Thank you for allowing me to raise this very important matter which was brought to my attention by many people in farming and its business side. The takeover of Halls by Irish Agricultural Wholesale Society was brought about by the Stock Exchange as a result of a bid by the company and successfully convincing the shareholders and the patrons of Halls that they were in line for a takeover. It now means that there will be a monopoly in the importation of feedstuffs.
I should like to thank the Minister of State, Deputy Leyden, for coming in to reply to this debate, and the Fair Trade Commission who met a deputation in the last few days. The Fair Trade Commission were prepared to listen to all views expressed by a number of people who approached me because of their concern. Monopoly in the market of imported feed ingredients is the major problem here; 80 per cent of the industry, in terms of importation, will be controlled by the new merger which will raise many question marks about the feed import business. There will be a problem in regard to quality and the source of ingredients. The main ingredients involved at present are protein and cereal imports to make up the shortfall at home.
A major change will take place at farm level because of new technology, a breakthrough in mixing and milling and changes in all other spheres of activity in industry. At present farmers have greater resources at their disposal, such as new machinery, and they are now in a position to mix and mill. It is vitally important that the source of ingredients is not closed to them. Quite recently, a number of people told me that they had to buy through a third party such as a merchant or co-operative. These people used to be able to buy in volume and were given favourable terms and conditions. They also need a choice of ingredients which will not be available if there is a monopoly. Farming has become very sophisticated and there has been criticism of the feeds given to animals which can cause problems in regard to the finished product. Farmers should have a choice in buying ingredients.
If farmers cannot purchase directly from the importer there will be an added cost on the production of our livestock, which we cannot afford. We cannot have an island monopoly and this is where the real problem lies — as we face into 1992. Halls and the Irish Agricultural Wholesale Society could have 80 per cent of the market which would be quite dangerous. The position is quite different in Denmark, Holland and Germany.
It has been said that we must have licensed compounders in the animal feed industry. However, the licensing is necessary to protect the consumer, on whose behalf I raised this matter. The farmer is the primary producer and he could now do this job himself because of new technology. However, in relation to costs, he would be at the wrong end of the scale by about £10 per tonne, which is not acceptable to the people I represent. The value of agricultural output in 1989 amounted to about £3.3 million and the cost of feed imports — compounds and "straights"— was an estimated £550 million, the equivalent of 20 per cent of a total output.
The intensive livestock sector feed ingredients are approximately 75 per cent over the farm gate value. Our agricultural exports were valued at about £3.41 million in 1989. I am talking specifically about the pig industry. Competitive costs for feedstuffs are crucial vis-á-vis our main competitors. In 1989, 2.4 million tonnes at a cost of £425 million was added to the cost of home produced cereals and “straights”. That meant that the cost of home produced cereals amounted to £135 million. A further breakdown revealed that cattle meal came to 1.4 million tonnes and about 500,000 tonnes in regard to pigs.
Poultry is a very important sector which also depends on the importation of ingredients. Many Members, especially on the Opposition benches, have made speeches about the sheep industry and the problems associated with it. Horses and other animals are also affected. You can see the importance of the importation of feedstuffs. In 1987 — the last year for which I have figures — Halls imported about 60 per cent of the total feed requirements of the country. The IAWS were a smaller importer made up mainly of the co-operative movement. They were the main shareholders until it became a plc company and went on the market. They have broadened their base which further changed the scene. There has been a lot of talk here recently about levelling the playing field. Halls are a traditional firm in the import business and have been recognised for many years as being a reputable and influential company in the feed business.
I have a stake in the pig breeders and that is why I was called upon to try to defend the situation. People are very concerned about the monopoly resulting from the merger. Only about 20 per cent is left, made up of a number of people. One group import 15 per cent.
The major problem that will arise is control at the port of entry. The two companies I refer to, IAWS and Halls have the monopoly of the port of Cork, the main importing facility there. I understand they have New Ross, Waterford and Dublin and a concern in the North, in Belfast, known as Barnetts, part of the Halls operation. With those amalgamated into one company, the business is at risk. Some of my people have been told in the last few days that in the new circumstances they will have to purchase through third parties. That is not acceptable.
I want from the Minister tonight an assurance that safeguards will be written through the Fair Trade Commission into any agreement or compromise reached so that the people who want to purchase feed are free to do so through that now importing company without hindrance or having to go through any third party.
