minister has been engaged in discussions on this matter. I would have hoped that something would have been done in this situation.

Mr. Gibbons

It has been done.

Mr. Bruton

Well, perhaps the Minister would give us a report in his contribution of what has been done in this context.

The last point I want to make —perhaps the most important point of all—is that there will be no beef industry and no employment in the factories unless it is profitable for farmers to engage in beef production. At present it is very doubtful whether beef this summer is going to be profitable. The reason for this can be found in a number of factors. I will mention one—the fact that the price increase for beef this year has been very small, only 1.5 per cent increase granted by the EEC. At a time when costs of production are rising by 15 per cent we have had only a one-tenth increase in the prices paid for commodities sold in terms of the EEC guarantee.

We have had a very significant increase in interest rates. Of all commodities produced on the farm beef is one which requires very heavy investment and very heavy indebtedness on the part of the farmer. For a given level of output a farmer has to tie up much more money in much more stock to get a relatively small profit than he would have to in dairying, for instance, where a smaller number of cows worth less money in terms of their own value can produce in value terms a far larger amount of end produce in the form of milk than a much larger number of animals at a far higher price can produce in terms of net profit when the beef comes to be sold. Therefore, a much higher level of indebtedness is required to engage in beef production than is required in milk production. Much more again is required in milk production than in grain production where all you have to buy and carry from the beginning of one season to another is the price of fertiliser and seeds. It is not necessary to go very much into debt in order to engage in profitable grain production. Beef is hit much harder than any other form of agricultural production by an increase in interest rates, and the Minister knows that there has been a very significant in crease in bank interest rates in the recent past.

I ask the Minister to look very carefully at the figures for the likely profitability of beef this year. If confidence is destroyed and if profitability is not maintained at the end of this year people will not invest in more cattle afterwards. If farmers get a bad burning in the autumn this year, if they lose money on the beef, they will switch for next season to grain or to something else and we will not have even the amount of beef being supplied at the moment, insufficient as it is, supplied to our factories. Definite action is needed by the Minister to restore confidence in the beef industry.

A lot of people here had hoped that from recent price negotiations in Brussels the Minister would come back with some system of calf heifer scheme which would have led to the increased production of calves for beef. He has failed and that has not come about. In his reply the Minister should give an account of why he failed to get this calf heifer scheme. That possibility for restoring confidence in the beef industry has been removed.

I say in all seriousness, with some personal knowledge and with more knowledge derived from others close to me who know more about the industry than I do, that there is a serious confidence problem in the beef industry at the moment and the Minister must do something about it or else this Bill and the CBF which we are talking about will be just another expensive superstructure in an industry which will not be existing in the meaningful sense. We will not be able to achieve all the very optimistic targets for CBF if the beef itself is not produced. One thing the Minister can and should do—and I ask him very seriously to consider this—to restore confidence in the beef industry is to have beef exempted from the 2 per cent levy. That could be achieved quite easily without any serious loss of revenue if in the case of beef the Minister would revert to not retaining the VAT refund. Quite a small financial cost would be incurred but a very important symbolic gain would be achieved which would have significant effects in restoring the battered confidence of people in the beef industry. I am making this submission to the Minister because I believe this is financially and politically feasible. The loss in revenue of such a measure would not be significant if the VAT refund were not to be retained in the case of beef, but the effect on improved confidence in the beef industry of removing the 2 per cent from beef would be very significant indeed. As Deputy Clinton pointed out here in a previous debate, at the moment that 2 per cent is absorbing not 2 per cent but up to 25 per cent of the net profit of people in the beef industry.

I have already pointed out that because of prices not rising while costs and interest rates rise, profit has been squeezed to almost miniscule proportions and the 2 per cent levy on top of that can represent up to 50 per cent of net profit. We may well have a situation at the end of this year where people will be selling beef at a loss. If this happens it will be very difficult to get them back into beef production the following year. They may have made silage and in that case they will have to stay in beef and use up the silage for that winter, but they will make arrangements if they can get into grain the following year. People are already switching from beef to grain and the value of grain to our economy is not as good as the value of beef in terms of potential added value in the meat factories. The effects on our entire economy could be quite severe.

I have put forward the most feasible action which the Minister can take to restore confidence in the beef industry and I would ask him to put the case as strongly as possible to the Minister for Finance. I am not making this point out of any wish to embarrass him or his colleagues politically. I believe something like this is necessary to restore confidence in the immediate future. Glorious ideas of what we might do in five or ten years' time are of little value if confidence cannot be immediately restored. The Minister knows this is the case. We are facing a serious situation requiring exceptional remedies.

I welcome the Bill, though I believe certain aspects need to be reformed, particularly in relation to potential conflicts of interest which can exist in the case of members of the board and also in relation to other matters which I have mentioned. The Bill lays the foundation for development of the beef industry in the years ahead but much more important is that action should be taken by the Minister now to restore confidence and to ensure that beef will be produced which can be sold by CBF in the future.

Mr. Bermingham

I welcome this Bill. CBF were financed chiefly by public money and there were no statutory powers governing them. This Bill goes a long way towards meeting that requirement. There are, however, a few points on which I take issue.

Section 4 states that the function of the board shall be to develop, promote, facilitate, encourage, co-ordinate and assist the export of livestock and meat. While I know that livestock will be exported on the hoof for a long time to come, I feel the emphasis should be on the export of meat. There has been some falling off in employment in meat factories in recent times and I understand the Minister is doing what he can to keep one big meat producer in business. It appears that priority may be given to the export of livestock but in my opinion the board should promote our beef.

In Europe and elsewhere Irish beef commands a very poor rate in comparison with beef from other countries and I do not understand the reason for this. I find Irish beef a lot more palatable than foreign meat. Perhaps we are not producing the kind of meat demanded in continental markets and we should examine this matter. Fianna Fáil made the far-reaching statement in their manifesto that we would process all our food. I know it is not possible to do this overnight but I believe proper efforts are not being made to produce the kind of article our customer needs. This board should encourage that kind of activity. If we cannot produce the kind of beef required, we should develop alternative markets for our produce. I have travelled in many countries and Irish beef is the best I have tasted. However, it is not highly thought of and commands a lower price than beef produced in other European countries. That is something with which we should be coming to grips, something with which we must come to grips, if we mean to expand our beef industry in the way we should.

If the emphasis here is to export livestock in the same way as meat, we are on the wrong track. If this meat has to be processed in some other country—we sell it as livestock when, naturally it has to be sold there—and we should be in there selling that meat and processing it here. It may not be possible to do that completely but certainly we should be gaining ground continously on that differential. Our eventual target should be that set out in the Fianna Fáil manifesto, that we process all our food because the additional value and employment in that field is of vital importance to our economy at present.

In his opening remarks the Minister specified how the membership of the Board would be compiled. He said:

As regards membership of the Board, it is difficult to give fair and reasonable representation to all interested groups....

I accept that; it is difficult, because there will be many groups interested in being represented on this board. I note there will be three representing farmers, two representing meat factories, one representing live exporters, one representing butchers, one officer of the Department of Agriculture and two people nominated by the Minister, one of whom would be chairman. There should be trade union members on this board, representing workers in the meat factories and the meat industry generally. Perhaps that is what the Minister has in mind when he says there will be two representing meat factories but I would imagine what he means is two representatives from the management side of the meat factories. On a board of this nature there should be representatives of the people employed in the meat industry. I suppose they would amount to 4,000 or 5,000 anyway. There are 1,000 directly employed in the meat processing industry in my constituency. Those people should be represented on that board in some way, whether it be directly or through the trade unions.

I firmly believe that all our meat should be processed but that is something that cannot happen overnight. The emphasis should be on developing, promoting, facilitating, encouraging, co-ordinating and assisting in the export of processed meat, and of livestock if that must continue, and it must for some time. It was clearly stated in the Fianna Fáil manifesto that we would process all our food. Yet nothing is being done to further that aim, and I am not foolish enough to imagine that that is something that can be done overnight. However, some progress should be made in that direction and this board used to explore the possibilities of achieving that goal.

It appears that our meat, when exported and processed abroad is more saleable. We export the livestock and it is processed wherever it has been exported. It seems to command a better market and, in a lot of cases, a better price than that processed at home. I do not know whether that means we export our best cattle. For example, does it mean that we are exporting the type of livestock that foreign processors want? However, we must ask ourselves if we were processing such meat at home would we be capable of competing with the highest prices obtaining on the European market. From such inquiries as I made abroad it would seem that we are not doing that.

This board should be engaged principally in the promotion of our meat industry. It would appear that we shall have to continue to export live cattle for some time. However, I have not seen any evidence of the statement in the Fianna Fáil manifesto—that we will process all of our food—being implemented. Serious consideration should be given to the role of this board in promoting beef more than the export of livestock.

Mr. Callanan

In his excellent contribution Deputy Bruton referred to people producing cattle in the west. I welcome the Bill, its teeth, and the fact that it is setting up a statutory body. I shall have some brief comment to make on the constitution of the board.

Probably everybody is aware of the problems obtaining here in regard to beef production, to which Deputy Bruton made reference also. The Chair may think I am being somewhat irrelevant but Deputy Bruton spoke for over an hour. Everything he said was relevant but could also be said to be irrelevant, if one wanted to make that contention.

This country is unique in that cattle are produced in one part—in my part —and finished in another, the eastern part. This board is set up to sell beef and live cattle. That pattern is changing but very slowly. However, as Deputy Bruton has said, there is need for a lot more silage, sufficient to arrest the glut of cattle at the end of the year which pushes the load on to the factories, both in regard to storage and disposal, at that time. On smaller farms in the west it is important to take cattle off grass altogether during the winter. Big improvements have been made in that direction. Most farmers are now taking two cuttings of silage off their small farms. But there is a lot more to the making of silage and the equipment needed for that purpose. For example, there is the building of the yards, which is important. It has been a complete failure where it has just been made in a heap in a field. To my way of thinking that method is out. It was tried all over the country. It has been discovered that it makes muck out of the whole area and silage cannot be kept if one has not the means for so doing. Therefore taking a decision to have silage for the production of beef which, if one is to sell, this board——

An Leas-Cheann Comhairle

It is very difficult for the Chair.

Mr. Callanan

That is very relevant, Sir.

An Leas-Cheann Comhairle

The Chair does not want to interrupt the Deputy but the making of silage is hardly a function of the board. However, I shall hear the point.

Mr. Callanan

Beef certainly is.

Mr. Bruton

One cannot have one without the other.

An Leas-Cheann Comhairle

I know, but the functions of the board have nothing to do with silage.

Mr. Callanan

But there is no point in having a board if there is no beef to sell. That is the point I am making. That was the reason for my reference to silage, the production of silage in the west, changing a system obtaining for years under which we produced young cattle and were unable to finish them because we had not the relevant means. We are now endeavouring to winter-feed cattle which is important, as Deputy Bruton said, so that there are not what we call grass-fed cattle coming off imposing on the factories a load which would not be there if we could balance it over the year as a whole.

In relation to silage, unless one has the yard from which to feed the silage this cannot be done. These yards cost a huge amount of money and we in the west are not getting the grants which are given to development farmers to erect this type of buildings. The estimates which the departmental inspectors submit for these buildings are completely unrealistic, and if one is entitled to a 30 per cent grant, by the time the building is erected one is lucky to get about 20 per cent of the actual cost. It is only since we entered the EEC that the farmers in the west have been able to make any move towards developing this type of feeding so that they can take their livestock off the land in the winter. Something should be done about the grants and the unrealistic estimates. This relates to the whole production of beef and to the switch from live exports to meat exports. Until we have this type of set-up in the west we will have to produce and sell small cattle at a loss to be finished in the east.

I am disappointed that an EEC incentive to beef production did not come this year. Costs are very high and beef production is not very profitable. People are inclined to produce milk, a commodity which is over-produced at the moment. It is vital that every effort be made to encourage people to balance meat production over the whole year. This can only be done by increasing the making of silage and by increasing the grants to have yards built from which silage can be fed.

Section 20 of the Bill refers to the power of the board to export. Will the Minister clarify what is meant by that? If the board get an opportunity to export beef to a country to which no Irish exporter exports, can the board buy beef for export? It is not stated in the Bill whether the board have power to buy as well as power to export.

Mr. Bruton

That is what they have in mind.

Mr. Callanan

Have the board power to buy and export as well? I would like to be clear on that.

I disagree slightly with the constitution of the board. The board are to be a board of ten, but only three members of the board will be directly elected by farmers. The board will comprise two representatives of the Minister, who could be either trade unionists, which I do not object to, or farmers. There will be three representatives of the producers of bovine animal and sheep, two persons representing the meat export trade, one person representing meat traders and one person who shall represent the live bovine animal and sheep export trade. Only three persons are directly elected from farmers. Any board dealing with farm produce should have a majority of producers on the board. I was a member of a State board for a number of years and I know that it is inevitable to have clashes between the ordinary members and the producers. I would ask the Minister to have another look at the constitution of the board with a view to increasing farmer representation on it.

In relation to retirement, it is only right that each member should retire at the end of the year and give an account of his stewardship, but they should be eligible for re-election. It would be a crime if a man who had proved himself on the board had to quit just because of a rule. The board are very important and I hope they do a good job. It is important that the Government finance a statutory body like this board. I welcome the Bill. It is important that the Government inspect the finances of these boards periodically to monitor their activities. If we vote money to a board we should be in a position to see what they are doing with it.

I compliment the outgoing CBF on what they have done in relation to the export of cattle. Deputy Bruton said that the consumption of beef here had gone down but that it is rising in other European countries. Therefore it is important that we have a board which will look at all the markets so as to keep this trade viable here.

It would take very little more to pull the people out of beef production, particularly people now gearing themselves towards the production of beef by changing a system which existed for years, a system which does not exist in any other EEC country, that is, the unique situation where we produce cattle at one end of the country and finish it at the other end. We are doing our best to change it but for financial reasons it will take a long time to do it.

Mr. Griffin

I, like the other speakers, welcome this Bill, but with certain reservations. This is an opportune time to give the CBF statutory functions especially now that we have entered a new era with our membership of the EEC. When CBF Teoranta were founded in 1969 our entry to the EEC was imminent. The whole scene has changed radically since then. I compliment CBF Teoranta on their work in beef promotion in the knowledge that they were limited financially and had only certain powers.

Though I have some reservations about the Bill, I commend the Minister for introducing it. My reservations relate to the introduction of this further levy. An essential element for the success of the Bill or for the success of any Bill relating to agriculture is the confidence of the farming community, but unfortunately the confidence of the farmers is being eroded. This Bill cannot be treated in isolation. We must consider it in the context of the other legislation pertaining to agriculture that is going through the House this week. Each of the three agriculture Bills being dealt with this week imposes a levy on the farming community. Farmers have approached me, as I am sure they have approached the Minister too, to express their anxiety regarding the attitude the Government are adopting towards the farming community. Farmers have got the impression that there must be a special levy section in the Department who have thought up all these various levies and who recently decided on the removal of subsidies on cheese, lime and foodstuffs. The farmers are of the opinion that the Government are being selective in singling them out for this treatment and that there is a certain amount of farmer bashing in these closing days of this session of the Dáil.

The functions of the board as outlined in section 4 are to develop, promote, facilitate, encourage, co-ordinate and assist the export of livestock and meat. I would suggest that the first action of the board on meeting would be to insist that the levies being imposed by the Minister be removed. In their reports the Livestock Exporters Association express concern that, for instance, the livestock cattle trade with the UK is at a standstill and the exporters fear that the cattle levy will ruin the trade. They are concerned, too, that the introduction of this further levy of 50p per live animal to fund the activities of the board will be another disincentive to farmers and will do irreparable damage to the beef export trade. The Minister must have regard to the views of the farming organisations because these are the people who are concerned and we must have their confidence if the legislation is to be effective.

There is a good deal of merit in the Bill. I consider it essential that it be passed because, in terms of the great potential there is for us on the European scene, we must bring to bear all our resources, our expertise and our experience in order to derive the most from the EEC not alone for the farming community but for all our people whether they be rural or urban dwellers. It is imperative that there be not a shred of suspicion in the minds of the producers regarding the intentions of the Government.

I, too, consider membership of the board to be too limited. For a board like this we should be able to avail of the best expertise and knowledge of individuals and groups. Consequently, I would suggest that the proposed number be increased to 20 or even to 24 so that the board might be representative of advertising agencies and of trade unions as well as incorporating people who have had experience on the Continent, who have been involved on the Continent in the promotion of tourism and in other promotional affairs on our behalf.

In addition I consider the term of office of members of the board to be too short. Instead of appointing members for one year we should appoint them, initially at any rate, for a period of three years because it would take almost a year for a member to become au fait with the intentions and the responsibilities concerned. Appointment for a minimum of three years at the outset would give both individual members and the board as a whole a chance to get off the ground.

Subsection (4) of section 7 is rather ambiguous and I should hope that the Minister, when replying, would clarify the situation in that regard.

Section 10 provides that the Minister may remove a member from the board at any time. In fairness both to a member who might be so removed and to the Minister there should be laid down specific reasons for such action. It is totally unfair to leave the situation as it is.

The second function of the board will be to develop, promote, facilitate, encourage and co-ordinate increased consumption of beef on the home market. As the Minister will know, the price of meat, aided and abetted by the introduction of these further levies, has become dearer and this has resulted in a decline in consumption. It appears that this trend will continue. To encourage the consumption of more meat, I suggest that the Minister should remove the levies because they will ultimately be paid by the consumer.

The Minister did not take too kindly to my remarks on the previous Bill. Perhaps he is over-sensitive to criticism but he must be told the truth. We are not alone in our criticism of the Minister and of the Government. At the moment there is a crisis in the farming community. They are concerned with the attitude of the Government towards agriculture. After a long hard winter and a late spring——

An Leas-Cheann Comhairle

The Deputy is getting away from the Bill. We cannot discuss the former Bill.

Mr. Griffin

I am trying to bring to the attention of the Minister the difficulties facing beef producers. They feel that a 1.5 per cent increase will not meet their rising costs. This year inflation is expected to be 12 to 15 per cent. Feedstuffs have increased by £4 per ton. Diesel and labour costs have increased. The result of all these increased costs is that their profits have dwindled. Like other business people, farmers are in beef production to make profits. If the Minister wants the Bill to be a success he must get the support of the farming organisations. I have been approached by various farming organisations on this matter. The Minister should re-assure the farmers that there is no anti-farming lobby in the Government. If they are given encouragement the beef producers will help to make the Bill a success.

The membership of the Board should be increased to include people with expertise in marketing to help capture the British and continental markets. I wish the new board success and compliment the outgoing board. I am glad that the Minister has ensured that the staff of CBF will continue in employment.

To try to improve the performance of the export side of the industry the IDA retained a well-known firm of accountants and consultants who produced a report on the beef processing industry. That was to show the guidelines for Government investment, the potential for marketing and the added value products that could be derived from the industry. That report has never been fully implemented. There were very positive recommendations in it and very general statements also about what could and should be achieved. There has been an updating of that report because it was completed at a time when there were anomalies in numbers and when the industry was going through that period which I referred to earlier. I feel that fragmentation in this way will not see the beef industry progressing on a planned co-ordinated policy.

We now have a semi-State organisation getting Government funds, which is very desirable; it will certainly improve on the tremendous performance with very limited resources up to now. But I feel that those people in CBF who will want the co-operation of the beef processors should also have a much greater say in what beef processor gets Government aid for investment in his plant, and aid should be directed towards the companies who are prepared to assist in the marketing drive and who are prepared to give a full commitment to maximising the products which require a certain amount of extra investment and additional staff and who have a commitment to the long-term benefit of this industry. It is important that we look a little wider and bring together the Government agencies who have a hand in the meat processing industry and are responsible for agricultural and veterinary responsibilities and now the marketing but not for the investment. There is an area there that the Minister might take into account.

We have something over £400 million of a turnover in this industry. It is crucial and it needs the full attention of the Minister for Agriculture in addressing the problems that presently exist. It is ridiculous that we have had so much Government investment in an industry and now we have no cattle to put through these plants. We have certainly made the money available over a number of years and it is ridiculous in a country like ours that we should now end up with no cattle to put through plants. There are inefficiencies, a loss of employment and an uncertainty in this industry at the moment which are very damaging and very bad for the overall economy. The IDA have recently revised their targets as a result of that report which I referred to earlier and they are projecting, over the next ten years, 1,200 jobs in more intensive processing. CBF have been consulted on those figures and agree with them and will be a party to the implementation of same.

I will conclude by welcoming the Bill and welcoming the extra responsibilities given to a semi-State organisation who fully deserve the confidence placed in them based on their track record in very trying times. I hope that they get the full support of the processing industry and I would urge the industry itself to come forward and be much more co-ordinated and to plan for the long term. We have a situation where the co-operative movement in particular must speak with forked tongues; they are representing the farmers on the one hand and on the other hand they are trying to maximise the performance of the co-operative organisations in the processing industry. The farmers are the ones that export live cattle and they also invest in meat processing; there is a difference of marketing policy there; they are the same men who make up the shareholders in the beef processing plants. I would urge that they should have a greater commitment to their own co-operatives and support them in trying times. I know the commercial pressure on the individual farmer is going to be to maximise his intake based on wherever the best prices prevail.

The meat factories came in for considerable criticism during that period when they did very well financially. They did very well financially because the so-called live exporters were not available to take up the product in the market place. They left maximum numbers to the factories which had to contend with a tremendous overflow of cattle at the time. Admittedly they made profits but in the main they reinvested them in the industry. But it was the live cattle exporters who were the root cause of the problem and this has not been mentioned forcibly enough. I would like to put it on the record of the House that when there was adequate cattle and a bad market, the live exporters were not available. For anyone to say that we need the relief of live export is to avoid facing the real situation. Let us get to the situation where our meat plants can have adequate numbers and let us have live exports as well, but let us not have a situation where exports prevail and meat factories are in a run-down situation and are not maximising their throughput.

I compliment the Minister on introducing this Bill. It is a move in the right direction. But there is a lot more ground to be made up and a lot more power to be given to CBF in Government investment as well as marketing.

Mr. Clinton

I am glad to see my colleague in west County Dublin taking an interest in this Bill because both he and I are aware of the difficulties which exist. However, I would suggest that there are gaps here and there in his knowledge which he would be well advised to take a look at. There also appears to be quite a conflict between what he has to say and what the present Minister for Agriculture has to say about the need for a live export trade as well as a processing trade.

The Deputy is not quite right in the reason he gave as to why bad prices were paid by the processors during a period of over supply. The position was that we had half the present capacity at that time. There was restricted capacity in the processing business and therefore there was no competition between processors. The boot is on the other foot now. There is double the capacity that existed then and there is a good deal of competition and greater possibility, even between processors, that there would be competition.

When Minister for Agriculture I made a considerable effort to bring about the type of development proposed and envisaged in this Bill. I had numerous meetings with the parties concerned and failed to get agreement between them on the sort of development that should take place. We have a Bill here today and the Minister has failed to get agreement. He rightly paid a compliment to the contribution made by the CBF as they now stand. I, too, agree and would like to compliment CBF because they made a very substantial contribution to the development of our beef and livestock trade, to exports generally and to promotion work throughout the world. Without CBF there would be a serious deficiency.

This Bill gives CBF a marketing arm. I am apprehensive about the fact that there is not agreement between the parties concerned and from whom these levies will be collected. Nobody likes the sound of "levy". As Minister I sought a contribution from all the parties mentioned here and, while some were agreeable, others were not.

I fear we have a Bill before us that is premature and difficulties are likely to arise because of this failure to get agreement. We saw what happened in the European Court about the Pigs and Bacon Commission levy. I know it is the intention of the live trade, who are opposing this Bill, to bring their case to the European Court. The Minister would be very wise if he decided at this stage to postpone this Bill. It can remain in the House, but there is not any great urgency about it at this stage. It is very important that agreement should be got from all sides on the way this should be developed. That agreement has not been secured. It is likely that it will give rise to a very serious problem and will be challenged in the European Court. The Minister should look very seriously at this and consider whether it is wise to proceed at this point. I see the desirability of this type of development, but if one pushes too hard one can fail completely. If this is brought to the European Court and the case succeeds, our chances of developing this type of organisation with a selling arm is gone for all time. If it is not a compulsory levy, if the contribution is agreed by the various parties, no such difficulty arises. I hope the Minister takes a serious look at this.

Under this Bill the Minister seeks to retain too much power to himself. If a Minister sets up a board to do a particular job and that board are fully representative of all the interests concerned, he has a responsibility to show his confidence in the board by giving them the maximum freedom to operate and do the job they were set up to do. If the board are fully representative I do not see any situation in which they will go completely off the rails and cause greater trouble. There is no point in setting up a board who have to go cap in hand to the Minister every week and say "Please can we do this, that or the other?" No business can be done in those circumstances. Semi-State bodies are established so that they will have freedom to operate like a commercial firm, not under the guidance, supervision and direction of a Minister who has too much to do to continuously observe every move that will be made and evaluate it. This is one aspect of the Bill to which I strongly object.

There is a need for a first-class board to go into the type of business described in this Bill but it must be a board in which all the people—producers, processors, live exporters and workers—must be interested and about which they are concerned. There is very serious concern at present about the fact that a large political element has been introduced into the existing CBF in the last two years. As Minister I either appointed or reappointed all the members of that board, even those I knew to be strong supporters of Fianna Fáil. I never had any reason to regret doing that. I appointed or reappointed them because I knew they had a worth-while contribution to make and I am satisfied they made a worth-while contribution. Not all of them are there now but I made the right decision.

I will begin at the end because I happened to hear on the monitor some part of Deputy Clinton's appalling contribution. He was making accusations against me and against other unnamed people whom in his cowardly way he refused to name. He was making unsubstantiated and unsubstantiatable accusations of political corruption and matters of that kind. Deputy Clinton and the party that he represents are the epitome of political corruption. I recall to Deputy Clinton's mind the unprecedented outburst of political corruption that took place in the dying days of the last National Coalition and the loading up of the Land Commission, the High Court bench, and all Government boards with political nominees of one kind or another including defeated Deputies of this House. Let him not come in here and make these unsubstantiatable, wild charges against me or any other unnamed people, because they mean nothing. If they do mean anything he should have the gumption and the guts to say what they mean.

I cannot see how the introduction of this Bill should be the occasion for such an extraordinary outburst from Deputy Clinton. He cites his own nomination of the old board of the CBF, but there are other cases that he might well cite, including An Foras Talúntais and the now defunct NAA, some of whose members nominated by Deputy Clinton were nominated also to numerous other boards for some completely untraceable reason. I did not imagine that a person who had until comparatively recently been the occupant of the Department of Agriculture as Minister would descend to such extraordinary outbursts of vituperation as we have seen from Deputy Clinton today. I cannot understand it. I suggest to him that if he has any accusation of the smallest kind to make against me or anybody else he should make it in the open. If he had not the courage to make it here with the protection of the House it is doubly unlikely that he would make it outside. It is in sharp contrast to the contribution made by his colleague, the Fine Gael spokesman on Agriculture, who welcomed the Bill and made many general observations about the undoubted problems of the meat industry at present, including the problem of supply.

We have dealt with this on other occasions in the recent past but the problem remains. The matter was touched on by other Deputies, as was the necessity for the flattening out of the annual hump in the supply position in factories. This is easily recognisable and must be considered in the context of the traditional means of producing beef. This traditional custom must be radically altered in the very near future if we are to break out of the impasse of the three-year cycle for cattle production and the problem of the traditional movement of store cattle from the west over to grazing country for a leisurely process of conversion into beef over three years or more. In modern competitive conditions that will not do any more.

Deputy Bermingham asked if the product we are selling is the product which consumers in Britain and Europe really want. This product is undeniably good, and we can do a great deal to make it better and more to the liking of consumers in export markets. It has been the custom for many years for British family butchers to market good quality beef, wherever it comes from, under the general name of Scottish beef or Devon beef. There is a need for the Irish meat industry to establish its own identity, and I hope that will be the business of the new board.

The problems of winter feeding and the making of more silage are simply contributory factors to the general question of our need to improve cattle husbandry. At our present stage of development there is a great deal of progress to be made in this regard, but the conditions for making that progress have, on the whole, never been better. It is true that the difficulties of the beef producer as distinct from the keeper of store cattle are particularly bad in a short supply position such as obtains at present and the profitability of an operation is obviously correspondingly low. The reason is that the beef producer who traditionally bought stores has had to pay prices that were so high that they precluded any reasonable degree of profit in the expensive business of fattening of the beef stage. It is true that within the cattle industry the problems of beef production and beef finishing are acute. It must be the business of the Government, the Department of Agriculture and the industry generally to apply themselves to corrective measures.

Mr. Bruton

Has the Minister anything specific in mind?

Mr. Gibbons

I had in mind the introduction of an improved calf rearing scheme and had the expressed goodwill of Commissioner Gundelach towards the recommending of this to the Council of Ministers. In the event of the decision of the Council of Ministers at their price-fixing meeting to raise the price of the coresponsibility levy, which circumstances we welcomed, the Commissioner said he was not in funds to provide any assistance for the scheme the Irish Government had put up, of which he approved and was willing to recommend to the Council. He went on to say that the scheme was by no means abandoned, and that when the funds become available he will recommend it to the Council for reconsideration.

Mr. Bruton

The Minister will realise that something will have to be done very soon about the profitability of this year's summer beef.

Mr. Gibbons

I am fully aware of the current difficulty in the beef production area of cattle rearing. Deputy Bruton entered the caveat about the spending of public money and pushing beef in the home market. The provisions of the Bill make this technically possible, but I do not believe this will be seen as the main or even an important purpose of the Bill. Obviously the main purpose is to perfect our methods of marketing beef for export. I share Deputy Bermingham's opinion that the more we process our own meat the more the country as a whole will earn from it, including the producers. Some very important steps have been taken towards this end, and I will deal with that later on.

Deputy Bruton mentioned GATT imports from the APC countries and from New Zealand, Australia and possibly Canada. He did not believe it was in our overall interest to make too big a fuss about these importations, and that there were other importations to the Community such as young beef from Yugoslavia into Italy. There are also importations into Germany of Polish and Hungarian store cattle on the basis of its being a trade of long standing which has become traditional. It is also a source of the tightening of competition for Irish beef. I do not thing we should seek the solution to our marketing problems in the pointing out of the difficulties there are in a competitive market. Our biggest problem is to become competitive ourselves, and we should devote more of our energies in that direction. I am confident that the CBF will be a great help towards that end.

Deputy Bruton mentioned AFT as an example of the difficulties encountered in presenting annual reports, said that there is general slowness and used the comparison with private companies. I do not think AFT or indeed CBF—such widespread operations as one or other of them controls—would be physically capable of rounding up the necessary data for an annual report within any closely confined time. In this regard I would have no anxiety about the words used in the Bill—that the report be presented as soon as may be—nor would I seek to constrict the quality of the report by the imposition of unreasonable statutory limits. We must be prepared to accept that the board that will be established will approach the job in a serious way. Indeed several other boards have the same provision and, in practice, encounter no difficulty in having to report within a reasonable time.

Has the Minister taken account of the Court decision in the Pigs and Bacon Commission case?

Mr. Gibbons

Yes, there is no parallel. The anticipated activities of the CBF will not be comparable to the imposition of the levy by the Pigs and Bacon Commission. Pilot marketing operations are envisaged, possibly in North Africa or in some other Third Countries.

Deputy Griffin did not have anything very constructive to say—he rarely has—but he lamented the size of the board because he envisaged a board of 20 or 25. Anybody with any experience of boards would know that a board of that size would be quite helpless. The Deputy did not advert to the fact that the board can appoint advisory committees who need not be members of the board. That might get over that difficulty of Deputy Griffin's. The rest of Deputy Griffin's contribution was something in the nature of a dirge and was of no noticeable value.

Deputy Bermingham was anxious about the general difficulty of the quality of the Irish product. Irish meat does not always fetch a smaller price than competitors', and where it does it is undoubtedly a reflection of the quality. In this regard the quality classification scheme should be of decided help.

Deputy Bruton raised a question as to the declaration of interest by the members of the board. Under section 20 a member must make a disclosure of interest if he is involved in any contract which the board proposes and under section 21 he may not disclose the nature of the business of the board to anybody else. It would not be possible to provide that somebody could not use knowledge he got now to help him in some future contract. There is only his disclosure of interest and his sense of honour. No constraint or handcuff ought to be put on to members and they are not necessary.

Mr. Bruton

Would the Minister agree that there is a problem where someone on a board is in the business and can get information in advance of everybody else. There is a potential problem there.

Mr. Gibbons

A person who would consciously use his position on the board for the accumulation of knowledge for the purpose of his own business as against that of anybody else, would be acting in a dishonourable way and surely he would be unwise not to make a declaration of interest under the Bill, if he has an interest of that kind.

If the board are to depart from the Government's apron strings it is necessary that they have reasonable freedom in relation to borrowing. They must have reasonable operational freedom in order to operate commercially on the market. Such borrowing powers should not give rise to any difficulty in this case just as they have not given rise to any difficulty in the case of many similar boards. However, that is a matter that we might discuss in more detail on Committee Stage.

On the question of Yugoslav and other Eastern European imports of store cattle into the Community, we have always resisted the annual licensing of those imports by the Italians and by others on the basis that they militate against Community producers of cattle. Deputy Clinton, too, followed this line as Minister. However, the possibility of the elimination of those licences is unlikely but the repetition of our opposition to them is useful in that it helps to keep the situation within manageable bounds and averts the possibility of the creation of another beef mountain such as that experienced in 1973 but which had been accumulating perhaps during 1972.

Some of the contributions to the debate have been very helpful and constructive but there were some that cannot be so described. However, I thank all those Deputies who contributed.

Question put and agreed to.

Committee Stage ordered for Tuesday, 10 July 1979.

Dáil Éireann díospóireacht - Wednesday, 4 Jul 1979

Córas Beostoic agus Feola Bill, 1979: Second Stage (Resumed).

Dáil Éireann díospóireacht -
Wednesday, 4 Jul 1979