This Bill is a comprehensive measure, and its administration will fall partly to the Department of Industry and Commerce and partly to the Department of Agriculture. It is, consequently, a measure which perhaps could be usefully discussed in two stages, but it was considered desirable that all the provisions of the scheme should be embodied in the one Bill so that the danger of overlapping, which would be natural under these circumstances, would be reduced to a minimum. The purpose of the Bill is to provide, first, for the encouragement of the growing of various cereal crops in the country; secondly, to ensure that there will be a market for any such crop grown; and, thirdly, to provide the industrial concerns for the utilisation of the wheat crop and the marketing of the other crops in the form required by the Bill. It is, I think, hardly necessary to expatiate on the desirability of securing increased production of the various cereal crops with which this Bill is concerned or the utilisation of those crops for feeding purposes by the breeders of live stock, in so far as that is practicable, in preference to imported cereals. Neither should it be necessary to advocate at length the desirability of securing that the flour requirements of the Saorstát should be provided in full from mills established in the Saorstát. Apart altogether from the question of the increased employment involved and the greater national wealth resultant from that employment, there is the broad question of national safety.
In most civilised countries governments have been concerned to encourage the production of wheat and other cereals as well as to preserve the milling industry as a key industry. There is practically no European country in which State assistance of one kind or another to encourage wheat production is not given, or in which the flour-milling industry is not protected. I know there are some people who believe that for some peculiar reason Ireland is the one spot upon the earth on which it is not possible to grow wheat, and the one country which, for some reason, might find it advantageous to depend on outside sources for its supplies of an essential commodity of food, namely, flour. That view, however, is I am sure not generally held anywhere. It has always been one of the points of the national programme here that State action to restore wheat as one of the main crops of the country, plus action to develop the flour-milling industry, should be undertaken. That is the design behind this Bill. It is, of course, possible to criticise the machinery that has been established to achieve these ends, but I do not think anyone can dispute the desirability of attaining these ends. It may be that the machinery is capable of improvement. It may be that alternative methods of achieving the same purpose can be devised, but the desirability of the purpose is, I think, beyond question. If, therefore, we accept that contention and examine the Bill from the point of view of its practicability and the machinery which it purports to create, I think we will find that whatever defects the machinery may have it is at least capable of working. Senators will, perhaps, be enabled to appreciate that fact better if I go through the various Parts of the Bill and explain what they are intended to achieve.
Part I of the Bill is mainly confined to definitions of one kind or another. Section 3 is a list of definitions all of which are, of course, important because the significance of the terms used in the Bill rests upon the phraseology of that section. Sections 4 and 5 are designed to secure, in respect of the flour-milling industry, the operation of the principles which were embodied in the Control of Manufactures Act. Senators will remember that the milling of wheat was expressly excluded from the scope of that Act because of the intention to introduce this Bill which makes special provision in the case of the milling industry. Section 10 provides for the establishment of an Advisory Committee, the duties of which will be to advise the Minister for Industry and Commerce in respect of the execution of his functions under the Act.
It is when we come to Part II of the Bill that we get to the vital clauses of it. Part II provides for the control and regulation of wheat milling. It is, perhaps, well at this stage to point out that to a very large extent the scheme outlined in this Part of the Bill is at present in operation, and that it would be possible in any event to bring the entire scheme of the Bill into effect by purely finance legislation. To a large extent that has been done, but it was considered desirable and just that the details of the scheme should be set out in legislation and those affected by it given all the protection required. Part II provides that it shall not be lawful for any person to engage in the business of milling wheat without a licence. For those who were engaged in the industry during any part of 1931 that licence is automatically available. It cannot be refused to them or made subject to any conditions except those that are set out on the face of the Bill. In respect of concerns established after the passage of the Bill, or silent mills which were not in production in 1931 but which were in production some years previous to that, a licence may or may not be granted, and such licence may or may not be subject to special conditions. It is our aim to secure that the milling capacity of the country will be brought to a point somewhat in excess of the country's requirements. It may be considered desirable to allow milling capacity to grow, to an extent, after 100 per cent. of the requirements had been satisfied, but those who have been watching the experience of other countries, and, particularly, the experience of Great Britain, which, during the war, became very much over-milled, will realise that there are, in connection with this industry, very considerable disadvantages associated with too much competition. Consequently, it would be the policy of the Government to be very reluctant to issue new licences for the establishment of additional mills after the point had been reached at which we could say that the entire requirements of the country were being met from existing mills, and something more, that something more being intended to ensure that the element of competition would enter and have its influence on price levels.
Pending the day on which we will be able to supply all our requirements, flour must, of course, be imported. At present, there is a 5/- import duty on flour, with a licence provision. That licence provision is being operated to allow in that quantity of flour which is required to supplement the production of the existing mills, with a little more. On September 1st, that scheme came into operation. The duty on flour was imposed in July but it was not made effective until 1st September. On that date, the normal importation of flour was reduced by one half and it continued at that rate until November when a much more substantial reduction was made. The reduction which was made in November was very substantial because it appeared obvious, during the months preceding it, that we had, to some extent, underestimated the supply of flour in the country and over-estimated the quantity of flour required. Consequently, although we reduced the importation by half as from 1st September, the existing mills did not come, as we intended they should come, into full production, and, in fact, some mills here and there had to close temporarily, for a week or so, in order to clear stocks. We effected, on 1st September, therefore, a much more drastic reduction, although it is possible that, at the end of the next quarter, when the position is being reviewed, an increased quantity of flour will have to be allowed in. However, the intention is to get the existing mills to the point of producing to capacity and allowing in the quantity of flour required to supplement their production and to supply our requirements plus a certain percentage designed to ensure that the element of competition will operate.
A number of applications in anticipation of the passage of this Bill for licences to erect new mills or to extend the capacity of existing mills have been received and we have, in fact, more or less planned out the flour-milling scheme as it will finally appear. An intimation has been given to various parties that, on the passage of the Bill, the licence they require will be issued to them. The purpose behind the giving of these undertakings was to ensure that there would be no delay in the construction of new mills or in the extension of existing mills necessary to bring production to the point at which it would meet requirements.
If, and when, Senators are inclined to criticise this Part of the Bill and the measure of control which it gives over the flour-milling industry, there are some points I want them to bear in mind. The first is that the flour-milling industry has been controlled in the Saorstát for a number of years. Senators will remember that, in 1926, after the establishment of the Tariff Commission the flour millers of the Saorstát applied for the imposition of a protective duty against which the Tariff Commission recommended. Some time after that refusal of a protective duty, the flour millers of the Saorstát entered into an arrangement with the flour millers of Great Britain concerned with this market. An organisation called the Mutual Millers' Association was formed and the Saorstát market was parcelled out between the importers and the home producers.
The arrangement permitted home producers to manufacture flour to half the capacity of their mills and to supply what were roughly half the requirements of the country and permitted the importers to supply the balance. Any Saorstát flour miller who exceeded his quota under the arrangement became liable to a fine, and a more substantial fine than is provided for in this Bill. The money secured from these fines went into a fund which was designed to facilitate Saorstát flour millers to get out of business. The whole industry was rigidly controlled by flour millers, in the interest of flour millers, and those who will take the trouble of studying the movement of flour prices will note that, since the scheme came into operation, the movement has been continuously upward. That situation was one which, in our opinion, was most undesirable. It was complicated by the fact that a very big English combine was gradually acquiring a controlling influence over the industry and, at the time of the change of Government, somewhat more than one-third of the total milling capacity of the country was under the influence of that combine. That position has not been disturbed. It is true that the proportion of capacity which that particular group will control will diminish as the total capacity increases, but it is not intended to refuse a licence under this Bill to anybody who was, in fact, engaged in milling flour during 1931. We are merely stepping in to prevent the position becoming worse but we do not attempt to go back over anything that has been done although certain action has been taken voluntarily by people concerned which has, to some extent, redressed that position.
The scheme here provides for the issuing of quotas in respect of each licensed mill. It is intended that these quotas will be fixed on the full capacity of the mill during the year 1931. A miller may mill less than the quota to the extent of 10 per cent. If he fails to mill this quota by more than 10 per cent., he commits an offence under the Bill and is liable to punishment, but, apart from the legal punishment provided, he becomes liable to a reduction in his quota. If he mills more than his quota, he has to pay a fine of 3/- per sack on the excess. Three shillings is, of course, a fairly substantial amount, but a fluctuation of 3/- in the price of flour, in the course of a year, is not unusual and it is quite conceivable that certain mills in the country may find it profitable to sell in excess of their quota, paying a fine of 3/- per sack and still be able to compete with other mills, and there is nothing in the Bill to prevent them from doing that. The inefficient flour miller is not safeguarded by the Bill. There will be, apart from any other consideration, a surplus of flour; that surplus will have to find a market and it will find it at the expense of the most inefficient miller. That miller will not be able to sell flour to his quota, consequently, and, in the following quota year, his quota will be reduced, and, step by step, he will go out of existence. Apart from that, there is always the possibility of the other factor operating, that the more efficient miller may be able to undersell him in his own district, despite the 3/- fine, in which case he will be unable, to a much greater extent, to mill to his quota. Quotas are liable to variation as circumstances require but, generally speaking, it is our intention that quotas will be fixed at the capacity of the mill and will only be increased in consequence of the operation of our definite plan. There are certain mills in respect of which we have already given an undertaking that, in the event of the Bill becoming law, an increase in the quota will be permitter, and these firms, in anticipation of the passage of the Bill, and on the strength of that undertaking, are, at the moment, installing the additional machinery required.
It is not intended that the whole of the difference between present capacity and requirements will be filled in that way because there are a number of districts in the Saorstát in which there are no mills at present and in which it is eminently desirable that mills should exist. I might mention the northern part of the country as an example. If we draw a line from Dublin to Galway we find that there is only one flour mill, near Sligo, north of that line, and, in view of the number of bakeries in the eastern part of the country, in North Dublin and also in Donegal and other places, it is obviously desirable that we should have flour mills in these districts. It is intended to hold some part of the quotas for mills which have been established there or in respect of which steps have already been taken. Similarly there are other parts of the country in which any one glancing at a map of the country on which the location of flour mills is marked, will note that it is desirable that mills should be established, and steps to this end are being taken. Companies are being formed and capital being raised. In other places, the situation can easily be met by extending the capacity of some existing mill and that also is being done.
It is our desire that, to whatever extent is possible, the mills should be established in rural areas rather than at the ports. The whole tendency recently, of course, has been to concentrate flour mills on the quayside at the larger ports because of the savings effected in the unloading of wheat from ships, but if we are going to have a wheat promotion scheme and any considerable quantity of wheat available in the country, the principal advantage of a port mill does not operate and, in fact, it becomes, on balance, desirable to have the mill in rural areas rather than in port areas. There are, of course, some flour millers who are very strongly of opinion, and who have given voice to their opinions in the Press, that, in any event, a rural mill has a substantial advantage over a port mill and that it can produce more economically and sell more cheaply, but that opinion is not widely held. The tendency, however, has been, in recent years, towards the erection of huge mills with tremendous capacity on the quayside. I do not wish to say that I would favour, to any great extent, the establishment of very small mills, but mills with a capacity smaller than some of the larger port mills, situated in rural areas, under the new circumstances, would appear to be quite as competent to mill and to sell as cheaply as any port mill. In pursuance of our general policy, the licensing powers conferred by this Bill will be operated to that end. Of course, we must always bear in mind that the large centres of consumption are the cities and, consequently, the necessary provision to supply the requirements of the cities must be made.
Section 29 requires that every licensed flour miller shall mill in each year a fixed quantity of home-grown wheat. The quantity will be determined by the Minister for Industry and Commerce after consultation with the Minister for Agriculture, having regard to the reports received of the quantity of wheat grown in the country. A definition of millable wheat will be made, but it will be necessary in the initial stages to work upon some rough and ready calculation in fixing the quota of home-grown wheat to be milled by each miller. Power is taken to vary that quantity from time to time during the season as it is found we have underestimated or overestimated the supply. Power is also conferred upon any flour miller to arrange to have his quota of home-grown wheat milled on his behalf by another miller. It is not unlikely some flour millers will arrange to have a large part of their capacity devoted entirely to the milling of home-grown wheat on behalf of those flour millers whose mills are not at the moment sufficiently equipped to handle home-grown wheat in an efficient manner. There are mills in the country which milled home-grown wheat in the past. These mills are equipped with the necessary kilns for drying wheat and they possess facilities not possessed by other mills. Some arrangement of the kind I have referred to may be made with flour millers and this section makes adequate provision in that respect.
Part III provides for subsidies to inland mills in certain cases. When the Bill was being drafted, we had in mind that it might be necessary to provide some inducement to millers to remain in rural areas until such time as the supply of home-grown wheat was available and this Part was inserted in the Bill. During the period between the drawing up of the Bill and its introduction in the Dáil we went into the matter with very great care and in very great detail. We discussed it on a number of occasions with the organisation of the flour millers and with individual millers. Finally we came to the conclusion that, on balance, there was no case for a subsidy for inland mills. Whatever disadvantages they had vis-a-vis the port mills, they had also compensating advantages and most of them could hold, and were in fact very successfully holding, their own against port mills and could be expected to do so. We did feel there might be isolated cases of mills in particular districts suffering from particular disadvantages which, in the general public interest, should be preserved and we felt that some subsidy arrangement might be necessary in their case. Consequently, we amended Part III of the Bill during its passage through the Dáil so as to give us power in certain cases to provide, for limited periods, subsidies to mills so situated. I do not anticipate that power will have to be exercised to any extent.
Part IV of the Bill provides for the registration of flour importers, distillers, wheat importers, wheat dealers, wheat growers, maize millers, maize importers and manufacturers of compound feeding stuffs, It also imposes a restriction on the carrying on of certain businesses. It is necessary that not merely should flour and maize milling be brought under supervision and control, but that certain consequential provisions should also be made in respect of other industries. Distillers must be secured their supplies of wheat and it is also necessary to ensure that there will be no possibility of the State being defrauded by any part of the subsidy available for the encouragement of wheat growing being expended in respect of imported wheat.
The scheme for the subsidisation of wheat-growing is, I think, easily understandable. All wheat-growers are required to register with the Department of Agriculture. When the farmer offers his wheat for sale he offers it to whatever flour miller is prepared to take it. A record of the sale is made and transmitted to the Department of Agriculture. At the end of the year the officials of the Department determine what has been the average price paid for home-grown wheat. There is then paid to each grower, to each farmer, the difference between that average price and the standard price set out in the Second Schedule of the Bill. The standard price varies for different periods of the year and the variation is designed to encourage farmers not to market all their wheat at once but to hold it till after the turn of the year and then offer it during that period. Farmers who can keep it are induced to hold it. If a farmer cannot keep it, he can market it at once. There are certain farmers who may be able to hold the wheat and the higher price operating in the second part of the year is designed to induce them to hold the wheat.
There is every inducement to a farmer to get the highest price possible from a miller. If a farmer has wheat of first-class quality and succeeds in getting an exceptional price from the miller, a higher price even than the standard price, the subsidy will still be available for him. Then there is the case of the farmer who grows a low quality wheat and who gets a low price. The farmer with the low quality wheat may get less than the average price, while the farmer with the better quality wheat will get the standard price. If you can imagine all the farmers combining and entering into an arrangement with the flour millers and fixing a price for wheat, the State might be made to pay substantially more than we anticipate at the moment; but we do not think that is likely. The individual farmer will always have a substantial inducement to get the best price possible and the better the price he gets the higher will be the average price and the lower will be the subsidy payable.
I do not propose to deal with any of the points made from time to time in public speeches, in newspaper reports and newspaper articles about the difficulty of growing wheat here. The Minister for Agriculture will, presumably, answer any criticism on that point, although I think the whole subject has been so debated that there is very little that is new to be said. We have the concrete fact that wheat was grown here. In the year 1847 there were 750,000 acres of wheat grown. That is the first year for which agricultural statistics are available. I know some people get the impression that we are taking the year 1847 because it has some relation to the Famine. That is not so. We are taking it because it is the first year for which we have agricultural statistics for this country. We have also the records of the various bodies responsible for these things, which show that there has been no change in our climate since then. There is the same average amount of rainfall and sunshine. We have also the fact that there have been improved methods of agriculture brought about. We have artificial manures and a number of other advantages which the farmers in 1847 had not got. We have also the fact that the farmers in 1847 got an average yield of 16 cwts. per acre, which is much higher than the average yield in Canada, France or Germany to-day. We can, I think, anticipate that farmers at the present day will be able to get a higher average yield with the improved methods of agriculture now available.
Wheat can be grown successfully in this country, and it is our belief that the only inducement which the farmer requires to grow wheat on a much more extensive scale is the advantage of knowing that a market for his wheat exists and that he will be able to ascertain in advance what price he is likely to get for it. A guaranteed market is much more important than a guaranteed price, but we are proposing to give him both. In the immediate past the farmer had no certainty if he sowed wheat that he could turn it into cash and he had no opportunity of foreseeing what amount of cash he was likely to get, because the price of wheat in recent years has been falling very rapidly. It has fallen to such an extent that the Canadian Government has recently had to resort to a scheme for the subsidisation of wheat production.
The position is that if wheat is not grown, then there is no harm done. No subsidy will be paid and we will be just exactly as we were. If wheat is grown to any substantial extent, although it will involve the State in the payment of the subsidy it will also mean increased employment on the land and a much better utilisation of the land from the national point of view. It will also mean a substantial diminution of what is probably the largest single item on our import list. We spend approximately £7,000,000 upon wheat and flour. Assuming flour imports cease, we can anticipate a substantial increase in wheat imports during the next few years until we can get to the point where that import will begin to diminish with the increased production of wheat here. I do not know if any of us will see the day when we will be able to supply entirely our home requirements, but we can get a considerable way along that road with definite advantage to the nation.
There are other sections which can be more usefully discussed on the Committee Stage, because they relate entirely to the details and the machinery. There is, however, one provision which must be dealt with and that is the part of the Bill which requires that when any maize meal mixture is offered for sale there must be contained in it a stated quantity of home-grown cereals. There is a prohibition on the sale of maize and maize meal and it is intended that those who grow oats and barley will also be given some security as regards a market, although they are not getting the same guarantee as regards price that the grower of wheat will obtain. The purpose of the Bill is to ensure a guaranteed market and also to make a start upon the substitution of home-grown grain for imported cereals for the feeding of stock. There is a very large annual sum exported for maize and it is, I think, generally admitted by all those who claim to talk as experts in the matter that to a great extent maize can be substituted with advantage by the native grain. The means of getting to that end proposed in this Bill is the compulsory admixture scheme. Other devices are, of course, feasible or conceivable but this is the one that appeared to us less likely to cause any dislocation and most likely to produce the result desired.
There is also a provision in the Bill which has aroused some comment and with which it is necessary to deal. That is contained in Part VII, which provides that under certain circumstances the Minister for Industry and Commerce may acquire and operate a flour mill and that the Minister for Agriculture may acquire and operate a maize mill. It is not anticipated that the powers conferred by that part of the Bill will have to be called upon at any time. They are merely provided by way of safeguard. It is conceivable that, in some eventuality, the flour millers of the State might decide to cease milling flour and leave us in the position of having to depend entirely on outside sources, which might not be able to supply our requirements. It is obvious that there must be authority in somebody to come in and work the mills in those circumstances for the benefit of the people. Apart from that consideration, special circumstances may arise in particular districts which may make the conferring of that power upon the Minister desirable. It is intended more as a deterrent than anything else and, as I said, it is not anticipated that the power will have to be used. I, for one, sincerely hope that the circumstances under which it would have to be used will never arise. These are the main features of the Bill. It is, undoubtedly, a major measure but it is one which must have been anticipated as soon as the result of the General Election was known. I think that quite a number of farmers proceeded to take the necessary steps in anticipation of the introduction of this measure as soon as the change of Government took place. The Party composing the present Government had been advocating a proposal of this kind for some years and had committed itself to embarking upon such a scheme. We think that it will be found by experience that this is a policy which is desirable in every way. If it is successful—and we must all hope, even those amongst us who are doubtful, that it will be a success—it will effect a very considerable change in the life of the country. It will mean that the land will be utilised in the production of wealth to a greater extent than heretofore, that much more employment will be given upon the land, that the necessity we are now under of exporting a large quantity of agricultural produce in order to pay the importation of a smaller quantity of agricultural produce will have been removed and, consequently, that there will be a substantial increase the standard of living of our people.
It may be that our hopes are unduly optimistic. It may be that those who have been taking the pessimistic line will prove to be right. But, in that event, as I have pointed out, this Bill will do no harm. It can only do good and we, on our part, have no doubt as to what the results will be. There is already an indication that it is likely to be a success. We anticipate that some 65,000 acres of wheat will be grown this year. That figure is based upon reports received in the Department of Agriculture from their inspectors throughout the country. That, as a start, is not too bad. It represents an increase of substantially more than one hundred per cent. on the acreage.
In the present financial year, it is anticipated that the cost of operating the Bill will not be very heavy. In a full year, the cost of the additional staff required for the operation of the measure has been estimated at about £5,500. In the present year, only about £1,800 will be expended under that head. In the year 1933-34, it is anticipated that the wheat subsidy will amount to £120,000. It will, of course, vary from year to year with the quantity of wheat grown.