Seanad Éireann díospóireacht -
Wednesday, 15 Jun 1932

Vol. 15 No. 17

Public Business. - Dairy Produce (Price Stabilisation) Bill, 1932—Second Stage.

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

Minister for Agriculture (Dr. Ryan)

As I regard this as a rather important Bill, and as members of the Seanad, I am sure, will require to know what are the various reasons why the Bill has been brought forward, I should like to go into some little explanation of the causes. I would ask the House to go back to 1930 or before 1930. For seven or eight years prior to 1930 the price of butter in this country was fairly stable. It was never below the price of 160/- per cwt., and the price of milk as supplied to the creameries was never below 6d. per gallon. At the end of the year 1929, prices began to fall and the average price for 1930 was 126/- per cwt., for butter and 4.9 pence per gallon for milk. In 1931 things got worse. Butter was sold at an average price of 115/- per cwt. and the creameries paid 4.3 pence per gallon for milk. When we took over the Government one of the first problems that was put to us was the threatened collapse of the whole dairying industry if prices were to continue falling as they had been falling during the last two years. When we were preparing this Bill we got the prices that were paid for the first three months of this year. We had no butter exports during the first three months—there was a tariff on the import of butter to this country—so that we could not get an idea of what our butter would be worth on the world market. We took however the price of Danish butter and we found that Danish butter on the British market was 10/- per cwt. lower than it was for the corresponding three months of 1931. We therefore came to the conclusion that things would probably be worse this year than last year.

We find that we have been borne out so far in that. At the present time I believe that the price of butter in the British market is from 20/- to 22/- —it varies from day to day—lower than it was during the same period last year. There were other factors that we had to take account of. Up to the end of last year, Denmark, which is our biggest competitor in the British market, had an alternative market in Germany, and the Danes were able sometimes to withdraw from the British market when prices were going down, and put their butter on to the German market, and in that way they were able to get a better price in the British market than they would get if they were altogether confined to that market. But Germany has put on a tariff of 56/- per cwt.—it may be higher after a certain quantity has been imported—and that means really that the Danes and the people of the North European countries are practically compelled to put all their butter into the British market this year, and as long as the German tariff lasts. That means that there will be more European butter for the British market than it had up to this. The imports of New Zealand and Australian butter into the British market are increasing very rapidly. The increase in the Australian imports last year in the British market were more than double the exports from this country. That gives an idea of the volume that these two countries—Australia and New Zealand—are now putting on the British market, and it is with New Zealand and Australian butter that our butter is compared. To give a further idea of the remarkable increase in imports to the British market, in 1928 there were 6,121,000 cwts. brought into the British market, and in 1931 there were 7,850,000 cwts., so that there was an increase of over 1,700,000 cwts. It would look as if the 1928 import was the amount that the British consumers could pay at the high price of 160/-. When the imports into Great Britain increased above that, the prices went down. Imports are increasing rapidly from year to year, so that there would appear to be very little hope of an improvement in the world prices until one of those big suppliers such as Denmark, New Zealand, Australia or some other of those countries come to think that it is uneconomic to produce butter in such quantities. And even here at home we find that the price had an adverse effect. We get returns from our creameries here of their output, and we find that the output of our own creameries in 1931 had gone down from 700,000 cwts. to 605,000 cwts. That is a very big decline in the quantity that was being produced. We have not got very exact figures for the output of the factories, but the factories assure us that their business has been declining. For them however we have not got the figures, except for 1926 and 1929.

We drew up this Bill in the end of March, and we forecast an average export price of 105/- per cwt. for the year, and it was on that figure that we more or less built this Bill. But I am sorry to say that we were over-optimistic in that figure. The price of Irish creamery butter has been back for some three or four weeks from 93/- to 98/-. And even at 98/-, and suppose that we had not introduced this Bill and suppose that we could have maintained 98/- as the export price for our butter, that would mean a price of 3.3 pence per gallon for the milk. It is very difficult to know what the cost of the production of milk is to the farmer, but indirectly we can reach it. We believe that it was not an economic proposition to produce milk last year for 4.3 pence, or in the previous year for 4.9 pence, because we feel that if it was economic for farmers to produce milk at that price, the output of the creameries would not have declined. There was no other business—pig rearing or any other kind of business in farming—that the farmer could have taken up during the last two years that would have been very profitable. So that I think we may take it in this way: that the production of milk would be undertaken by them if they could make it pay at all, and we may clearly come to the conclusion that the price of 4.3 pence or 4.9 pence is not economic. A Commission on agriculture was set up here in 1922 and that is the last occasion on which figures were given by experts, and at that time it was stated that the cost of production of milk in 1914 was 5.62 pence per gallon. Taking 5.62 pence and even allowing a certain amount for the skim milk which is returned, I think we must get the farmer fivepence, or almost fivepence, a gallon in order to keep him in production.

The dairying industry, as Senators know, is one of our basic industries. We get the milk and the butter required for home consumption, and we get a certain amount of butter and cream and other milk products for export from that industry. And not only is that so, but the biggest single industry that we have in this country is the cattle industry, and that also depends upon dairying. We also have depending upon the dairying industry, to a large extent, pigs and poultry, so that we feel that if we do not make an attempt to see that the present number of cows is maintained in the country we shall have not only a less output of butter and milk but the number of our cattle, pigs and poultry will also go down. And that is why we are making an attempt, by means of this Bill, to save that industry.

We are anxious, as Senators know, to build up industries in this country, but we feel that it would be very foolish to allow a big industry like this to fail while we turned our eyes to the building up of other industries. We must at least save the industries that we have. I feel that in order to save these industries, we must induce those who are in them to remain in them by giving them the cost of production. We may be anxious to see that the labourer gets a living wage, and we must also see that the producer gets his cost of production. I may mention that in 1930-31 a tariff was introduced on butter of 4d. per lb. If our dairying industry had been properly organised at that time—perhaps that is too much to expect—but if it had been perfectly organised and if all the producers of butter in this country had combined amongst themselves and said: "We are going to take advantage of this tariff and see that no butter is sold at home in this country less than 4d. per lb. over the world price," they could have done and would have done what this Bill seeks to do. We are endeavouring to find a means to give the dairying industry the benefit of that 4d. per lb that was put on by way of a tariff.

The objection to this Bill comes from the point of view of the consumer. We are compelled of course to sell our butter or any similar product in the British market or any other market that we may find, at world prices. We cannot possibly introduce any legislation which will improve that position; and the only thing that we can do is to ask our own consumers here at home to pay more for what they are going to consume. This is an unfortunate thing but we cannot help it. I should like to say, however, that the consumer even though he is being asked to pay more as the result of this Bill than he otherwise would have paid, is not going to be asked to pay more than he has been accustomed to pay for many years back. From 1915 to 1929, a period of 14 years, the consumer only got butter in this country at the price of 1s. 8d. per lb., and even during the last few years with the low prices that ruled the world, the consumer in this country paid 1s. 7d. per lb. in the winter months for his butter, and 1s. 3d. in the summer months, giving an average for the whole year of somewhere about 1s. 4d. per lb. Under this Bill it cannot be more than 1s. 5d., and it can only be 1s. 5d. when the export price of butter is 105s. per cwt. When the export price goes below 105s., adding whatever it is to the bounty of 37s. 4d. will fix the price of the butter here.

Mr. Johnson

What section is this?

Dr. Ryan

I could not point to any particular section, but it is the general outline of the scheme. I will come to the sections in a few minutes. Supposing the export price is 95/-, as it was a few days ago, then the exporter of butter knows that he can get 95/- in the British market and he will have the bounty of 37/4 as well. Adding these two figures gives 132/-, and he will, of course, sell his butter here in Dublin at the same price of 132/. So that really the export price plus 37/4 is the price here at home as long as the export price is 105/- or less. I should like to draw the attention of the Seanad to this point, which they may not gather from the Bill by reading it—that if the export price goes above 105/- we reduce the bounty so as to give a mean price to the creameries of 123/-, that is the mean between 105/- and 105/- plus 37/-, as long as the export price is 105/- or more. I feel that it is difficult to make myself clear on this matter. What I want to make clear is this: that the price of 1/5 to the consumer is the maximum price, and that that maximum price should only rule while the butter is being exported at 105/-. If the butter is exported below 105/- the price to the consumer at home should be less until the export price comes to 123/-, and then this Bill is inoperative.

The pool is made up in this way: we collect a levy on the butter produced. If we take the example of the creameries, that is the simpler method of showing how it is worked. We get reports from the creameries in reference to the production and all that sort of thing. They pay in a levy as soon as the month is up on the amount of the butter produced for the month at the rate of 2d. per lb., and that goes into the pool. The creamery that exports butter will be entitled to 4d. per lb. as a bounty on the amount exported out of that pool. That means that there is a net gain to the creamery of 2d. per lb. on every lb. produced; and 2d. per lb. gain to the creamery means that it can pay .85d. more to the producer of the milk than it could otherwise pay. There would also be a pool for factory butter. In the same way we intend to get returns from the factories and we collect from the factories 2d. on every lb. that is brought in by the factory and that is put into the factory pool, but whereas the export of creamery butter is about half the total output, and on that account we give a 4d. bounty with a 2d. levy; the export of factory butter is about 90 per cent., practically, of the total of the butter pool in the factory, so that the bounty is much less for the factory—probably 2½d.—and the levy is 2d. There will be a third pool for farmers' butter called the miscellaneous pool. That is practically an unknown quantity for the present, because the people who deal in farmers' butter are not all registered. We do not know what the quantity may be that passes into the wholesalers' hands in the case of farmers' butter, and we find it very hard to calculate for the present what it amounts to.

We have a provision in the Bill that the bounty on farmers' butter will not be more than the bounty on factory butter, because we feel it might be unfair to the factories to have any advantage given to the farmers' butter in this particular item. But it is only experience that will tell us what that particular appeal will amount to. Will there be a levy on farmers' butter? There will under certain circumstances where it passes on to the wholesaler or a person dealing in farmers' butter in a big way, which we have still to fight. Having arranged the pools, I say, of course, that the amounts of 2d. and 4d. on the creamery butter are provisional; they hold until we find that the proportion of exports, say, is not the same as we had expected, and the bounty may have to be varied in some cases, but they hold for the present.

Having decided on these three pools, the next thing we have to think of is this, that there will be no inducement to anybody to store butter for the winter. If the export price was 105/- and the bounty 37/-, that is 142/-, and if we are to insist on a further provision in the Bill that the maximum wholesale price of butter must not exceed 102/- at any time, we say there would be no necessity to store for the winter. We are anxious that we should not have to export butter during the winter, and we are anxious that the butter should be supplied by our own producers. There are various ways open to induce producers of butter to store for the winter. If the price were to remain as it is for the present, that is 130/- or 132/- on the home market, there would be an inducement to creameries to store, seeing that they would get 142/- during the winter. But if the price of exported butter goes up during the late summer, and goes up to 105/-, then the inducement will no longer be there and the creameries that had stored up to the present would be inclined to sell their butter straight off and not run the risk of storage costs and so on without getting some reward. It may be necessary, therefore, during the late summer, to vary the bounty so as to give an inducement to the people in the trade to store. It may also be necessary to use another provision in the Bill, and that is to make an order against the export of butter except under licence, but we feel that through those inducements, and even through the compulsion that may be necessary, we shall have enough butter here during the winter.

The next problem arises if we are driven to the point of prohibiting exports except under licence and we have compelled certain butter factors to store butter for the winter here. They may say to us: you are making us keep butter here for the winter that we could sell now at 140/- and we have no guarantee that you will not allow Australian and New Zealand butter in here during the winter and so put us to a certain loss. We have taken power under the Bill to restrict imports in order to save the people whom we have previously compelled to store. That is the reason we take power to restrict imports and exports, firstly to see that we have sufficient butter in the country for our own use during the winter and secondly to protect these people against any dumping of butter in the winter time. Up to this, people in the butter trade were entitled to take the risk of storing and had a fair prospect of making money by that storage. But we feel we may be asking them to take all the risks and not giving them the chance of making a large profit after taking that risk. On that account they are entitled to a certain amount of protection.

We also deal with milk products under this Bill. We propose to give a bounty on the export of cream, tinned cream, dried milk, and other milk products and these bounties for the present at any rate will be given on a basis corresponding to the butter fat contained. That is, the bounty will be the same as if they had turned that milk product into butter. It will be possible at any time to alter the bounty on any particular milk product. If we had any reason to fear that our people were turning to one particular product we might vary the bounty and see that there was not a stampede into that particular business. There is, of course, a very good trade between this country and Great Britain in fresh cream and we are not anxious that that trade should be interrupted. Still, it is necessary that there should be powers under the Bill to vary the bounty under any particular item in the milk products.

There is also the question of creameries that were built in the last three or four years. They were built under circumstances that were peculiar. During the years 1927 and 1928 there was a big movement in this country towards the establishment of creameries and it was given a very considerable amount of Government support. Farmers in areas in the country where creameries were not known before established them. They were built at a very high cost. At that particular time, the Government was particular about the structural requirements of these creameries, the machinery that was installed, the water supply, and so on, and the cost of building was very high. They did not take very long to pay back these costs with the good prices that were prevailing for milk at that time. But they came up against a bad period very quickly.

They could not possibly pay off any of the capital debt at the present time with the prices ruling, and even to pay the interest is very difficult. We feel we should give some advantage to these particular creameries provided they were new creameries established under the circumstances I have mention. They were in districts that were in competition with the home-made farmers' butter, and if they complied with the various conditions that were laid down they were put on a separate Schedule in the Bill, and the creameries under this Schedule will only be required to pay 25 per cent. of the amount paid by the creameries; for the following year they will pay 50 per cent., and for the third year they will pay 75 per cent.

There is one other question that arises very acutely under this Bill since it was introduced, and that is the question whether we have a preference in the Department of Agriculture for farmers' butter or creamery butter. We believe we have been fair in dealing with the farmers' butter as compared with the creamery butter. In the case of creamery butter, we start off with a levy of 2d. and a bounty of 4d. In that particular case, the supplier is also the consumer of the creamery butter, and the butter used in the creamery household is bought after he has paid his levy of 2d. per lb., so that any advantage to the creamery supplier is something less than 2d. per lb.

Sir John Keane

Would the Minister please draw a distinction between factory and farmers' butter? He seems to use the two expressions as if they were interchangeable.

Dr. Ryan

The factory butter, as explained in the Bill, is butter that is brought to a factory and becomes factory butter. Farmers' butter is neither creamery nor factory butter. The farmers' butter and the factory butter to a certain extent depend one on the other, for I take it the butter that is produced by farmers' in their own dairies is either sold as farmers' butter or becomes factory butter. About 150,000 or 160,000 cwts. go from the factory and somewhere about 40,000 to 60,000 cwts. are sold direct by the farmer to the consumer—either sold direct to the consumer or sold through a grocer; but, anyway, it does not come from a factory.

Now we believe that if we have artificially, under this Bill, increased the price to the consumer, the consumer, who is taking butter direct from the farmer or from a grocer, will pay the 4d. extra for his butter, so that the farmer who is supplying direct to the consumer gets the full advantage of 4d. per lb. without having to pay the levy at all. About one-quarter of the total output of farmers' butter goes to the consumer or the factory. On the other three-quarters out of the pool the factories would get ½d. extra more bounty than the levy they pay so that there is ½d. to the farmer on the butter that goes from the factory. That means they are not much worse off than the consumers when we take into account that the butter consumed in their own household is not subject to a levy at all. I do not know if there are any other principles arising out of this Bill that it would be proper to discuss on this stage. There are various points arising which will be discussed, I suggest, very much more properly on the Committee Stage because there are several parts and there are sections dealing with different points that can be taken on the Committee Stage, but I admit that it is a Bill that is very much involved. This is a Bill that is very difficult perhaps to understand. Certain things are suggested in this Bill that might appear unnecessary at first sight. I have to refer to the restrictions on imports and exports. I would expect that certain Senators would like to know why these provisions have been put in. I have explained them. There may be other provisions in this Bill that may appear at first sight to be unnecessary also and if I can be of any help at a later stage in explaining any of these matters I shall be only too happy to do so.

Mr. Dowdall

I think the House will agree with the Minister that this Bill is almost of necessity a very involved measure and one which it is difficult for people who are not fairly intimately conversant with the details, or engaged in the dairying industry, to understand. I am fairly convinced and I can say that the Department is fairly convinced that the reactions of the regulations in this Bill will be such as may possibly cause the Department and the Minister to look into the matter again even before the period named in the Bill is terminated.

It is almost certain that it will be necessary before 12 months to keep a very close eye on how the Bill works and to make modifications. Only one thing could justify this Bill, and that is that were it not for some such measure as this, I feel pretty well convinced there would be no dairying industry in this country within three or four years. Clearly the prices to which dairy produce has fallen within the past few years are such as would not pay for the cost of production to the men who are engaged on a seven day a week job in which they have a considerable amount of capital invested.

This Bill is very important from the point of view of the dairying industry of the country generally, because the bacon trade and the cattle trade depend so largely on the dairying industry. It will give the House some idea of the reductions in price when I state that the imports of butter into Great Britain last year were more than twice as much as the quantity imported in 1913. Clearly it is scarcely necessary to say that the purchasing power of the people of Great Britain has not increased in proportion in the meantime.

The Minister has tried to demonstrate that the Department has sought to act fairly between the creameries and the home butter and factory interests. I give him credit in this measure for trying to do so. I think he has tried to do so, but I have no hesitation in saying that up to just recently the determined policy of the Department—and a very silly and foolish policy it was—was to put the creamery interests above the interests of the home butter and factories. I will ask the Minister and his officials to look at the number of co-operative creameries that have gone into liquidation in the last 20 years, and I have no hesitation in saying that a larger percentage of them have gone into liquidation than has been the case in any other class of industry. Creameries have been put up in places where they have as much chance of success as if they were put up at the North Pole. Creameries have been put up in places where the cost of management and overhead charges are such, taken in connection with the small quantities of milk available, that they have no earthly chance of paying. Some of these creameries have been put on the Schedule just at present with a diminished levy to be gradually increased, and some of them may have a genuine claim to be subsidised in that manner. But a great many creameries have been established in this country, and I say deliberately that the sooner they can be put out of existence in the interests of the producers of milk the better. In that connection it would be well for the Department officials to see what they can do to help the producer of butter made in the home dairy; to help him to make a really good article; to make a clean article. If steps in this direction are taken our dairying industry will be substantially helped.

When I tell the House that over two-thirds of the creamery butter in this country is made in three counties, they will see how wide-spread the amount of butter not made in the creameries must be. The amount of home-made butter even now is larger than the amount of butter made in the creameries, so that more than half the butter made in the country is not made in the creameries.

Notwithstanding the assurances we got when a measure was going through here in connection with what is called redundant creameries and the subsequent establishment of a Disposals Board, within the last two years creameries have been permitted to be established within a few hundred yards of existing creameries, thus doubling the overhead charges on the milk suppliers. These possibly are in connection with co-operative creameries, but surely it is not a crime for a private person through private enterprise to establish a creamery? The creamery I have in mind is a private creamery, a creamery which has been established for years, and which was in a better position to give the farmers good prices because it had in association with it a number of grocery shops. Some clauses of the Bill deal with the restriction of exports. I must confess that I look on those clauses with very considerable misgiving.

Some years ago before the establishment of the Free State, and shortly after the War, the then Department of Agriculture took steps—I think it was under the Defence of the Realm Regulations—to prohibit the export of butter, which inflicted a loss amounting to close on £200,000 on a number of traders. I am not speaking now feelingly in this matter, because I did not suffer the loss of a penny piece. But I do know traders in Cork whose combined losses were over £200,000. These losses were caused by the ill-considered and perhaps illegal regulations put in under the Defence of the Realm Act. I know some traders who were affluent merchants at the time, but who are now walking about the streets of Cork, begging.

The Minister has given us some fairly substantial reasons for taking those powers. I do ask him, when he comes to exercise those powers, to walk very warily and to be really satisfied that there are grounds which are solid and substantial before he interferes with export. I am referring to a class of traders who never came within the ambit of the creamery industry. I am referring to the export of butter for the mercantile marine. This butter is exported in tins; it is packed in tins which are lined up with sawdust so as to preserve the butter against climatic conditions. Of course, that class of general packing in tins would be altogether too expensive for general regulations, but if that class of butter were prohibited from export it would involve a drastic loss on those engaged in it, while it would serve no useful purpose, because it is not really such high-class quality butter as would, be readily saleable in this country or in England at all.

I should like, if I may, to give the Department officials a hint in regard to one matter that has fallen from the Minister, and that is the amount of the bounty on dried milk; that bounty I understood to be regulated by the percentage of fat in the dried milk. Now, I am, I think, the first person in this country who sold dried milk in England. I was doing well with it, but it is only an industry for a certain season of the year; when the percentage of butter fat became very high in the dried milk the milk became rancid. The dried milk was not so saleable when the percentage of butter fat was high as when it contained a smaller percentage of fat.

When this Bill was going through the Dáil an amendment was inserted which caused the Minister to give a preference in regard to the bounty paid for butter marketed through what is called combined marketing. Two attempts have been made within my memory at combined marketing in this country. The last attempt was through the agency of the Irish Associated Creameries, and that failed after three years. I am pretty sure that if the prices realised for butter by the butter merchants had been published every year this Irish Associated Creamery organisation would have been wound up after the first twelve months.

A Committee presided over by the High Commissioner for Great Britain, Mr. Dulanty, on the failure of the Irish Associated Creamery project sat and took a good deal of evidence. That Committee published a report dealing with combined marketing and I would suggest to the Minister that in that report he has the skeleton of the only really practical project for marketing that I have ever seen. It will require some modification and some addition but the idea of trying to improvise a system of marketing to secure better prices straightaway would be just as reasonable as if a person tried to start a concern of the magnitude, ramifications and extensive distribution of Guinness's brewery. It is impossible to improvise a system in that way.

Our butter in the British market amounts on the whole to something between ten per cent and eleven per cent. of the total quantity of butter sold there. The purchasing interests in Great Britain are so organised that they could very easily leave our butter altogether out of account. A ten per cent. supply of butter will not affect the market materially and I think that it would be advisable in the interest of all the countries if the High Commissioner for this country, the High Commissioner for Australia and the High Commissioner for New Zealand concerted together to try to get something more nearly approximating to the cost of production by joint action. Certainly we here ourselves by any system of collective marketing will not be able to do it.

One man who takes an interest in this measure, but who is not very conversant with the details, asked me to ask the Minister how soon would the fund be available to the farmer after the levy has been paid? He thinks that is an important matter and I agree that the sooner the farming community see some of the practical results of this matter, the more kindly will they take to it.

Mr. Johnson

There is one principle in this Bill, and perhaps the most important, to which I can give hearty support. It is obviously the purpose of the Bill to give some sort of reasonable security to the producer that he will get a price that will recoup him for his costs of production. I take it that it is recognised that the butter producer is performing what is in fact a social function. The community calls on the butter producer to produce a certain article of food for the use of the people of this country, and, in addition, to produce an article which becomes a commodity for sale in an export market, the proceeds from which has to be used for the purchase of necessary or required imports, and that it is unreasonable to expect butter producers to perform that social economic function at a continuous loss. Therefore, it is proposed to take such steps as are set out, to give that producer a certain security. But, beyond that principle, I am inclined to criticise severely a good many of the other provisions. I doubt very much whether they are justifiable at all, except on the ground that it is an emergency, and, one would hope, an emergency that will not persist for even the three years for which this Bill is given a life.

It is proposed to give the butter producer a certain price. He is to get a bounty and one immediately asks how is that bounty to be raised? One would say that, if one is thinking of this bounty as a social security given to the individual producer, it should be raised in the way other services are provided for, that is to say, by general taxation. But in the wisdom of the Ministers, they have decided that this shall not be raised as other social services are pro vided for, but that the actual consumers of the butter shall pay an additional price for the purpose of provid ing this social security to the farmer. Now, the incidence of that cost is going to fall undoubtedly heavily on a section of the community least able to bear it, and it is a disproportionate charge on those who are dependent to so great an extent as they are on bread and butter for their daily diet. Therefore, I think that the incidence of the cost of this bounty falls too heavily on the poorer part of the community, whether farming consumers or working-class urban consumers. I suppose that 2 to 3lbs. of butter per family is not an excessive weekly allowance, and 8d. to 1s. per week of an additional tax placed on these consumers for the purpose of this service, falls too heavily, I think, on the people with small incomes.

One might perhaps be content, if one were quite sure that the Minister's promises were guaranteed to be observed in the working out of this Bill. He has told us that it is intended that the price to the consumer shall not exceed, on the average, throughout the year, 1/5 per lb. I take it that is a figure that has taken into account the normal retailing costs, but I cannot find in the Bill anything to guarantee that. I find that the Minister has power to fix prices, but I can find no figure of 105/- in one case, or 1/5 per Ib. in another case. I can find nothing except the assurance that the Minister has power to fix a price beyond which butter of a particular class may not be sold wholesale by the manufacturer or producer thereof. That is Section 46. I think it would be a very desirable amendment that the specific figure should be placed in the Bill so that the Minister would have a certain limitation placed on him, and that the consumer will have some guarantee that the promises of the Minister in this matter are assured of fulfilment. The Minister may be very earnest and honest in his intentions at this date, but, as so often had to be pointed out, Ministers may come and Ministers may go, and the present Minister will not go on for ever, and I do not think it is desirable that we should leave the Minister for Agriculture, whose obvious interest and purpose is to look after the interests particularly of the agriculturists, as the person who is going to be responsible for ensuring that the consumer shall have the guarantee of his 1/5 per lb. maximum.

I would hope that the Minister will either point out where that consumer's price is ensured in the Bill, or if it is not already in the Bill—and I cannot and it—that he will agree to an amendment which will give that assurance and guarantee to the consumer. I think there will not be any undue amount of complaint from the average consumer if there is such a guarantee, though it is undoubtedly true that when a housewife knows that the price of butter is 4d. per Ib. more in Dundalk, let us say, than it is in Newry, she will be inclined to chafe for a while, but it might well be explained, and, I think, probably would be expected.

The fact is that, after all, 1/5 per lb. is not in excess of what has been paid in recent years, and that the emergency is great and is necessary for the security of the dairying industry. While saying that, I think that the method of raising this fund ought not to have been by a levy on the consumer. But there is another point that I am disturbed about, especially after the speech of Senator Dowdall. The Bill shows no evidence that there is any intention on the part of the Minister in regard to guiding and directing or assisting in the guidance and direction of the future development of this butter trade. I am afraid that the laissez faire idea has not yet been eliminated from the Ministerial mind, notwithstanding their protestations against laissez faire, and notwithstanding that they have adopted a high protection policy. It is within the high protection policy that they appear to think that the laissez faire and free development and free competition policy shall prevail and continue, with all its evils, whatever advantages there may have been.

In this particular matter, there is a practical encouragement given to the various creameries who are exporting to sell one against the other in the English market, and, incidentally, also, in the Irish market, and to minimise the advantages they are getting out of the bounty, with the result, I suggest, that in a couple of years' time, it will be said that the bounty at present is insufficient, and that the levy will have to be increased, that the price in the English market is insufficient to recoup, while, as a matter of fact, a good deal of that low price in the English market will be due to undercutting of each other by rival creameries. While I note an addition to the Bill, due to an amendment in the Dáil, whereby the Minister has power to vary the rate of bounty to butter exporters by a central marketing organisation, that is the only evidence in the Bill that there is any such idea in the mind of the Minister that a central marketing organisation will be brought into existence, or will be encouraged to come into existence, or that any system at all for limiting the amount of internal competition amongst the creameries, and cut-throat competition by the creamery managers, is going to be introduced. If this practice is to continue, it does not seem to me that the creamery industry ought to get the kind of support that is being given. Unless they are prepared to advance some degree towards organising co-operatively their own industry, it is unwise, I think, for the State and the community to come along and say:

"We are going to help you; we are going to assist you, and we are going to recompense you, notwithstanding the fact that you are unwilling to help yourself, and continue your refusal to organise your external marketing."

I would certainly have liked that the period of life of this Bill should be limited, with a view to enforcing some organised marketing of the exportable quantity of butter, and that that would be held as a penalty for their continued refusal, because I see a real danger of continued undercutting and a consequent loss to the farmers. Following the recognition of that loss to the farmers I can see a further demand for an increased bounty and therefore an increased levy with a consequent increased price to the consumer. I shall not oppose the Second Reading but I hope that the House will be willing to put a guarantee in the Bill, if possible, that the price to the consumers will not be allowed to exceed the 1/5 about which the Minister has given us his assurances. I think that it is not sufficient protection for the consumer nor sufficient assurance to the public to have to rely, more or less, upon the Minister's promise of June, 1932, in respect to the Bill, which is to continue for three years.

Sir John Keane

I think the best indication we could have of the difficulties and dangers of this measure was Senator Johnson's comments upon it. The Bill itself is one tangle of regulations upon regulations but according to him it does not go far enough and if he had his way it would go much farther than the full measure of regulations it already involves. I ask the House to look at it from a different view and on general grounds to be exceedingly apprehensive and, if I might say so, unconvinced, by the whole principle outlined in this measure. Knowing what a sensitive organism commerce is and how even more sensitive it is when attached to the agricultural industry, it is disquieting to be told by the Minister that this is a complicated Bill and will have to be modified as time goes on. It may be necessary possibly, he says, to regulate imports or exports which are likely to vary the bounty and incidentally he does not go any deeper in examining the finance of that. Presumably, if the bounty and levies vary the whole structure is affected. I am exceedingly uneasy as to the sort of difficulty the farmer may find himself in and this is something that may not be doing right for the good of the State. The whole thing shows that it does not work and never has worked and that if all these attempts to regulate and to form these little separate pockets of national organisations that are brought to work go on, the tendency generally will be to collapse.

These are only general terms, but are quite legitimate criticisms of the general trend of this Bill. The belief seems to be that by complicated regulations you can save the industries of the country. If the industries are to be saved there is another way. It was wrong to do it at the expense of the butter consumer, and it could be done much more simply and fairly by the cow-testing associations. They do direct farmers to the organisation of their own business. Surely, it would have been possible in some way to grant out of the general taxes a direct bounty to farmers, of so much a gallon on milk coming within the purview of the cow-testing associations? That, I suggest is the right and straightforward way to do it, and any farmer who does not want to join can do without the bounty. That is being done everywhere to-day, and it is the right application for that class of pressure. It is far better than a complicated Bill such as this, which the Minister himself says is hard to explain and which leads to difficulties which anybody with the most elementary idea of economics, and at all alive to the impossibility of foreseeing where all this sort of regulation leads to, could have avoided.

The Minister tells us that it is impossible to ascertain the cost of production. There, again, I think the late Government are to blame mainly, because that point was emphasised by the Agricultural Commission in 1922. The ex-Minister told us from time to time that something was being done in that direction, and surely by now, certain more or less reliable figures as to the cost of production should be available? It ought not to cost very much to do it. You do require the co-operation of a few people rather interested in the subject. In Denmark, I daresay, it is done entirely by voluntary association of the farmers themselves and I think it is rather disquieting that the Department can give us no reliable guide as to the cost of milk production, when the former Minister said there was a skeleton organisation in existence for that purpose. I do not know what has happened to that organisation, but whatever happens to it it should not be scrapped.

I think the House should direct its attention to or should consider the unfair manner in which the provisions of this scheme are likely to work. They will chiefly benefit creameries where the balance of import for home consumption and export is about even. They will, as the Minister has shown himself, give very little advantage at all to the factory butter, the butter that is bought in markets— blended, in fact—because about 90 per cent. of that butter is exported and any single factory grouping cannot draw more out of the pool than it puts into the pool by means of their labour. According to the figures of a person prominent in the factory butter trade the benefit would only come to about ¼d. or ½d. per lb. The farmer who makes his butter at home would benefit completely to the extent of 4d. It may be almost impossible to organise any machinery by which a levy could be placed on him and he will get the whole advantage of the increased 4d. in the home market. Nobody knows what the reactions may be. It is quite conceivable that the farmers chiefly concerned with the cost of creamery charges and the overhead of creameries to which Senator Dowdall referred may drop out of the creamery business and make an increasing quantity of butter at home. Nobody wants that to happen. But it happens naturally. It seems to me exceedingly wrong that these things should happen by the operation of this sort of legislation the results of which cannot be foreseen.

The Minister, I noticed, was rather severe in his criticism of foreign dumping but what is sauce for the goose is also sauce for the gander and he must realise that in this matter we are dumpers ourselves and we cannot complain if other people give us, or may consider giving us, a dose of our own medicine. We must not complain if people try to dump on us.

I would like to refer to one or two remarks made by Senator Dowdall. He referred to the increased consumption of butter in Great Britain without at the same time a corresponding increase in purchasing power. I very much doubt if that is correct. There has been a very considerable increase in purchasing power among the masses of the working people who naturally consume more butter. The higher rate of wages and the increase in social services have meant a greater consumption of butter by the working classes than before the War. When he refers to our exports into the British market being only 10 per cent., a negligible amount, as against any scheme of price marketing regulation, I think that has to be very seriously considered lest in other directions we might provoke retaliation—retaliation which would not affect the English consumer and might very seriously affect us.

I thought that a very significant comment from the Senator, who has, of course, fully calculated the conditions of the butter industry. I cannot help feeling that we should explore more in this matter the possibilities of Commonwealth co-operation. Very soon the various Dominions will be in conference as to the best means to consolidate and increase Empire trade. It seems to me we should go there, possibly with rather a free hand, to try and work out in connection with the other Dominions a scheme for giving Commonwealth butter, as a whole, a favourable position among all the great consuming people of the Commonwealth. That is the right angle, and this is the wrong angle—this angle towards intensive nationalisation. If for the time being we feel that we have to do something in that direction at all, it would have been better to do it by a much simpler and more direct and fairer method through the cow-testing associations by a direct bounty towards the milk produced.

Mr. Linehan

I understand that the main object of the Bill is to help the dairying industry in its present critical state, especially the creameries, and for that reason I am in entire sympathy with it. When the creameries were taken over by the late Government a large sum of money was lent to them to finance the purchase of the creameries and the handing over of the co-operative societies. It is necessary for the present Minister to take some steps to put them on their feet and enable them to pay back to the State the very large sum of money which has been lent. The State is involved in this matter, but it is a matter for consideration whether the State should not pay the expense and not place it on farmers who have no connection with creameries. I might say that the farmers who make home-made butter are very much concerned with this Bill. I should say they are alarmed at what the result of this levy might be for them. I cannot say how far their fears are justified, because, as the Minister admitted, the Bill is a very complicated one. I must confess that I am not quite sure whether I understand it myself. Until I do so, I would not be in a position to criticise it properly so that my present observations will be confined to asking a few questions which the Minister might satisfactorily answer so that farmers will know how they stand as regards this matter.

I understand that there are three different classes of accounts to be kept under the Bill—the Creamery Account, the Factory Account, and the Miscellaneous Account which deals with farmers' butter. I should like to know whether the money in each of these accounts will be available only for the purpose for which it is subscribed— that is to say, whether the Creamery Account will be available for financing the factory bounty or vice versa. I see by the Bill that there is to be a butter fund outside the other three Accounts and it might be possible that the money will be put into this fund and dealt with by the Minister as it is required. If the money in the Factory Account is not to be applied to the bounty of creamery butter I cannot see why the factory should be brought in at all. You are really paying them back the same amount that they pay in and that cannot be done without incurring considerable expense in keeping accounts and officials.

As regards farmers who make butter themselves I should like to know whether it is intended that they shall pay a levy of 2d. per Ib. I see there are two sections dealing with that matter. Section 11 says that "the Minister may serve notice in writing on the proprietor of any premises" which of course will include farmers. The section says:

The Minister may serve notice in writing on the proprietor of any premises (not being creamery premises) on which butter is manufactured for sale from any milk or cream wholly or partly supplied by other persons, requiring such proprietors to pay to the Minister not later than the seventh day after the expiration of the levy month specified in such notice and every subsequent levy month on all butter manufactured during such levy month on such premises, a levy at the general rate enforced at the time of manufacture.

According to that section the farmer will be only liable in case he takes in the cream of his neighbours and makes butter in his place. If he did that he would be liable under this section as far as I can read it to pay the levy. Section 12 is a little bit different. It says:

The Minister may serve notice in writing on any person who manufactures butter for sale requiring such person to pay to the Minister not later than the seventh day after the expiration of the levy month specified in such notice and every subsequent levy month on all butter (other than butter in respect of the manufacture of which a levy is required to be paid by or under any other provision of this Act) manufactured by him during such levy month, a levy at the general rate in force at the time of manufacture.

According to my reading of that, the Minister if he wishes can serve a notice on every farmer and under that notice the farmer will have to keep accounts as to the amount of butter he makes and pay a levy of 2d. per Ib. on it. If it is not the intention that that should be done, I think it should be made more clear in the Bill.

There are a few other points which I should like to have cleared up. Sub-section (3) of Section 2 says that "butter which undergoes the process of blending or re-working in a butter factory and no other process shall not be deemed to be manufactured for the purposes of this Act." According to my experience of what happens in a butter factory, if that sub-section is left in the Bill it excludes every butter factory that I know of. Butter cannot be manufactured unless you have milk or cream and the proprietors of a butter factory have to buy butter from the farmers. The only process that I ever saw carried on in the factories was blending or re-working. Of course I should be very glad if my reading of that section was correct so that all butter factories would be excluded. It appears to me that we require some light on that before we can decide what is meant by it.

The Minister made the remark that the Department was perfectly fair as between the creameries and the makers of home butter. If they are it is only very recently they adopted that policy because I have a recollection of their policy for over 30 years. They started the policy at the time they were established, and continued it ever since, of doing everything they possibly could to drive the farmers into the creameries and to abandon the making of home butter. I remember on one occasion when I was a member of the old Council of Agriculture making an effort to assist the farmers who made home butter by seeking to provide for them separators and new appliances for making butter. It was only after a very long struggle that I was able to succeed in getting small loans for farmers for that purpose. I hope that the policy of the Department in future will be fair as between both parties. We require them all. The farmers who make home butter are quite as numerous as those who patronise the creameries. Many of them think the system of making home butter is better for themselves and better for their calves because they have their separated milk fresh to feed their animals. If they think so, I think the legislation of the country should not in any way obstruct them. The intention of the Bill, I understand, is to meet an emergency. The creameries are in a bad way unless something is done for them. I have great sympathy for them but I am very doubtful whether what the Minister is doing in this Bill is best for them and for the farmers of other parts of the country.

Mr. Guinness

I am very sorry that the Minister has found it necessary to leave the House. The few remarks I have to make in connection with the Bill deal largely with figures rather than anything else, figures which the Minister has already given us. I am not certain whether the Minister for Posts and Telegraphs will be able to reconcile them in the absence of the Minister for Agriculture.

Cathaoirleach

Your remarks will be conveyed to the Minister for Agriculture.

Mr. Guinness

In his opening speech, which was extremely interesting, the Minister told us that the object of the Bill was to try, if possible, to improve the price of milk for the milk-producing farmers of the country. It was not butter so much as milk that was concerned. He gave us a series of figures in connection with that matter. It is in connection with these figures that I was very anxious that he should correct me if I have taken them incorrectly, because they do not seem to be reconcilable. He told us that at the present time, taking the best price obtainable for butter, the corresponding price for milk per gallon was 3.3d. He then went on to say that in 1914 and for some years before that 5.62d. per gallon was the average price of milk supplied to the creameries.

Mr. Johnson

That was the estimated cost of production.

Mr. Guinness

The estimated cost of production was 5.62d. Then I understand, from what Senator Johnson has said, that the price which the creameries were paying was probably more than 5.62d. The milk cost the farmers 5.62d. He then went further and said that the bounty which is now suggested of 2d. per Ib. represented .85 of a penny per gallon. He also said that he hoped under the new measure to be able to bring up the price of milk to 5d. per gallon. I think he mentioned the sum of 5d. per gallon as a fair price for milk supplied to the creameries. If you add the present price of 3.3d. to .85d. that only gives us 4.15d., and if what is said is correct that 5d. is what I may call the living wage for milk, this figure of 4.15d. is still very considerably under the mark. That was the point that I was anxious to bring out. Although it seems perfectly easy to add to that by giving a bounty of 37/- on butter exported which was to be obtained through a levy of 2d. per lb., and the Minister says that by doing this he is going to put the farmer on the basis of the economic production of milk, the figures that he gives us do not seem to bring that out.

There is another point I want to allude to. We produce a considerable amount of butter in this country, and honestly I do not know where it all goes to. I live in England mainly, and I go about the country a good deal. I know London fairly well, and I keep my eyes open when going about the country and when going through the shops in London to see if I can find Irish butter. I may say that I have referred to this matter previously when butter was a subject for debate here some months ago. Well, before that debate or since I have failed to find Irish butter. New Zealand and Australian butter is everywhere, and practically there is no other butter. There is a small quantity of Danish butter and butter of other kinds, but Irish butter is conspicuous by its non-existence. I remember that the late Minister for Agriculture, who was here at the time when I referred to this subject before, rather led me to believe, in his reply, that Irish butter had not penetrated to London as yet, but that it was found on the west coast, and some of it on the east coast, though London had not yet been tapped.

We have heard from some Senators to-day, and I think the Minister himself mentioned it, that creameries have actually been closed up for want of trade. The butter produced here in Ireland is a very small proportion of the entire of the butter that is consumed in England. How is it that our creameries are closing up here while butter is pouring into England from countries thousands of miles away— from New Zealand and other Dominions? The only answer I can give is that either the production of butter is too expensive here or else that the marketing of it has never been properly undertaken. I am inclined to think that the latter cause has a good deal to do with the position. We have in London a most admirable High Commissioner, Mr. Dulanty, who was our Trade Representative before he became High Commissioner. But I think he has too much to do as a matter of fact, and that the pushing—and it requires push nowadays to get your goods sold —the pushing of our butter has never been properly undertaken. The fact is that I could not now state here where in London I could go to and be certain of getting a pound of Irish butter. I could go-into any provision shop that usually sells butter and get New Zealand or Dominion butter. That is a matter which the Department might consider— the proper marketing of Irish butter— in order possibly to obviate the necessity of the creameries, as we are told, closing up.

Mr. Jameson

Not being a farmer and only a consumer of butter, I think that this is a Bill which we as citizens must consider from the point of view that we are all now being taken into this butter industry. We are all going to pay something like 20 per cent. more for our butter than if these methods for dealing with the butter situation had not been adopted by the Government. We are now going to pay 1/4d. and 1/5d. for our Irish butter here while the British consumer will buy it at a shilling where it is sold in England at all, and all that because, look at it as you will, the production of butter in New Zealand, in Australia, in Denmark, in the Free State and in the other countries producing butter, is greater than the world wants. And everyone who goes into the market with which we are particularly concerned at present, that is, Great Britain, has to take a very low price if he wishes to go in there at all, and every one of us in these circumstances is asked to pay for the upholding of the butter industry in this country. That is the sort of thing that cannot go on for ever. That our working classes and everybody else in the Free State should take on themselves the burden of forcing through any industry that we may have got here in the Free State and that the whole community should combine in making regulations for competing with the world is a thing that will have to end.

Let us just look for a moment at what happened in the case of the rubber industry. There were a great many countries engaged in the production of rubber and a huge amount of capital was sunk in the enterprise, and the rubber people produced rubber in quantities that the world could not consume; and the result of that has been that they have tried again and again in the different countries to meet together and to do what we are now trying to do—to get regulations made to enable the country to sell all its rubber. Some of the rubber countries which depended upon it are absolutely ruined now. The Dutch East Indies are in a very bad way, and Malay and Ceylon and other countries as well are in an extremely bad way. If we are to persist in this policy of trying to support our industries against the competition of the world, we are going to take upon our shoulders a burden greater than we can bear. Butter is a thing that a good many of us can do without and a number of households will have to go to margarine and give up butter. There is no question about it that all these duties that are coming upon us constitute a burden that I do not believe we can go on per petually carrying.

This is a Bill that undoubtedly ought to be a temporary measure. It is a measure the carrying out of which will require a great deal of overhauling and watching, and I certainly pity the Minister for Agriculture in having to do it. He knows that it is an experiment. This Bill is going to put an enormous amount of responsibility on his shoulders. He is going to be managing director of a huge industry. He will have to see how the factories and the creameries are going on, and how the regulations that he makes are working. One thing I am extremely thankful for is that I am not in his shoes, and another thing I am thankful for is that I am not engaged in the butter industry in the Free State. An industry that requires such regulations as are contained in this Bill and such a tax on the whole community to keep it going must be in a precious bad way indeed; and I should say that any legislation that we are going to enact in order to help it should be of a temporary nature, so that if it is absolutely proved in the end that we cannot compete with the world, the whole country should not be ruined to keep an industry going that cannot be upheld in any other way. I do think that it is highly important that we should give some attention to what Senator Dowdall and Senator Sir John Keane have said, that our competitors in this matter are our own neighbours in the Commonwealth of Nations. There is no doubt that New Zealand, Australia and the Free State—I think the Free State only produces 10 per cent.—are the three countries that are producing the enormous quantity of butter sold to Great Britain; and what is needed is the economic cutting down of the production of butter if we want to keep the price up. There is no other way unless the whole condition of the world changes, and we are able to get a greater demand for our butter, and therefore an increased price. There is only one way of dealing with the situation as far as the butter industry is concerned, and that is that the great producing countries in the Commonwealth should put their heads together and see if they can agree on some method of cutting down the supplies, and so limiting the amount of butter which is at present being forced into the market.

I should like to impress on the Seanad that we should all watch what is going on and ask the Minister frequently for information about it. He is taking on a terrible job and one, considering all the other things he has got to do, which will require an enormous amount of his attention, and that calls for the first-class men of the Civil Service to help him. We should keep ourselves well posted in the work and see how this thing eventually pans out, and we should ask information from all those engaged in the industry, because it is now a national affair. It is an affair for which every one of us who uses butter has to pay. If we merely allow the Bill to go through and then let the subject alone, if we do nothing but sit down and if we try to make no arrangement with our fellow-citizens in the world who are also producing butter, we shall certainly do no good by passing this Bill.

Mr. Dillon

There has been such a lot of comparison made to-day between the agricultural and the non-agricultural portions of the Bill that I should like to say a word or two. I should like to remind the House of the reasons for this subsidy. Having examined the matter as closely as I could I should say that the reason for such a subsidy as is proposed in this Bill is the high protective policy of the present Government and the tariff policy of the last Government. The agricultural population has had taxes imposed upon them for machinery and for the raw material of production, and these matters have pressed with particular hardship, on the working portion of the agricultural population in the agricultural areas. In addition to that I may mention that before these tariffs were instituted the income of the agricultural population versus the income of the non-agricultural population was very unfavourable. I have not the exact figures but as far as I can gather from the Census of Production in 1926, the income of the agricultural community would be £32—I just mention this to give some of the Senators present something to consider—and the corresponding income of the non-agricultural population in the Free State, as I make it out, is £95 per head, and those figures were made out in regard to butter and milk and everything consumed on the farm at city prices. I put these figures to the House to show that there is grave reason for doing something to help the agricultural community out of the rut in which it is. Personally I do not think that this Bill will help them out, because of the tariffs that are being imposed, with the result of increasing the cost of production. I believe that as time goes on, and probably at a time not very long distant, it will become impossible for the farmers to carry on.

That is my idea and I think, for that reason, that this bonus will probably have to be increased by that time or the levy on the creamery taken off. As far as I can judge and I live in a creamery district, a district of small proprietors to whom this subsidy does not mean so much as it would mean in Limerick, in the rural portions of this State, there is very little milk used and the result is that a fair share of butter is consumed as a substitute. The reason for the inequality of income then will have to be revised not later than the fall of this year. I should like to see the levy on the creameries radically revised. I think this levy could not be supported by the representatives of the farmers especially the representatives of a dairying district considering the difficulties those farmers have to face.

Miss Browne

I think that Senator Dillon is quite right in what he has said with regard to the tariff policy of the present Government. The farmers will be so crushed by that policy that they will require spoon-feeding of the kind such as this Bill provides in order to keep them alive. I have not very much faith in this Bill because similar methods have been tried in other countries with no success. I am a representative of an area where the farmers make their own butter. I live in a district where there are no creameries. Like Senator Linehan I would like more information as to what would be the exact position of those farmers under the Bill. I would like to know if the Minister could tell the House whether at the present time certain farmers are being charged a levy of 2d. per Ib. on the butter they sell. I think that is not right. I have known farmers who sold butter in boxes, butter evidently not intended for factory or for blending, and for this butter they have been charged a levy of 2d. with the result that they were paid the princely price of 7d. per Ib. for butter. These are farmers who make first class butter. I would like to know if the Minister has any information on that matter. Senator Dillon is correct in what he has said in the matter of the consumption of butter. I think of all the people in the world we consume more butter per head of the population than any other people. The figure has been given as 32 lbs. per head. That is all to the good. As to the chance of our holding our own in the British market there is to my mind only one thing to be considered. That is to produce first class butter. Any method that will help us in producing first class butter, home-made butter, will help the farmers.

Mr. Johnson

Will they eat the farmers' butter in England?

Miss Browne

I know they buy farmers' butter in England.

Mr. O'Connor

As far as I have been able to judge, it seems to be really impossible to follow this measure. I could not possibly follow and understand all these new regulations and these new bounties. It is, I think, a question of trying to get ourselves in the position of competing with people who are competing with us in the butter market in Great Britain. I am not one of those who was ever in love with the creameries or in favour of seeing our butter produced in creameries. I have always stood for the production of good young cattle and for converting our milk into good young cattle. Young cattle were reared years ago in the area I represent, and these cattle were fed by the farmers with the milk produced on the farm. That industry has degenerated and, to a great extent, it has been lost in a good many districts. In the rearing of calves there was always a certainty of a good profit for the farmer. We have the wide world competing against us in the finished article of butter, but in the matter of calves and young cattle we have no one but ourselves to compete against. There is quite a good demand still in our own country and in England and Scotland for our young stores, and there is always the certainty of a good market, especially for good young heifers. I have not at all so much sympathy with people in the-dairying industry. In my district I knew numbers of farmers who reared annually 20 young calves from their own cows.

This question of creameries led, to a very large extent, to the growth of idleness. I have seen at these creameries 30, 40 or 50 different cars waiting for their milk to be taken from them. There those youngsters got into habits of idleness and picked up jackeen tricks. These creameries have got into such a state that they are always looking forward to being helped by the Government. I do not think that it is possible that that principle or that point of view can ever succeed. It is the first sign of bad luck in any in dustry to see it looking to the Government for a subsidy. Any industry that cannot stand on its own feet or cannot by its own management make ends meet, cannot be of much use to the country. This brings about, that state of mind that the industry is always depending on spoon-feeding. That does not bring about a real spirit of self-help, and it is entirely opposed to any useful development of industry. An industry ought stand on its own feet. I do not at all approve of subsidising any industry.

I must say that I sympathise with the Minister for Agriculture who is trying to make the dairying industry a success by this subsidy and the putting on of a levy. I must say that on the question of Denmark sending in butter here I was inclined to be a protectionist. They purchase nothing from us, and very little from England. That was an example of living on the custom of a country without giving anything in return. I am one of those who do not think that in the long run these subsidies are likely to help to any great extent. I would like to see the Government devoting all their energy in helping to make the rearing of livestock one of the biggest industries in the country instead of devoting so much time to other things; that is more or less wasting time. It is no good to try to promote any industry that has not in it the element of success. I was hoping to hear a statement from the Minister that something would be done in helping to rear young cattle rather than in devoting so much attention to the butter industry.

Mr. Wilson

There are only one or two points to which I wish to refer. Of course we are all in agreement with the idea that this industry had been a kind of key industry and that it should be helped. The only question that arises is—is this the way to help it? On that matter I have an open mind. I am prepared to wait to see whether the legislation introduced now will help the industry. The great objection that I see to this system of raising the price of butter in the home market is that the public are being fleeced and I was wondering if the Minister considered that instead of restricting the export of butter in order to cold-store it for the winter supply, whether it would not be wiser for him to permit the importation of cheap butter in the winter months in order that the people who pay dearly for butter in the summer time should have cheap butter in the winter. That tariff of 4d. per Ib. was put on in furtherance of winter dairying. Now it is clear that you cannot have at the same time winter dairying and the storage of butter. It is obvious that the Minister has given up the idea of winter dairying because he is now in favour of cold-storing the butter. That being the case he should take off the 4d. tariff which was put on and allow the butter in free of duty so that the people would have cheap butter during the winter months. I think that is a scheme that might work now in connection with this Bill.

Senator Jameson spoke of this measure and said we all have an interest in the butter industry. Equally we have an interest in the boot industry. For a number of years now we have been paying 5d. per pair for our boots, and after the recent tariffs we will be paying £1 per ton more for our manure. It seems that the more we are to pay the richer we are to be. Everybody is to get richer by paying too much for what he buys. Well, that is a remark perhaps which I should not make. At the same time we are now in the position of experimenting. Then let us have the experiment and see how it is going on. Really, how any body of men can get richer by taxing themselves, amazes me. Perhaps the Minister would consider the suggestion I am making at a later stage, and thus give the public some of their own back by relieving the consumers of butter to some extent. I would like if he would consider the idea of remitting the tariff altogether in the winter months, unless he needs money for revenue.

Mr. MacEllin

Senator Wilson has talked about taking off the tariff on butter in the winter. The result of that would be that you would have such enormous supplies of butter imported in the winter that you would need no imports in the summer. To my mind, Senator O'Connor advocated what I think was very poor economics, when he said that the dairying industry should be given up altogether, and that the farmers should go in for rearing young cattle. What he is really proposing is that we should feed butter to our young calves. Feeding whole milk to calves means rearing them on butter. That is a ridiculous proposal. Senator Miss Browne had some objection about somebody who had sold butter for 7d. a Ib. I think he must be very foolish if he sold butter at 7d. a Ib. when the price was 1/4. There must be seriously something wrong there.

Miss Browne

On a point of correction, what I wanted to know from the Minister was whether it was right that a levy of 2d. a Ib. should be imposed on butter. I wanted to know from him whether 2d. a Ib. should be imposed on home-made butter not intended for blending in a factory.

Mr. MacEllin

Any farmer can bring his butter into the market and get the market value for it. The man himself will have to get the value for his butter. If good butter is produced it is worth more than 7d. a Ib. Senator Johnson spoke about the terrible hardship which this butter bounty means on the people as a whole. He also stated that there was acute depression existing all over the world to-day. As a matter of fact there is terrible depression existing, and that is a thing which statesmen all over the world are trying to rectify. What we are trying to do here is to safeguard the dairying industry—the rock on which the whole livestock of the agricultural industry is based.

It is only a temporary expedient at the moment. We hear a good deal about world resolutions at the moment, but the only thing that I see that seems to emanate from World Conferences are red or yellow papers. If I might make a little prophecy, I would not be surprised to see that the same red, white and yellow papers would be issued after Ottawa. That is the position as I see it. Every country is striving to extend and develop itself; every country is out for itself, and every country goes to a conference to get as much as it can. You will even see that if they come to an agreement, as at Locarno, there will be so many reservations attaching to it that the whole agreement will be nullified. When you see this hypocritical sham existing all over the world, it is a great thing for the Irish people that we have a Government installed here that is looking after our own people, and which is prepared to rectify the mistakes that have been made here for the last ten years.

The Butter Bounty Bill is giving confidence to the farmers; at least, there is hope for the future, and with co-operation a success may be made of any scheme. I believe this Bill is the basis of something which will mean some good in the future. So far as the further development of the Bill is concerned, I believe there is one blot on the position as far as I can see it, and that is that the farmers themselves are not making a serious effort at co-operation and are not striving to eliminate that spirit of distrust which appears to exist among them. Their future depends upon co-operation between themselves and the Minister and I might add the establishment of a Central Marketing Board. Even if it was a failure before, there is no reason why it should not be developed on a proper basis again, and, if need be, to compel those to come in who were primarily responsible before for the defeat of the Central Marketing Board. I think it would be all to the good and bring material benefits. I have not much more to say on the Bill, but I believe that not alone should this Bill go through the House, but we should have further development on the same principle for the benefit of the whole industry.

Dr. Ryan

I want to reply to certain points raised on the Bill. Senator Dowdall asked that we be cautious in raising the export restrictions and that we would not prohibit the export of tinned butter. Well, as the Bill is drafted, Senators can see that we can make an order to prohibit certain classes of butter and the reason that it is worded in that way is that we believe that it will only be necessary to make the order apply to, say, creamery butter at any time. There is not a big consumption of factory butter at home, and we would give freedom of action to the factories. So far as tinned butter is concerned, I do not think we would prohibit the export of that commodity. It is tinned for the foreign market, and we would allow it to be exported.

There are other points. For instance, Senator Dowdall spoke of the preference which the Department has had for creameries against the farmers who make butter in their own dairies. As I tried to explain when introducing the Bill, we thought we were being fair in drawing up this Bill and in the working of the Bill we may be able to prove that we are fair to everybody concerned. I must go back to the question again. Senator Johnson thinks that this money should have been raised by way of taxation and should not have been put on the consumer. The same thing was put to me in the Dáil when I was passing the Second Reading of the Bill. At that time the Budget had not been introduced.

I said that if any member of the Dáil had put that matter to me again after the Budget had been introduced I would agree to consider it. I would like to ask, however, where would we raise £600,000 or £700,000 at the present time? To get this money we would have to tax sugar and butter. It is as well to get it this way as to raise it through the Budget and put the proceeds of such a tax into the pool. It may be correct, as Senator Johnson said, that we are putting a burden of 8d. or 1/- tax on the household as a result of this Bill, but I would like to remind Senator Johnson, however, that we did this because we foresaw a very big fall in the price of butter. I think it would be a genuine complaint if as a result we were to increase the price of butter to a considerable extent. All we tried to do was to keep butter from falling. Even for the last two years the average price is 1/4, the maximum price will not be more than 1/5. Even though the Bill is practically in operation since 21st April, the price of butter to the consumer has been down as low as 1/3, and at other times 1/4.

There is a section where the Minister for Agriculture can fix the wholesale price of butter. The wholesale price would be fixed at 142s. as the maximum but it would be fixed at such a rate that the retailer could be reasonably expected to sell the butter at 1s. 5d. and if the Minister for Agriculture does his part under this Bill it will be the business of the Minister for Industry and Commerce to fix the retail price of butter.

Mr. Johnson

Will you put a figure in the BilI?

Dr. Ryan

I have no objection to 142s. going in. Senator Johnson spoke of the competition, between creameries and said that we have not made any great attempt to promote central marketing. That question was discussed at great length in the Dáil, and Senators have referred to it. I pointed out in the Dáil that if we were to give the highest bounty to creameries exporting under the Central Marketing Association—suppose we were to give 4d. per lb. of a bounty and only give them back their 2d. levy—these creameries would not come into it. We would not gain anything towards central marketing. Suppose 60 per cent. were to join the organisation and the other 40 per cent. would sell in the home market, they would probably break the central marketing.

I think it is impossible to do anything positive towards central marketing, but we hope to get the confidence of the managers and of the committees of the creameries, to restore their confidence once more in one another and to see if something can be done by combination. They believe they had a bitter experience with regard to central marketing. I do not think the Central Marketing Association could have been held responsible for the disasters that occurred because they were confronted with an almost impossible situation. It was tried at an unfortunate time. It was sufficient to prove to those who are against it that it was right and we have to get their confidence again.

Senator Sir John Keane spoke of the consequences of making variations in this Bill and added that they must be followed up by other variations. We have power to vary the bounty if the amount of Butter exported, for instance, is not being exported in the percentage of 50 per cent. We may vary the bounty but we must not vary the levy. Senator Sir John Keane also said that we might drive the farmer from one product to another. That is not the object at all. We may, for instance, if we find the creameries are going to get into the export of cream and are competing against one another on the British market, and suppose we are fairly convinced that this would lead to a cutting of prices, we would be quite justified in cutting down the bounty of cream and saying to the creameries, "You will have either to get more for your cream on the British markets or you will have to go back to butter."

This is an instance on which we might vary the bounty on cream and try and get a number back to butter so that they would get a better price for the article. It is with a view to seeing that our own producers are going to get the best possible price they can get on the market that we have this provision to vary the bounty. We are also told that this sort of thing has never worked and never will work. That perhaps was a statement made by Senator Sir John Keane, but I may tell the Senator that it is not an original idea of mine at all. It was a gentleman named Patterson in Australia who conceived the idea there about five or six years ago. As a result they have increased their exports very considerably; they have got much more for their butter and they have got a number of people into the production of butter in Australia who have naturally increased their exports. And how can you judge success unless by the test of the number of people who were not in it before? I hold it has been successful, and it may be successful again, in spite of the prophecies of Senator Sir John Keane. He also said that we should have tried to do this by working through the Cow Testing Associations, and by giving so much per gallon to the farmers in the Associations, and that we would have got more done. I submit that that is a very general sort of suggestion, and, unfortunately, when a Minister comes before the Dáil and Seanad, he is not allowed to deal in generalities. He has to put it down in sections and subsections and show the Oireachtas what he is going to do. I must admit that the Senator has the advantage of me in that way, and he has not come down to the point of how the thing could be done. If the Senator has a better scheme by which things could be done better through the Cow Testing Associations, I think he will have very little trouble in convincing me that the scheme is better, and he would have absolutely no trouble in getting me to adopt it. I will not be ashamed to come before the Dáil and Seanad, even in a couple of months' time and say: "A better Bill has been suggested to me and I propose to reject the old Bill and to bring in the good Bill suggested to me."

I have also been told that it is an extraordinary thing that in the Department of Agriculture we have no costing department. There has not been a costing department for some time, but we are at present organising one, and one of our officers is undergoing a special course of training to enable him to take charge of that department. There has been a skeleton organisation there for some time, and certain returns came in, but the particular department was not properly organised, and no great use was made of the figures sent in by farmers who were making returns, so that we could not get any advantage from the returns made. However, one of our officers is being trained to take charge of the costing department and we hope to have it in full working by next winter.

I stated here before that we were taking power to restrict imports so that we might prevent or avoid dumping and Senator Sir John Keane says that we are ourselves, under this Bill, going to dump butter into the foreign market. I do not know what the definition of dumping is, but if subsidising our producers in order to enable them to compete in the foreign market is dumping, then we are dumping. There is no doubt about that. I am glad to say this, however, that so far as the price of our butter on the British market is concerned, we have never before gone as near to the Danish price as we have during the last few months. If any Senator will look up the prices in the British trade papers, or in the daily papers, he will find that we are sometimes now within two or three shillings of the Danish price, whereas for the last five years we were never nearer than 13/- a cwt. to the Danish price. I only hope that that will continue. At any rate, we are not dumping a cheap article into the British market. As a matter of fact, we are putting in a better article in the opinion of the British people.

Sir John Keane

I do not want to interrupt the Minister, but would he say whether that comparison between the Danish and the Irish price makes allowance for the preference we enjoy?

Mr. Dowdall

Perhaps I could tell Sir John Keane. The f.o.b. price of Danish butter is considerably below, and has been considerably below, Irish butter for the last month.

Dr. Ryan

That is true. The f.o.b. price is below ours, but I am speaking of the price the British consumer is paying for the two butters. Senator Linehan wanted some information with regard to the fund. The fund includes the three pools—I think they are called Accounts in the Bill—and the Minister cannot transfer money from one to the other. The Senator will see that under the financial clauses of the Bill the Minister must debit the creamery fund, for instance, with moneys that are due to be paid out of the creamery pool, but with no other moneys. The Bill lays down expressly that no money can be taken out of, or put into, any of the three pools except what is intended for it in the Bill. There is, however, a provision in respect of the Miscellaneous Account that if it should have funds to spare at the end of the financial year they may be disposed of in any way the Minister thinks fit, with the consent of the Dáil. The Minister must bring a resolution before the Dáil before he can dispose of the funds, so that the Minister has really very little power in regard to the disposal of funds in any of the three Accounts.

I was asked by Senator Linehan and Senator Miss Browne whether the farmers would be levied. The position with regard to the farmers is that, if the farm butter is sold to a person registered under the Dairy Produce Act, 1924, who is not an exporting butter factory, or exporting merchant, the levy is payable since the 21st April; but there are other classes that we hope to bring under the Act—those who are not at present registered, and in that case, of course, the levy cannot be collected until the Bill becomes an Act and would not be levied until July. If the butter mentioned by Senator Miss Browne is sold to a person registered under the 1924 Act, either as an exporting butter factory. or exporting butter merchant, the levy would be payable by him; but, of course, if the levy was payable by him. he would be entitled to a bounty on export, so that in any case the farmer should not have been asked to pay the levy.

Senator Linehan also asks me to state who was covered by Sections 11 and 12. Section 11 refers to what are known as hand-separating stations. There are hand-separating stations in certain parts of Munster—I think they are confined to Munster—and we do not know, as a matter of fact, who owns them. We will find out eventually I suppose, but, at present, we have to levy the rated occupier. Section 12 refers to the unregistered butter factory—the factory which is not registered under the Dairy Produce Act, but which is registered under the Food and Drugs Act. It also would be possible under that to cover the big farmer to whom Senator Linehan refers. As a matter of fact, we could of course take in the small farmer, but we have no intention of doing so; but if we had a farmer who had, say, over 100 cows—I do not know whether there is any such man to be got—and if he thought that he was going to do better business by separating his own milk and making his own butter rather than passing it through the merchant or creamery where the levy must be paid, we would have power to serve a notice on that particular farmer, and have him subject to levy.

Senator Linehan also drew attention to sub-section (3) of Section 2, which refers to "manufactured for the purpose of this Act." That refers to Section 12, and I think that if Senator Linehan reads that definition and refers to Section 12, he will see what the reason for that definition is. These are things, however, that could perhaps be better explained on Committee. Senator Jameson thinks that we cannot continue to carry on under duties of all sorts and that we should not help an industry to compete against the world by subsidy, or, I take it, by tariffs or duties. That would be a beautiful position if it could be brought about. If we had free trade the whole world over, and if we had the same organisation here with regard to industry that they have in other countries, and if we all started off on a fair basis, I think it would be a very good thing. Is there any single industry—I will not say single industry, but are there many industries in which we could compete, supposing we took all tariffs off and said "Let there be free trade from this on," especially where you have what is very common at the present time— countries manufacturing such a thing as cement for their own country, the surplus of which they are prepared to sell here at a much lower price than that at which they are selling it in their own country? The same thing applies, I believe, to some other articles that are sold at certain prices in the country of production, and which they are prepared to export at a lower price. How are we, a little country like this, to keep an industry going if we are to take off tariffs and meet that sort of competition?

If I were to deal with the point raised by Senator Dillon and Senator Miss Browne who spoke of tariffs bearing on the farmer, I would say, supposing we took off tariffs, how are our farmers going to carry the unemployed in the towns and how are they going to sell the goods they produce if there is nobody with the wherewithal to buy-them? I think we would be in a hopeless position. As a matter of fact, I think the only thing we can do sensibly, under present conditions, is to try to build up a home market for the greater part of the produce of our farmers, and I think it is just as well for us, as a matter of fact, if we can manage it, to get our farmers to sell their products to our own townspeople and let these townspeople make the clothes and boots that they require, rather than sell them to the townspeople of some other country and let the townspeople there make those clothes and boots for them. It has the added advantage that if we have our own townspeople working, they will not be on the unemployment fund, and they will be a help to our own farmers in paying the rates and taxes necessary to run this country.

Senator Wilson asked me what was the objection to allowing butter in during the winter. The first objection is that we want to guarantee our consumers a good article, winter and summer, as well as an article of special price. We do not think—we may be, perhaps, a little bit proud—that any other butter is as good as Irish. Also, it would be no advantage to the butter industry, because if butter is not needed, it will be exported and will draw a bounty, and that would mean that the proportion of exports would go up, and if the proportion of exports goes up, the bounty goes down and we get less for the butter sold in summer. So you really get two reasons: (1) we want good butter for winter and (2) we want to keep exports down as low as possible in order that the bounty may be as high as possible.

Senator O'Connor said that we are devoting a good deal of time and money to the creamery industry, but that we had another industry, live stock, which was a much better paying industry for the country. I do not dispute with Senator O'Connor that the live stock industry has held its own better than any other during the last few years, but I do not think our farmers will continue to keep cows unless they get a fair price for their milk of butter; and unless they continue to keep cows our cattle industry is gone, so that in order to have cattle we must have cows, and we must get some price for butter and milk. Therefore, the need for this Bill is there, even if you look at it from the point of view of cattle. I think those are the only questions raised.

Question put and agreed to.

Committee Stage ordered to be taken on next sitting day.

Dr. Ryan

I should like to say that as this Bill is drafted it would be necessary to have it through by the 1st of July. It would facilitate me very much if the Seanad would take the remaining stages on 29th June. Otherwise it would be necessary to let me know beforehand.

Cathaoirleach

I think the House will try to facilitate the Minister in every way.

Mr. Douglas

I take it that if the amendments which are introduced in the Committee Stage are of a simple character there will be no difficulty at all. If they are not of that character it might lead to delay and the Minister should let us know beforehand in case of such difficulties.

Dr. Ryan

Oh, yes.

Colonel Moore

I feel that as far as the levy goes this Bill will be of great advantage and the sooner it is got into some sort of finished state the more satisfactory it will be for the creamery producers and the merchants. The Minister should get facilities therefore to put it through at the earliest possible moment. The Bill has been discussed, and though it may be necessary after twelve months' control to put in some modifications the sooner we get it on some basis so that if can start to operate the better.

Cathaoirleach

I am sure that the Minister will be facilitated in every possible way.