Deputy Wilson has sought and has been given permission to raise on the Adjournment of the House the question of Bailieboro Co-operative Society and the financial institutions and grant institutions.
Adjournment Debate. - Bailieboro Co-operative Society.
I thank you, Sir, for providing me with this opportunity to raise this very important matter of the financing of Bailieboro Co-operative Society. Also I want to register my complaint that, despite the terms that I used when requesting this Adjournment Debate, that I wanted to make a request to the financial institutions, private and of the State, the Minister for Finance is not here, nor is the Minister for Industry, Trade, Commerce and Tourism. The Minister of State has been sent in. I submit to you, Sir, that this is too important a matter for the economy of a large part of the country to be treated in that fashion.
This is a very savage blow to the area which I and many others in this House represent. Bailieboro Co-operative Society headquarters are located in the county of Tom Finlay, a pioneering cooperator, and where Horace Plunkett and George Russell pioneered the work of the co-operative society. For that reason it is an even more severe blow than it would be in other circumstances. What is wrong at the moment is that there is a cash flow crisis and all that area, which includes my county, part of County Monaghan, part of County Meath, County Louth, part of County Kildare, part of County Dublin and the whole of County Cavan east of a line from Cootehill to Granard, is affected by this crisis. This co-operative society is a multifaceted one where the basic dairy industry is carrying on and where an engineering facility which has been profitable has been exporting to as far away as the Middle East. It is the place that pioneered Emmets Cream which has been a profitable and very successful venture in the agri-business. It is the place where Bailie Foods and Feta cheese were developed.
Admittedly, there have been hiccups in that area, where the liquid milk industry was expanded and from which Owens Dairies come into Dublin. There are retail sales in various towns in the area at several locations. There was a project for mushrooms and their development with input into the small farming community. In all there are about 5,000 members of this co-operative society and the basic strength of the co-operative has been the dairying industry. The Bailieboro group employment directly is 650 people plus. As well as that, the House will know that hundreds of people depend upon its activities and enterprise for a livelihood. I leave it to the economists to calculate exactly the spin-off effect all these industries have in that area. The suppliers are basic and important. The spin-off is important and, of course, the whole board of the organisation are now very worried and perturbed.
The enterprise is roughly in the £90 million per annum category and it has been raised to that by vision, commitment and hard work. For that reason a special obligation lies on the Minister for Finance and on Fóir Teoranta to see to it that this organisation is kept viable and working.
This Adjournment Debate is on a non-county and non-party basis. We have Deputy O'Hanlon and Deputy Leonard here form my constituency. Deputy Hilliard has asked me to express his concern. Deputy John Farrelly who is a member of the co-operative has also asked me to express his concern to the House. I have mentioned Cavan, Meath, Louth, Westmeath, Kildare and Dublin, all areas involved in this. The chief executive of that enterprise is a man called Mr. O'Brien. He is a man of vision and drive and is highly responsible. There is nothing gimmicky about him.
It might be as well to leave names out.
The chief executive of the Bailieboro group is a man of vision, enterprise and drive, with the basic philosophy which the original members of the co-operative movement had. There have been criticisms of that movement to the effect that they lost the initial philosophy and drive, but in him was incorporated that basic drive to serve the community and to serve it well.
I should like to call attention to the basic soundness of this society. They have about 5,000 members altogether, I gather. Those 5,000 members at £500 each could put up £2.5 million to help the co-operative over this hump, and the financial institutions should bear that in mind. Some of the members would not be able to afford £1,000 but some would be able to afford more. If you had £1,000 on average you would have £5 million available there to the society for their development, and that has not been kept in mind by the people who have been sitting in judgment on the operations of the co-operative over the past few days. I take this opportunity to call on the members of the co-operative to stand firm, coherent and united. There is nothing they cannot do if they remain united and committed to the objective of preservation. They owe that not merely to themselves but to the whole community, which is a trans-county, trans-party community, as I have stated. The potential is tremendous and the vision must not be allowed to go. Nothing can put the co-operative down; nothing can put them out, if they remain united and committed.
Many times in this House I and many other members, particularly from this side of the House but also from every side, have commented on the economic problems that arise from the fact that we have a man made boundary which nobody wanted quite near us. That puts an extra strain on our economy. For that reason we are more vulnerable when institutions such as the Bailieboro Co-operative Society are in danger. This should also be borne in mind by the Minister for Finance and by Fóir Teoranta when they are considering what they will do to get Bailieboro Co-operative Society over what is only a temporary difficulty, I submit, and any sane person examining the situation would have to agree. That being so, Fóir Teoranta should pay special attention to the context in which these occurrences have taken place. Not merely have this society developed the trouble, but they have impacted on another important company owned by hard-working people. Because their activities have become temporarily intermeshed, that company have been put into liquidation. I am painting that picture to indicate to the House the seriousness of the problem.
The chief executive of Bailieboro Co-operative Society has tendered his resignation saying, and I quote: "Financial institutions had lost confidence in its management." If this is so, there is something wrong with the financial institutions not with the chief executive. I want fearlessly to put that on the record of this house. It raises the whole question of the attitude of financial institutions to entrepreneurs whose whole commitment is to development. It looks as if this word "development" has become a dirty word in the minds and philosophy of the economists at present. It is a sad state of affairs if we have reached that point. Development is what is needed in a country which has the youngest population in Europe and that is almost a cliché now in this House, in the writings of our economic and social research people and of all who are commenting on the present population structure. If we do not provide development and encourage those who are providing it, we are failing in our duty as elected representatives and the Government are failing in their duty as the ruling organ of the country.
I am not making a party political speech here; I am making a cri de coeur for the Bailieboro Co-operative Society and for proper consideration of its claims to be maintained and sustained fully as it is at present by Fóir Teoranta and by our financial institutions. I put it to the House that if, as reported, a consortium of businessmen can see their way to do what the financial institutions refuse to do, then that is scandalous in the face of rising unemployment and rising emigration. The efforts and vision of the Bailieboro Co-operative Society led by their chief executive deserve recognition and support from this House.
At one time in our economic history, Frank Aiken made a suggestion which was condemned at the time for its radicalism. The suggestion was simply that the banks and financial institutions should be forced to make available money for development at a fixed and low rate of interest. That sounds as radical today as it did at that time, but the financial institutions and banks should keep this particularly in mind — they have a scared obligation to the community from which they mainly make their profits. They should not be in a position to sit in judgment on important groups such as the Bailieboro Co-operative who carry with them the hopes and livelihoods of so many of our citizens.
I want to give the House the brief of Fóir Teoranta and again I stress my disappointment that the Minister for Finance did not come into the House to give his views on this very important matter. The main function of Fóir Teoranta is to provide assistance for industrial concerns which may be in danger of having to close down or suspend activities because of inability to raise necessary capital from commercial sources. The commercial sources have their obligations — I am saying that out bluntly. They have their obligations to those who are their customers and from whom they make their money. Every second house has been paying them bridging finance at exorbitant rates. They have been making very substantial profits and when they made management blunders they came back to this House for support. They have an obligation to the taxpayer and to the community to see to it that worthwhile ventures are not let go to the wall.
Fóir Teoranta have an obligation to come in where necessary capital cannot be raised from commercial sources. They say that such concerns, however, must be basically sound and capable, if necessary with reorganisation, of becoming profitable. My brief to this House is that the concerns about which we are talking are basically sound. They are very solidly based on the co-operative movement. There may be some need for reorganisation, but I do not think there is radical need for this. The philosophy of development is simply embedded in that co-operative society and consequently I am calling on the Minister for Finance to make a statement tonight that Fóir Teoranta will not allow any damage to be done to the Bailieboro Co-operative Society. As I wish to give some of my time to Deputy O'Hanlon I shall conclude.
First, I should like to support everything that my colleague, Deputy Wilson, has said. This threat to Bailieboro Co-operative Society is of major concern. It involves three Departments of State, not just the Department of Industry, Trade, Commerce and Tourism and the Department of Finance, but the Department of Agriculture, also. We in this House in the national interest, must, support the co-operative movement because of what it has done in the development of rural Ireland, for the small farmers who are the suppliers to the co-operatives, and for the industries associated with them. Bailieboro Co-operative have had major development in recent years, something of which we in our area, A Cheann Comhairle, can be justly proud. They have gone into Emmet Liqueurs and found a large successful market in the United States. They have become involved in light engineering, in the equestrian centre and many other diversifications.
A matter of great concern to me is the speed with which Fóir Teoranta react when there is a crisis. I ask if at times Fóir Teoranta and the financial institutions play off against each other. I am not referring in this to Bailieboro Co-operative Society because I do not know enough about what is happening there. I am concerned that this play off against each other might cause delay to the detriment of the particular industry they are trying to assist and I ask the Minister to look into this. The financial institutions must see if they have any social conscience at all or if they are purely motivated by high profits. I draw attention to the speed with which banks draw in their money in situations in which a business is strictly very sound but may have temporary cash flow problems. That matter has to be looked at at some stage because not alone is Bailieboro Co-operative in difficulty but another major concern in our constituency had a liquidator appointed last week. It is my belief that the speed with which the banks moved in that instance is something that should concern us. As Deputy Wilson said, that firm, through hard work and endeavour, built up an extensive business throughout the midland and northern counties. That firm has found itself in difficulty because of a cash flow problem.
I should like to ask the three Departments involved to get together to discuss this issue and ensure that Bailieboro Co-operative continues for the benefit of the workers, the farmers and the people in the community it serves.
I am prepared to grant Deputy Farrelly two minutes of my time.
I should like to thank the Minister of State for giving me the opportunity to contribute to this debate. I should like to be associated with the remarks of my colleagues on the Opposition benches. I understand that I am the only Member who is a shareholder of Bailieboro Co-operative. I appeal to the Minister of State to tell the Minister for Finance and Fóir Teoranta that by tomorrow there must be a decision. We cannot allow this to continue much longer because it will destroy the commitment of the milk suppliers and the creditors. I do not think it should take two-and-a-half weeks for an investigation and a further two-and-a-half weeks before a final decision is reached. If a decision is not made soon there will not be a co-operative. That is the stark reality facing us and it is the message we are anxious to pass on to the Minister of State. The farmers in the area have stood by the co-operative over the years and I have no doubt that their commitment in the future will ensure its survival in future years.
I am grateful to the Members for their constructive contributions and I share their concern for the future of Bailieboro Co-op. I am aware of the difficulties being experienced by Bailieboro Co-op and I have been monitoring developments closely. As the difficulties of the co-op appear to be of a financial nature not requiring grant assistance the Industrial Development Authority are not directly involved in trying to assist the co-op to overcome its difficulties. I am aware that the co-op has made an approach to Fóir Teoranta for financial assistance and I should like to give the House an outline of developments in this regard over the last couple of weeks.
On 27 January Fóir Teoranta received an urgent request from the Bailieboro Co-op group for financial assistance. An immediate decision, at the insistence of the group's bankers, was required. The board of Fóir Teoranta on 29 January decided to provide interim funds to meet the immediate pressing needs of the group. The amount was approved and subsequently paid. I mention that because I am anxious to stress that there was no delay on the part of Fóir Teoranta in coming to the immediate assistance of the group.
The Minister of State did not mention a figure for 29 January.
I would prefer not to. The board took the interim measure to facilitate a fuller assessment of the group's longer term prospects so that an early decision could be reached on their overall financial needs. On assessing the financial position in greater detail Fóir Teoranta's assessment revealed a substantially higher deficit than they previously believed to be the case. Due to incomplete information it was not possible to determine the full extent of the financial needs of the group in order to enable it to continue in operation.
On the basis of this information the board of Fóir Teoranta met on 7 February and decided that a more in-depth assessment was needed before funds could be given to the group and this decision was conveyed accordingly. I must point out that Fóir Teoranta have a statutory responsibility when providing funds to any company or co-op. The criterion, which is well known to Members of the House, is that the company or the co-op concerned must show that it has a viable future. The Irish Co-operative Organisation Society subsequently became involved in negotiations in the matter. The outcome of these was a proposal which was put to Fóir Teoranta and the company's bankers. I am pleased to note that over the weekend, under the aegis of the ICOS, a very high powered group of experienced advisers got together and it is my belief that they will assist the co-op in no small way.
Negotiations with Fóir Teoranta and the banks are continuing. Further meetings have been arranged for tomorrow morning. Deputy Wilson stressed the role of Fóir Teoranta but I must point out that in relation to the co-op's banking position there are ten banks involved in financing the group.
They should be able to put it together.
That is what we are trying to do. The Deputy should stop flying around the place and permit me to reply. I am trying to be helpful to the Deputy.
I will not be talked out of this. The Minister should listen to Deputy Farrelly and stop waffling.
I have listened to Deputy Wilson without interruption and he should permit me to reply.
The Minister should be allowed to reply.
The position is complex. I will continue to monitor developments closely. I must express a hope that the outcome of negotiations will be successful. With the goodwill of all involved a satisfactory outcome can emerge. There is a need for goodwill on all sides. In relation to the proposals being put to Fóir Teoranta and the banks I should add that basically they are of a three-fold nature, the strengthening of the co-op's management structure, a rationalisation of its operations——
What does that mean?
Seeing that the Deputy is an eminent scholar I am sure he is able to follow English.
More bullshit.
I wonder if that comment is in order. The third measure is that there should be a financial package designed to put the group's finances on a solid basis. Those three important items will be addressed by Fóir Teoranta and the banks involved. It is hoped that the proposals will result in securing the future of the co-op and in doing so will secure the future for the benefit of the shareholders, the milk suppliers and protect the future employment of the workforce of 650 in the group. I should like to reiterate what was said by Deputies Wilson, O'Hanlon and Farrelly, that there is a need for calm. I am optimistic that a favourable outcome can be negotiated. I was interested to hear Deputy Wilson mention that a consortium of businessmen were involved. There may be a commitment needed all round, including a commitment by the shareholders. I am hopeful that tomorrow's meeting will result in a solution to the group's difficult problems. Fóir Teoranta will, as they have in many cases, play a responsible part. I hope the banks will realise that they too have a responsibility. I am hopeful that tomorrow's meeting will reach a conclusion that will be to the benefit of the co-op.
The Dáil adjourned at 9 p.m. until 10.30 a.m. on Wednesday, 12 February 1986.