Seanad Éireann díospóireacht -
Wednesday, 9 Jul 1941

Vol. 25 No. 18

Co-Operative Ownership of Creameries—Motion.

Mr. Baxter

I move:—

That the Seanad is of opinion that the Government should take immediate steps to complete the purchase and transfer to co-operative ownership of all existing proprietary creameries, including those managed by the Dairy Disposal Company, Ltd., with a view to the more effective regulation and control of the dairying industry.

It is not possible to discuss this motion at any great length, and I do not propose to delay the House for any considerable period in what I have got to say. There can, however, be no discussion of this motion at all without taking into consideration the wider implications of the co-operative movement as a whole. I should like to say at the outset in moving the motion, that I am fortunate in dealing with a Minister who, throughout his association with the Ministry of Agriculture or the industry of agriculture, has given definite proof of his sympathy for the co-operative movement, and has shown a recognition of the work it has done, the value of it, and the necessity for it amongst the farming community. In suggesting that the Government should take immediate steps to complete the purchase and transfer of the creameries that are still in the possession of proprietary companies as well as those managed by the Dairy Disposal Company, I appreciate the fact that I am raising a number of problems that cannot be solved, right away, and that many questions can be put to me which I am not at the moment competent to answer.

I have come to the conclusion—in fact I never had any other point of view—that the co-operative movement in this country despite its many critics, taking into account the difficulties through which it has passed and the obstacles in its path at the time of its establishment, has grown into a wonderful institution and I often wonder what agricultural Ireland would be like to-day but for its existence. I think that all who have had association with it should be very proud of its achievement. It can be truthfully said that it has built up as fine a business institution as can be found inside the country or outside it, despite the many obstacles it has had to face and overcome. I think that it is also true to say that we have reached a stage now when we must make up our minds in regard to the future, whether the co-operative movement is to be kept on and, so to speak, to cultivate new fields or whether we are to accept the point of view that it has grown to its full stature and that nothing more is possible by way of new achievement for it.

I do not accept the latter point of view at all. I believe that the fuller development of the co-operative movement is essential to progressive agriculture in Ireland. I believe that a great many of our most progressive farmers are children of the co-operative movement. They have grown to manhood in an atmosphere in which they were nurtured in co-operative ideals and the great bulk of the most successful farmers we have got in the country are men who have been brought up in the co-operative school of thought. I think that the success and progress of the farming community in future are dependent to a very great extent on the continued growth and expansion of the co-operative movement, on a fuller and more complete development than we have yet seen.

I believe that we have reached a stage now when we must take stock of what we have accomplished so far to see what we are going to do with regard to the future. Now, the co-operative movement has critics I know. There are critics of it in the co-operative movement itself and there are a great many outside it. There were a great many in the country who were very fearful of it and the consequence when the movement was initiated away back in the 90's, but the fruits that have been reaped from the activities of the early co-operators must be applauded by all, even by the critics of those days. And if we accept that dairy farming in this country could never have survived without the bringing into existence of and the progress of the co-operative movement it obviously follows that the measure of success we achieve in the future is to a great extent contingent on the continued development of that movement.

We have to admit that for a number of years we cannot point out with truth that there has been that development of co-operation which most of us would like to have seen. Back in 1927, in the days of the predecessor of the present Minister for Agriculture, it was found necessary to introduce an Act we might say, to rationalise the dairying industry. Now it would be rather interesting to go back to the atmosphere of those days and look at the point of view expressed by the Minister who found it necessary in 1927 to introduce a Co-operative Act or Creamery Act as we call it. He told the Dáil that amongst the reasons that urged him to introduce it was that intense competition between proprietaries and co-operatives for milk supply was making the position of the creamery industry as a whole impossible.

The Minister of that day said:—

"The extreme case is where a co-operative and a proprietary central are situate in the same district practically alongside each other, and where each has anything from three to ten auxiliaries existing side by side with those of its competitor, all competing for the same milk supplies. This is not uncommon; while in other districts there are co-operative and proprietary groups touching and competing with each other at various points. This is always the position where there is a proprietorial and co-operative competition. When a proprietary creamery is operating without co-operative competition, the temptation to give what will be regarded by farmers as poor prices for milk is overwhelming, and rightly or wrongly, farmers spurred on by the example of co-operative creameries in other dis tricts will always insist on erecting creameries themselves, so as to provide an alternative outlet for their milk supplies. In this way, as long as there are both proprietary and co-operative creameries in the same province, there always will be redundancy. Redundancy means increased overhead expenses, and the exact position at the moment in the districts where proprietary and co-operative competition is going on is that the farmers of these districts are paying always twice, and often three times the overhead expenses that are required for efficient production."

He went on to indicate what the position was:

"In every agricultural country in Europe and America farmers' organisations were provided with suitable credits, and from a very early stage their developments were guided by co-operative legislation. Here they were left without either. It used to be the fashion here to talk loosely about the inefficiency of farmers and farmers' organisation. Everybody heard of a few co-operative creameries that failed, and sweeping deductions were drawn from these comparatively few failures, very much to the discredit of the industry as a whole. The fact is that the existence, in spite of all the disadvantages, of 400 co-operative creameries out of a total of 580 is an extraordinary tesimony to the pioneer work of the I.A.O.S., and to the capacity and loyalty of the Irish farmers. In no other country had farmers' organisation to grapple unaided with the same difficulties, and they are entitled to ask from the State now the facilities which have been refused them for so long."

Following the introduction of the Act there was to be another Act called the Co-operative Act in which he was to have the co-operative creameries affiliated to one central body and in addition there was to be introduced another Act that would enable them to find credit. Other things happened in 1927 and here we are now in 1941. In 1927 out of 580, there were 400 co-operative creameries. To-day the position is that we have approximately 450 co-operatives, 21 proprietary concerns, and in the hands of the Dairy Disposal Company we have 18 centrals and 106 branches approximately, so that the position after almost 14 years is that we have a co-operative movement with about 50 added to the number. We have outside the co-operative movement this other large group in the hands of the Dairy Disposal Company and 21 creameries in the hands of proprietaries. Now if it is asked why more progress has not been made by the co-operative movement— the people who put that question are frequently blind to the progress that was made up to the year 1921 or 1922 and blind to some of the progress that was made up to the year 1932 or 1933 —I think the true answer is that the co-operative movement is in an impossible position.

Dairying is the foundation of Irish agriculture and side by side with our co-operative creameries all over we have creameries in the hands of proprietaries and these other concerns in the hands of the Dairy Disposal Company. The net result is that we have never been able to get that strength collected under the banner of co-operation which is essential to the progress of the co-operative movement and the bettering of conditions for Irish farming. The number, undoubtedly, is smaller, but the conditions are just as they were then. There is a co-operative creamery, perhaps, on one side of the road and a proprietary concern on the other, both plying in the same area for a supply of milk which is just adequate to keep one creamery working efficiently. The overhead expenses, obviously, on the farmers are much greater than they ought to be; the price of milk to the farmer is correspondingly low. The co-operative movement is suffering from the depression of intense competition which it should not have to face. The co-operative spirit, generally, cannot prosper and grow strong and go on to further development under such crippling conditions. That is the fact with regard to the undoubtedly limited number of proprietary concerns. I think it is true to say that a number of the co-operative creameries in these areas have for long been prepared to purchase these concerns but somehow it has not been possible for the co-operatives to get possession of them. If the milk which at present is supplied to the proprietary concerns were passed over to the co-operative creameries, the net result would be a better price for milk, lower working expenses and a cheerier tone in farming circles in these areas generally.

With regard to the Dairy Disposal Company, that, I know, is a much more difficult proposition, but there are, I think, reasons why this problem has to be faced up to and tackled in a way which, up to the present, anyhow, we have not given evidence that we were prepared to try in order to solve the situation. Until the problem is solved satisfactorily it is going to leave the co-operative movement a very unfinished project in this country. It is interesting to refer to the point of view of the late Minister for Agriculture in reference to the policy of the transference of the creameries from the old Newmarket Dairy Company, which was then to be a holding body, and which has since grown into this Dairy Disposals Board and Dairy Disposal Company. To-day, as we all see it, it is very largely a Government concern, run by men—competent and able, no doubt; I am not questioning that at all—but whom we regard as civil servants. I think from the point of view of the State, that policy was thoroughly unsound and very dangerous. This is what the late Minister for Agriculture said with regard to what his intention was:

"I hope that nobody will make the mistake of regarding this transaction as the beginnings of a policy under which the Government proposes to run the creameries of the country. The exact contrary is the fact. The purchase of these creameries has no justification other than it is a necessary preliminary to the efficient working of the Agricultural Credit Corporation and the Co-operative Act. The Co-operative Act will regulate and define the conditions under which existing societies may operate, and new societies be established."

That was the point of view expressed by the then Minister for Agriculture. I was a member of the Oireachtas at the time that measure was going through. All of us believed, when that statement was made by the late Mr. Hogan, that five years, at the outside limit, would be a sufficient period to enable the transfer from these creameries to co-operative ownership to take place. I think it is true to say that no progress whatever has been made in that direction nor is there any evidence of any possible progress in the near future towards that end. Those of us who pin our faith to a wider development of the co-operative movement see no possibility whatever of that wider development until the organisation under the aegis and control of the Dairy Disposal Company and those other organisations in the hands of proprietors are transferred from these authorities to the ownership and control of farmers in the co-operative movement.

I realise, of course, the difficulties and the complexities that face the Ministry of Agriculture in attempting this but I suggest to the Minister that the first step in this country towards putting the dairying industry on a sound basis is the introduction and passing of a Co-operative Act, making it obligatory on every co-operative concern in the country to be affiliated to one central organisation, putting the responsibility then on all these co-operators to do, if the necessity arises, what the Dairy Disposal Company have had to do in certain districts in the country. The unfortunate position that a number of our co-operative creameries is confronted with in certain areas is that, in their relations with the Dairy Disposal Company they are in an exactly similar position to that which they formerly occupied in relation to the old Newmarket Dairy Company, or Cleeve's. It is true to say that while under the Creamery Act and regulations made under that Act, all our creameries are prevented from doing certain things, the Dairy Disposal Company, that ought to be bound by these regulations like any co-operative creamery, is in fact in certain districts going outside the regulations, breaking the regulations, and doing what a co-operative creamery cannot do. One of the regulations is that a creamery cannot take from another creamery a supplier who passed over to that creamery from one of the redundant creameries because in fact the redundant creamery was bought and paid for by these co-operatives and there was an obligation on that farmer to put up a certain amount of share capital. A long loan, no doubt, was the means by which this was done, but while the co-operative movement and the co-operative creameries are prevented, and have been prosecuted in some instances for breaking these regulations, there are instances where the Dairy Disposal Company are actually accepting milk from suppliers of transferred creameries which they are not under the law entitled to do.

It is suggested, too, that in certain other districts the Dairy Disposal Company, where they are in competition with co-operative creameries—and they are in competition with co-operative creameries in certain districts in the country—are in fact paying higher prices in those districts than they are paying in other districts in the country where they are not in competition with co-operative creameries. I think all that is very tragic. In fact, from my point of view, it is disastrous for what we have all come to look upon as a semi-State organisation to be in the position of paying farmers a certain price for milk in one district and paying them a lower price for milk in another district. There is not that equity about that transaction which we would like to feel would be the dominant consideration in a semi-State organisation or in any commercial organisation, in its relations with those with whom it carries on trade. But, there is something more about it. I am not disputing the fact that you had to have the holding body, the Dairy Disposal Board, brought into existence to take over and to transfer these creameries, but I say that while it was essential as a medium to do a certain job, its existence as a trading organisation in the dairying industry to-day has the effect of paralysing the movement to a degree which is not at all being appreciated. Unless we can make up our minds that we are going to build up the co-operative movement as the biggest instrument the farmers have created, and the biggest instrument for the welfare of the farmers, we are preventing that development by the existence of this semi-State trading body which, to say the least of it, we have no reason to believe is in any way sympathetic to the interests of co-operators.

We are satisfied there is criticism of the co-operative movement in the existence of the Dairy Disposal Company for so long, but there is the other consideration as well. The law provided that our transferred milk suppliers to co-operative creameries were obliged to subscribe capital to the creamery by which they were taken over. A loan was raised, no doubt, to enable this to be done, but there is no evidence that the same law applies as regards the creameries that are being operated under the Dairy Disposal Company or that the same obligation has to be borne by the farmer-supplier to this institution at all. Now, you cannot have one regulation for a farmer going to a co-operative creamery and another for a farmer going to a proprietary creamery or a Dairy Disposal Company's creamery, and believe at the same time that the co-operative movement can go on to further strength under these conditions. I believe we have reached the point when we have got to make up our minds whether this institution is to continue as an essential element in the dairying industry in this country or whether something else is to be done with it. At the moment, if one might make any criticism, one might say that instead of the co-operative creameries getting possession of these creameries, as it was anticipated they would, a certain number of the co-operative creameries have, in fact, gone over to the Dairy Disposal Company. I know that there were reasons for that. I can be asked what could be done if the Disposal Company was not there, but I will put this to the Minister, that his policy in the matter ought to be the immediate introduction of a Co-operative Bill, putting the obligation on every co-operative creamery to come into a federation or organisation where they would, so to speak, be under a vocational scheme organised, controlled and managed as a branch of the industry. If there were lame dogs inside that vocational scheme, they would have to be helped along. Let the whole organisation help them along, let them bear the cost and responsibilities of guiding, helping, controlling and managing their business, until they have grown to manhood's estate and can manage it for themselves.

If a Co-operative Bill had been introduced immediately after the passing into law of the Creameries Act, the position would be entirely different to-day. The creameries concerned would now be able to manage for themselves. The Department would have been able, as it ought to have been able, to put the responsibility on the co-operative movement to manage their business as co-operative creameries in districts where their competence and experience might justify them in believing they were able to do it efficiently for themselves. We have proof and evidence in the co-operative movement of the business ability and capacity of our committees to look after their affairs successfully, and from what we know of them, it cannot be alleged against the movement as a whole that they are not capable of doing much more for the industry generally than has been done up to the present. They have conquered and won in certain territories. Some of them will have to win against intense competition, and win in development even when the competition has passed away. They have given ample evidence of greater efficiency than any proprietary concern or the Dairy Disposal Company can show. I have not the slightest doubt that, in the areas where creameries have passed out of existence and under the control of the Dairy Disposal Board, these creameries could have been managed efficiently by a co-operative federation, if that were established under and in accordance with law, where all men in the co-operative movement would have obligations and responsibilities which they could not evade or avoid. I believe that in the bigger area being operated by the Dairy Disposal Board in Clare the same thing would apply.

The time has come now when we must make up our minds as to whether the present position will be stabilised for years to come, or whether we are to do something else. I urge on the Minister that the time is ripe. In the days when the Creamery Act was being passed through the House there was goodwill from all sides. The Minister got help, assistance and co-operation. He was spending a great deal of money belonging to the State, but he was doing the right thing and was saving thousands of farmers from bankruptcy and from being smashed by competition that was financed partly outside the country and partly within it. He was saving them from the consequences of being smashed by the trading organisation and from the depression that would inevitably follow. It was deemed wise and right in those days to spend the State's money and it would appear, to a certain extent, in our time to be almost revolutionary, but had not that been done what would be the condition in the dairying industry where these concerns operate? We went so far on the road: are we going to continue the advance or be satisfied with the present position for another ten years? I do not think we can be satisfied.

In certain creamery districts there is intense feeling, which I know is restricted, as the area is somewhat smaller than it was. The feelings are not just what they were in the old days. Nevertheless, there were a number of creameries affected and there were difficulties which had to be solved. An immediate solution is necessary. The first consideration in my mind is in regard to the Dairy Disposal Board, and it is that it is obviously wrong to have a semi-State organisation like that in trade without that responsibility on the part of its officials which those engaged in a co-operative or an ordinary concern would have to the committee of management. You have a certain number of unquestionably competent people, but there is the State behind it and the State's finances have been drawn on to keep it working. To what extent these finances have been drawn on I do not know, but that is something which the country would like to know. In itself, that position is unsound. If the Minister regarded it as essential for the whole future of the dairying industry that that institution should continue, it would be better to set up something like the Electricity Supply Board or the Agricultural Credit Corporation and make annual grants to keep it in operation, rather than continue the present conditions. The more quickly the Minister extracts himself and the State from connection with that sort of business the better, and the more sound it will be for the State as a whole.

In addition, we must make up our minds that the further growth and development of the co-operative movement is positively essential to agricultural progress. In order to get strength, every creamery and dairying organisation should be brought within the folds of the co-operative movement and whatever steps are necessary towards that end should be taken by the Minister. I know that much of the State's money is locked up in the Dairy Disposal Board. To have that work passed over to the farmer to do is an obligation which, perhaps, some farmers are not prepared to accept voluntarily. However, I believe that ultimately it would be better to impose the obligation on the farmer, as the present conditions prevent a general development of farming, which we must have in order to maintain that higher standard which the farmers and the country require.

Action must be taken with regard to finance, to enable the farmers to become the owners of the creamery organisations at present operating in the territory managed by the Dairy Disposal Board. I do not think that creates any problem at all. These creameries, in the hands of farmers and of men whom the farmers will put into the work of management—and probably they are many of the men managing them to-day—will be just as efficient as they are at the moment. There will be the added advantage that, for the first time in the country's history, the dairy industry as a whole will be co-operatively owned. Steps can be taken then to bring into operation the Co-operative Bill which has been promised for some 15 years or more. Under that Bill, every unit of the co-operative movement will be brought into a federated organisation where all will have their obligations, responsibilities and rights. Then you will have taken the first steps towards putting the co-operative movement in a position when it will be able to cultivate new fields. There is no doubt whatever that but for the existence of this sort of competition and but for the struggle and fight waged by a great many farmers, the constructive work done in these areas by the co-operative concerns could not have been attempted.

I suggest that the time is ripe now for the Minister to tell the country not alone what he will do but that he will do it. No doubt there would be certain objections to the changes in the present position from certain interested parties in certain areas. Politically, it will not bring the Minister any great kudos. I know it did not bring his predecessor any considerable support, but that did not deter him from doing what he thought right. In a question like this, where I believe the interests of the agricultural industry as a whole are so bound up with the development of the co-operative movement, we must do the right thing, regardless of the individual interests that will be affected by it. The Minister could be busy day after day hearing from deputations as to why farmers should not be asked to take over these responsibilities. What hope is there for a country or a people not prepared to shoulder responsibility? One cannot have any great respect for a group of men who will go to a Minister, a Deputy or a Senator and say they do not want to take this on or that they are not competent. I do not know whether some of them would urge that they are not competent. There has been evidence of incompetence and failure, but there is overwhelming evidence of competence and success, and this can be pointed out.

If we are to make our people what we would like them to be, we must put responsibility on them in local districts around their own homes, and teach them to build up in their own parishes and local areas that kind of organisation and those institutions which are the factors in social and economic life that can help in economic development and social progress. That can be a medium for educating and strengthening them economically and helping the industry on to better times. If there are men who plead they do not want this done, and do not wish to take on the financial obligations which it entails, one answer is that, in more difficult days, in days when farmers were more poverty-stricken than they are to-day, the pioneers of the co-operative movement went out and put their money and their faith into the work of building creameries where, in many cases, there was poor land and poor prospects. They are proud of that to-day, and their sons are proud of it. If these people are not prepared to do what others attempted in more difficult times, it is our obligation to teach them to have more confidence in themselves. If the obligation is put on them, I believe they would be astonished at what they can do; and when they have discovered their own strength and capacity to do these things and the pleasure that ownership gives and can give—whether it be ownership in full or in part—in successful commercial institutions, the seed will have been sown which will produce good fruit. New developments will take place in those districts, which never would be attempted under the conditions which exist to-day. While those conditions exist, one cannot hope for real progress in agriculture.

As I said earlier, I realise that there are many difficulties confronting the Minister, if he is prepared to do this. One or two questions which the Minister should put to himself are: Did the late Mr. Hogan do the right thing when he introduced this first Act? Should the work which he started be completed or not? If it be not completed, are we to be content to leave things as they are, and what will the consequences be? Few will disagree with the statement that the late Mr. Hogan was right, that his aim was right and that, had he not done as he did, conditions would be very different to-day in many of our dairying industries. The Minister will have obstacles to surmount and difficulties to contend with, even from his friends. However, he has pursued this policy and I have no reason to doubt—and I have no evidence—that his policy was not the same as his predecessors in relation to the co-operative movement. If he is prepared to pursue this policy, he will have the backing of very many people and will win the admiration of a great many people who, perhaps, to-day are rather lukewarm towards such a proposition.

He also will inculcate in districts where the standard of citizenship is not as high as it should be, a new outlook on life and a new approach to problems. In this respect there is an obligation on him, and on everyone who can help him, to try to inculcate a better understanding of true citizenship than exists in many places at the moment. The atmosphere and conditions in many parts of the country at the present time are favourable for such an attempt as this. We cannot stay put, we must go on to new things and make new efforts. In a way, this is not a new effort, but the completion of work begun by somebody else. It should be completed by the man who succeeded Mr. Hogan in the Department of Agriculture. If the Minister tells the House and the country that he will go on with this and put the co-operative movement into practice by completing the transfer of all these creameries and by the introduction and passing of a Co-operative Bill, the Minister will have left, when he passes out, a monument to his efforts that will last and an Act that will, through its operation, enable the farmers to do a great many things for themselves which they are expecting him and the Department officials to do for them at the moment. I am conscious in a way, of my incapacity to deal with this problem in the manner which I should like. I am not as intimate with it as are a number of the southern representatives but I have heard a great deal about it over many years. I know that it is a difficult problem but it is one of the problems which ought to be tackled and solved. I believe that the time to do that is now and I hope the House will accept the motion.

Mr. O'Dwyer

I second the motion and I reserve my remarks until later.

Mr. MacCabe

I am a strong supporter of the proposal that the farmers should get control of these co-operative creameries. The first step to be taken should be to organise the farmers in the areas where the Dairy Disposal Company functions and where the proprietary creameries function. If the farmers are prepared to foot the bill and are anxious that the creameries should be handed over, I think that it would be only right and just that the Government should give them every facility and hand them over. At the same time, they should understand their responsibility. They should educate themselves as regards the requirements and they should realise that they would have a heavy responsibility in taking over the creameries, especially at this stage. I would suggest that the baby should be left with the Government during the war. From my experience of the farmers, they are not in a position, unfortunately, to get cash from either the banks or the Agricultural Credit Corporation. If they feel that they are getting a fair return for the milk supplied to the creameries of the Dairy Disposal Company and the proprietary creameries, I am sure they are quite willing to accept that and have no further responsibility. At the same time, I do not agree that it is fair that any body but the farmers should own the creameries. If the Government could see its way to hand over these creameries at a reasonable price, I am sure everybody in this House, and outside it, would encourage the farmers to take control of their own affairs.

Mr. Counihan

I know very little about the dairying organisation but, listening to Senator Baxter, I thought he made a very convincing case for this motion. The only reason I rise is to put a few questions to Senator Baxter which would help me to support this motion. I should like to know what demand there is from the farmers supplying the Dairy Disposal Company and if they are willing to scrap that company and go into a co-operative organisation. Then, what about the independent co-operative people? Are they satisfied to go in and work with the others? What about the proprietary creameries? Are they satisfied? If there is any demand from the farmers who are suppliers to these creameries, I think that the Minister should have no hesitation in accepting the motion put down by Senator Baxter. As one who supported the late Minister for Agriculture in establishing the Dairy Disposal Board, I have been assured by many competent persons since that it is working very well.

Senator Baxter suggested that, if this could not be done, some authority such as the Electricity Supply Board should be set up. I should like to know from Senator Baxter what objection he has to making the Dairy Disposal Company the sole authority. They must have a great deal of experience by now, and they must have acquired a lot of knowledge from that experience. Why not constitute them the sole authority for managing the organisation which it is proposed to set up? I am not completely convinced that this co-operative business is the wonderful success Senator Baxter makes it out to be, except you have competent managers. Still, I think he has made a very strong case, which should be given careful consideration by the Minister and his Department. I should like to hear what the Minister has to say before supporting or opposing the motion.

Mr. Colbert

I should like to mention a few points in supporting this motion. As Senator Baxter pointed out, all Parties in the Dáil agreed in 1927 that complete control of the dairying industry should be placed in the hands of the farmers themselves. The working of that Act was made pretty difficult by reason of the fact that some of the concerns refused to sell. I know of one large co-operative concern in West Cork which, owing to the position of the proprietary concerns, were not able to issue a single share. The competition provided by the proprietary concern put them in a certain difficulty. The suppliers were able to take their supplies over to the proprietary concern. In fact, in this case, the proprietary concern carted the milk free of charge for the farmers and even went so far as to take the suppliers' children to school. Last year 2,000 gallons of milk were taken by this particular concern and that is still happening. The peculiar feature of this case is that the co-operative concern has been paying a higher price for milk than the proprietary concern. One might ask how it is then that suppliers are not transferring their supplies to the co-operative concern? So far as one can learn, a certain number of these suppliers are "tied" and, in other cases where the people are not tied, a higher price is being paid. That sort of competition is bad for the dairying industry as a whole. We have had too much cut-throat competition already.

I know cases where agents of creameries at one time took their supplies across Channel in order to undercut creameries in the market across the way. This form of competition to-day is somewhat similar and it is very bad for the dairying industry. People may say that competition is the life of trade, but I do not think that that applies in the case of dairying. In the case of the proprietary concerns, the profits go entirely into the pockets of the owners, whereas, in the case of the co-operative concerns, the profits are distributed amongst the suppliers.

As regards the part of the motion dealing with the transfer of the creameries under the Dairy Disposal Company, I am not sure that that is a feasible proposition at the present time. In certain areas these creameries are necessary in order further to develop the industry and I would be more inclined to let that side of the question stand aside for a moment.

We know that large sums have been expended in the purchase of private concerns such as Cleeve's and others and until the job is completed the whole aim of the 1928 Act will not have been achieved. I would urge on the Minister if possible to complete the purchase of these creameries under the 1928 Act. They are comparatively few in number now but where they exist they are certainly detrimental to the success of the co-operative creameries. At the present time everything possible should be done to help the dairying industry. It is in a bad way and unless something can be done to help the creameries there is grave danger that a great number of them will go out of production altogether. It is not perhaps generally known, but I am in possession of statistics to prove it, that in the dairying counties more employment is given per acre than in the tillage areas. Dairying is the foundation of our agricultural economy in this country. It is responsible for the maintenance of the balance of trade with our friends across the water— formerly the store cattle trade and now the fat cattle and dead meat trade. If dairying goes down there will not be very many cattle in the country. I should like to see a guaranteed minimum price for the producer of milk similar to the guaranteed prices given for crops in the tillage areas. I would urge the Minister to give this matter his close attention and to see what can be done to bring about an improvement in the industry.

Mr. Madden

I came into the House with a perfectly open mind on this matter, but I have been absolutely convinced by the very excellent review of the situation made by Senator Baxter. I think it was in 1927 that at a meeting held in Jury's Hotel, a large and representative meeting of farmers from the Twenty-Six Counties, a remarkable speech was made by the Taoiseach. Amongst some of the remarks which he made, there was one to the effect that when agriculture was prosperous that prosperity was reflected in every sphere of national activity and that when agriculture was depressed that depression was to be observed in every avenue of our industrial and commercial life. It is admitted that about 60 per cent. of the people of this country get their living directly or indirectly from the land, so that the aim of the Oireachtas should be all the time to see that agriculture is made as prosperous as possible. I was much impressed by Senator Baxter's speech, and I feel with him that the development of the co-operative movement in relation to agriculture should get all the encouragement possible in this and the other House. I come from a dairy county—one of the best in the country. Speaking again from memory, I think we have 48 creameries with some auxiliaries. The industry is, in the main, directed under the co-operative system with unquestionable success by the farmers themselves.

What were the conditions prevailing before 1927? Having been on a committee of one of the creameries I can speak with personal knowledge of my own town of Rathkeale. There were two creameries at the end of the town, one on one side of the river and another at the other side. A mile away in one direction there was a third creamery and two miles away in the other direction a fourth. There you had four creameries operating practically in the one parish, carrying on a ruinous competition which could be inimical only to the development of the industry. I knew of farmers in those days waiting with anxious eyes for the post for their cheques or sending their boys to the creamery to get the cheques. The shopkeeper in return was depending on the farmer to pay him for goods supplied with these cheques. The farmers took these cheques as soon as they received them to some of us who were in business and when the cheques were presented they were dishonoured in the bank. Was that not an appalling state of things? The position of the farmers running these creameries was such that they could not obtain an overdraft in the bank. At the same time they were facing competition from countries such as Denmark and New Zealand which had been scientifically organised and they were being economically strangled. It was then that the late Minister for Agriculture, realising, with a vision that has been amply justified by the passage of time, that this state of affairs could not continue, was compelled to intervene. It was damn good business on his part but it was bad politics. The Cumann nGaedeal Government however did not mind about the political effect; they went out and did the right thing. It was an unpopular thing in many areas and I remember being hunted off the platform when I went out to speak with some Deputies in certain areas because of that Act which stabilised the whole dairying industry of the country. The courage and the initiative which inspired that Act have been amply vindicated since.

We have in my own county, as I have stated, 48 creameries which are second to none in the world. They are even able to give banking accommodation to many farmers because I know from my own experience as a member of the county council that many of the cheques that come into the county council from farmers are accommodation cheques that have been paid by the managers of these co-operative concerns to help to relieve struggling farmers when they have found themselves in financial difficulties during the last seven or eight years. I have received many of these cheques from farmers in connection with my business as auctioneer. I say that the co-operative system has justified itself as a unit of this State from my experience, and, if that is so, it ought to be ample and complete justification for the present Minister who has sympathy with the condition of agriculture and whose desire is to try and relieve it from the economic depression under which we are living. It is very serious and that is one of the reasons why I intervened. I remember when Cleeves' had one of these auxiliaries in close proximity to the co-operative and they gave an increased price there, but where such opposition did not exist they gave the normal price or perhaps a little below it. Senator Baxter said that this semi-State organisation was adopting methods something like those which created the Act of 1927. If that is so I say it is the paramount duty of the Minister to seize the opportunity to end that and to do what his predecessor did seeing that it has been since vindicated. Somebody asked if Mr. Hogan did the right thing. He did. It was unpopular but it has been vindicated by the wonderful achievements and by the economic stability that has been established in the counties wherein it operated. Should it continue? It should. I support Senator Baxter and I appeal to the Minister to complete the work. If he does that he will be doing good work and will leave behind an enduring monument of appreciation from the agricultural community.

Mr. Corkery

In the county I come from we had a good many co-operative and proprietary creameries and they had to be taken over when the Dairy Disposal Board came in. Every man in public life had to go on committees and go to bank managers to try and get the co-operative societies out of their liabilities to banks. The Dairy Disposal Board had to put up the balance of the money. If these creameries are to be handed over again the farmers should know the responsibility they are taking on. I do not know whether any of the farmers who were through the mill before would agree if they were asked to have these creameries taken over. The Dairy Disposal Company are interested in their own work and the managers are responsible to them. The company should know their business, and the managers are responsible for having the work done properly. Farmers have not the training for running creameries. Farming is an entirely different occupation to running a creamery. Senator Baxter may smile at that, but in a good many of the co-operative creameries the principal members of the committee are professional men, clergymen, school-masters and others who have no personal interest in the industry. Only people like Senator Baxter and myself are interested to see that there are supplies of milk. Now in West Cork the dairy industry is only a very small part of the co-operative movement, I mean the co-operative stores as we call them. In business it would be looked upon as a side-line. This co-operative movement which has got so much praise from all the Senators should, I think, be very carefully examined. I and everybody else would like to see dairying in a good firm position, but the handing over of the industry to "the co-ops," which have an entirely different and bigger business to look after, is another matter. Their business ranges from selling everything from a needle to an anchor. They supply the children with sweets, the dying with habits, the dead with coffins.

Mr. Baxter

And they are making on it?

Mr. Corkery

They are.

Mr. Baxter

Then are not they good businessmen?

Mr. Corkery

They are, but at the same time they are putting a few others out of business. The whole question should be very carefully examined and I suggest to the Minister that if the co-operative societies were put in the position of looking after the dairying industry if it can be managed, and looked after by them, and if they are to go into general business let them compete on fair conditions in any business that they want to go into. At the present time they are in a very favourable position. They have a very fine way of collecting their debts through the milk supply. They do not have to comply with restrictions the ordinary traders have to comply with. They do not always have to pay the same rates of wages and the same hours of work do not apply. All this places them in an altogether favoured position and I am afraid they are paying more attention to business at the present time other than the dairying industry. I know that in the part I come from they are more interested in getting trade. We heard a lot of talk about cut-throat competition and all the rest of it but I have had representations from traders that very good customers of theirs were offered very good terms by creamery managers, and I should like the Minister to examine carefully all that goes under the name co-operation.

Mr. O'Dwyer

I would like to reply to some points that have been raised by some speakers. Senator MacCabe suggested that it would be well to organise the farmers first. He forgets that there was a strong discouragement against farmers taking over creameries, because when they took over previously they had to take over shares, at the rate of £3 to the cow. Those who remained with creameries that the Dairy Disposal Board had to take over, had to take no shares. Naturally in hard times farmers were not in a hurry to change conditions and to go into heavy debt. Naturally, in the hard times that existed for the last nine or ten years, farmers were not in any hurry to change the conditions and to go under heavy debt. There was also some reference made to the difficulties in the way of obtaining money. I am quite sure that point would not arise if the question of price could be settled. If the price was reasonable there would be no difficulty in obtaining money from banks. These creameries are considered very safe and the burden would not be very heavy on the farmers. £3 per cow did not rest so hard on the farmers taken over by the co-operative societies because it was paid in small instalments and the necessary funds to finance the creameries, if taken over by the farmers could be raised in the same way, by instalments spread over a great many years. The question of finance need not deter the taking over nor need the question of organisation be allowed to stand in the way. The farmers have been more or less discouraged from taking them over.

Senator Colbert raised the point that it was necessary to maintain these groups of creameries in order to obtain. the necessary supplies of raw materials for the industries started in connection with them. In Limerick and elsewhere industries in connection with those creameries were taken over by the Dairy Disposal Company and are, I believe, being managed very efficiently. The raw materials were collected from the creameries around the country. There is no reason at all why the co-operative societies, acting together could not run those industries or perhaps they could remain outside the creameries in the take-over and their supply of raw material be arranged for.

Senator Corkery said that farmers have no training for running creameries. I am afraid he has not much experience of creameries. Perhaps the part of the country he comes from is not a good dairy county. Undoubtedly creameries have been started in parts where they never could be successful because it is only where the supply can be kept up that a creamery can be successful. Where creameries have been started in sparsely-populated districts, where the milk had to be brought long distances, they have not been successful. You have not far to look to see what farmers can do. We have the examples of Mitchelstown and of Waterford. There are up to 300 other creameries, nearly all of which were very successful and which are developing from day to day, showing what the farmers can do. Undoubtedly, the managers do a great deal in the development of these creameries but these managers are the sons of farmers.

I am afraid people do not realise the necessity for completing the purchase of the dairies that took place in 1928. They fail to realise the importance of the industry. We should remember that the dairying industry is perhaps the most important in the country. Up to the last few years, the normal export represented a total of £3,000,000 a year and some years before represented over £5,000,000 a year, in addition to the amount consumed at home. The action of the late Minister for Agriculture in wiping out the proprietary creameries and giving an assured supply to the co-operative creameries was a most statesmanlike and far-seeing act, which saved the dairying industry from almost complete destruction. It gave the creameries an assured supply which enabled them to develop and to introduce the necessary machinery to comply with all the requirements of modern hygiene in the production of milk and butter. That, and the payment of an economic price to the farmer, would not have been possible without an assured supply of raw material.

There was another aspect also of the co-operative movement which must have been very apparent to the present Minister during the period of the economic war and during the period of the emergency. He must have realised—as I am sure his predecessor did —how much easier it is for a Government to deal with an industry when it is organised upon a co-operative basis. I am sure the Minister will admit that he had less difficulty in arranging things in the dairying industry, in providing for the payment of bounties, etc., and fixing prices than he had, perhaps, in any of the proprietary industries, because it was organised on a co-operative basis and organised in such a way that the smallest sum given as a subsidy by the central Government was distributed evenly down to the smallest farmer. We must remember also that, not alone here, but practically all over the world, it has been the settled policy of Governments during recent years to develop and encourage the principle of co-operation in agriculture. The great development which we have seen taking place in Danish agriculture was brought about almost entirely by the development of the co-operative movement there. It was the same in Holland and in Belgium. It is the same to-day, I believe, in Canada and in a great portion of the United States of America. The British Government developed its policy of encouraging co-operation some years ago in agriculture and it has always been the settled policy of the Irish Government here. It is very clear that the co-operative movement and co-operative societies, not alone in dairying, but in all other branches, are the only unit by which agriculture can be developed to its fullest extent. That being recognised, there is a clear case for not pausing in the completion of the transfer of all the existing dairies to the co-operative movement. It was the intention of the previous Government that they should all be handed over in a short time to the co-operative movement. It is not the fault of the last Government that difficulties arose which prevented that idea from being carried out in time but there is no reason why it should be delayed any longer.

As Senator Baxter has pointed out, the existence of the two different bodies, the proprietary creameries and the co-operative creameries, in competition with each other, has a very bad effect on the whole movement, and a very bad effect on the farmers in the locality. It prevents the efficient working of all creameries because they cannot be assured of a sufficient supply of raw materials, or, at least, of such a supply as there would be if that competition were removed and if they were all under the one organisation. I am sure that the main difficulty is the question of price, but at the same time, that should not be allowed to stand in the way, because, as we all know, the subsidisation of the dairy industry has entailed a large amount of public money during recent years, and it would not be asking too much from the Government to make a small sacrifice to assist in the transfer of those creameries to the co-operative movement. They were bought at a time when prices were very high and money much more plentiful than it is to-day. Such prices would be prohibitive in the present circumstances owing to the scarcity of money. I do not think that the Government should be so hard on the question of price, but that they should make all the sacrifices possible to help the transfer of those creameries to the farmers.

I do not think that there is very much else which requires to be pointed out, because Senator Baxter has already gone very deeply into the subject, but I should like to assure the Minister that there is a very strong feeling in favour of this transfer and the longer it is delayed the more difficult the situation will become, apart from the bad effect the present position is having on existing co-operative societies. Undoubtedly, there have been cases where co-operative societies have failed, but failures have occurred in every branch of industry and the creamery industry cannot be an exception. In late years, however, the overwhelming majority of the creameries are successful and developing, but there are cases where difficulties have arisen in creamery societies and in ordinary circumstancees if left to themselves, the creameries might have overcome them because where the societies are backed by their members, they cannot go down. But, where there is a Government creamery near at hand, they do not keep up their own creamery, but ask the Government organisation to take them over. That, as I have said, has a very bad effect on the existing co-operative societies, especially on the small ones in the neighbourhood of Government societies.

There is another reason why the Government should be glad to get them off their hands. Nobody likes to see the Government interfering in business and it is not a good thing. I am sure that the reason the Government does not like interfering too much in business is, because, although they may be efficiently managed for a time, you cannot always depend that that will continue. People in cities might think it a natural thing for a Minister for Agriculture to run creameries. What would be said if the Minister for Supplies took over one of the big Dublin drapery establishments and went into competition with its rivals or if the Minister for Finance took over Guinness's brewery and started the manufacture of beer? What an outcry there would be. It is the same as regards the dairies. The farmers are confident that they will be able to run those dairies and the dairying industry in those districts as efficiently as Mitchelstown and Waterford and other creameries are managed.

I would say to the Minister, as it is the general feeling that the time has come when the transfer could take place that nothing could be gained by delaying unduly. I would ask him, therefore, to accept the motion, and to complete the transfer of the creameries concerned as soon as possible.

Minister for Agriculture (Dr. Ryan)

Senator Baxter, in introducing this motion, quoted some extracts from my predecessor, the late Mr. Hogan, when he brought a scheme before the Dáil in 1927 for the acquisition of certain creameries. The Seanad will be familiar, therefore, with the competition that was going on at that time. Other Senators also have spoken on that point here. You had, at that time, fairly common through the country, the cases of proprietary concerns and co-operative creameries, built side by side and competing for the milk, and it was becoming rather an intolerable position. Eventually, it became intolerable for a group of proprietaries too, and they came to the conclusion that they might as well sell out.

Mr. Hogan took advantage of the situation to buy these proprietaries and to try to reorganise the industry. At that time he purchased, on behalf of the State, the Toffee Company at Limerick, the Condensed Milk Company, which ran also a number of sub-condenseries, and also owned Knocklong and Tipperary. He also purchased the Newmarket Dairy Company, which owned three principal groups, Terelton, Coachford and Newmarket. The Disposal Board was formed to take over the proprietaries that came along and a number of proprietaries have been taken on since then. Shortly after that time a new development occurred. I think it was in the following year that the taking over of co-operatives which got into difficulties was begun and that has become rather a big business with the Dairy Disposal Company. A few years after that—I think perhaps that it was not until 1931, that there was the first instance—the Dairy Disposals Company commenced building creameries themselves and developing new centres. The development did not proceed to any great extent until 1935. There you had an organisation set up with the principal object of taking over proprietaries' interests and handing these creameries over to the co-operative. It developed from that after a few years into the position of taking over certain co-operatives and either handing them over to other co-operatives, or reorganising them and getting them into groups that were already held by that body.

The last development was the development of the new districts I spoke of. These companies are still there. That is the Toffee Factory, the Condensed Milk Company, the Newmarket Dairy Company, and the Dairy Disposal Company. They are all managed, however, by one board of directors—three directors who are civil servants—and these directors are nominated by the Minister for Agriculture. The board of directors have a good deal of freedom of action. The day by day business is carried on without any reference to the Department or to the Minister. They are, however, not free for any expenditure of a capital kind. They must get the authority of the Minister for Agriculture, who must in turn get the approval of the Minister for Finance for capital expenditure, but, in their working expenses, they are free to carry on and are in fact free to raise an overdraft in the bank provided they have assets against it, such as raw materials for manufacture or manufactured materials ready for sale. In a way, they are not very different from the Electricity Supply Board.

Senator Baxter thought that we might set up a board similar to the Electricity Supply Board but, so far as I understand it, the Electricity Supply Board has not got much more power than they have got. That board, too, must come to the Minister for Industry and Commerce for sanction for any large capital expenditure. It is true that the companies have been financed by the State, but it is hoped that in time they will recoup the State whatever money they got from it. The moneys have been advanced in the same way by the Department of Agriculture, with the approval of the Minister for Finance, and we have to account for them to the Comptroller and Auditor-General.

Mr. Fitzgerald

In their ordinary working they are not subject to review? They are independent?

Dr. Ryan

Entirely independent. It is only capital expenditure that is subject to sanction. In the beginning, of course, there is no doubt that the late Mr. Hogan visualised this body as an ephemeral body—only here for a short time—and anybody reading his speech on that occasion would see that he had no intention whatever of having this body continued for a long time, but everyone has to change with circumstances. I do not want, and I would certainly dislike, to misrepresent the late Mr. Hogan in any way, but I think the late Mr. Hogan did realise, before he left the Department of Agriculture, that he had changed somewhat, because he had taken over the West Clare group, which was a bigger departure than what was visualised in the beginning. The West Clare group was, after all, a co-operative society, a society that had failed, and which came to the Minister at the time to see if he could do anything to make things right in Clare. He took over that co-operative society or, at least, the. Dairy Disposals Board, with his approval, took it over and developed West Clare from that point.

Some of the proprietaries acquired by the Dairy Disposals Board have proved disappointing, and, consequently, there was a fairly substantial loss in the ordinary trading of the board for some years. That loss was cumulative up to a certain point. As a matter of fact, about 12 months after I took up the position, I introduced a Supplementary Estimate for £112,000 to cover the losses. The loss reached a peak point, and at that time it was £136,000. From 1933 the trading loss, taking all the companies together, changed over to a profit; and now, at the end of 1940, we find that a trading loss of £136,000 has been wiped out completely, and we have a profit on the trading over the 14 years of £13,000.

If we pause for a moment, I think that every Senator will agree that the Dairy Disposals Board did very good work. There is no federation of co-operative societies or an industrial co-operative society which could have faced that colossal task. They could not have faced a reorganisation that would lead them into a loss, before things turned for the better, of £136,000. It was only an organisation of that kind with State backing that could do it, and they have, therefore, achieved to a great extent what they set out in the beginning to do, that is, to reorganise the dairy industry, and put it on a sound footing. They may not have reached the point that certain Senators, enthusiastic on behalf of co-operation, would like to see reached, but, at least, they have covered the first important step in the way of putting the dairying industry—whether proprietary or co-operative—on a very sound footing.

I have several tables supplied to me here in regard to different items, but it is impossible to convey the contents of a table with any sort of conviction or understanding in a speech. However, I wish to give some summary of a number of tables. Between these organisations — the Dairy Disposal Board, the Condensed Milk Company of Ireland, the Newmarket Dairy Company, and so on, they have dealt with 293 units, that is to say, they have either taken over, erected or built 309 units altogether, whether they are central creameries or auxiliaries. They acquired 222 of those, some of them from co-operative societies and some from proprietaries; they erected 51— that makes 273—and the remainder are travelling creameries, which I will deal with in a few minutes. Taking the total, they closed 29 centrals, 67 auxiliaries or separating stations, they transferred 18 centrals and 36 separating stations and they still have on hands 17 centrals and 106 separating stations, as well as 20 travelling creameries.

It is true that the figures Senator Baxter gave would give the impression that these bodies had done very little in the way of transferring over to co-operative societies. Senator Baxter gave the number of co-operative societies that were there in 1927 and the total number of creameries that were there. He gave the number of co-operative societies at the present time and the number held by proprietors and by the Dairy Disposals Board. On Senator Baxter's figures, admittedly there is no great change, but there is, however, a very substantial change. For instance, a big I part of what they still hold were erected by them and erected in areas where there was no creamery industry whatever in 1927. I remember that a few years ago I went to the Dáil with an Estimate for £40,000 to develop the areas from Cahirciveen around through Kenmare to Castletownbere. I told the Dáil on that occasion that we would build collecting centres in those three areas and provide nine travelling creameries that would make three stops each—that would be 27 stations for that area for the collection of milk. I said I could not say at that moment whether we would lose that £40,000 or not but that it was an experiment. I said it was a poor area and that, if we succeeded in our experiment, we would have done a lot for the farmers, but if we lost our £40,000 after all it was not a colossal sum when compared with the amount that might be spent on relief schemes of a different kind in that area or in other areas.

That could not have been done by the co-operative movement. I do not think it could have been done unless the Dairy Disposals Board were there. It would be very difficult for the Dairy Disposals Board or anybody else to do that unless they had, at the same time, at their disposal a number of other creameries. That meant that they were able to do a great deal in the way of central purchasing of stores and they were able to supply certain machinery, and so on, and get a market for any butter they had to sell. The reports from that area have been very good, and I am told now by the Dairy Disposals Board itself that there is not the slightest doubt about the success of creameries in those areas. In fact, in the peak point which we are reaching about this time, we have a larger supply in the Cahirciveen area where there is now a central creamery, than in numbers of co-operative creameries in other parts of the country. There is quite a sufficient supply to make the thing a success.

Senator Baxter said that the Dairy Disposals Board was reported—I think he said reported but I am not sure— as paying good prices in competition and not so good when there was not competition. I have just been looking through the prices paid in 1940 and find that the highest price paid was in Cahirciveen, where there is absolutely no competition against them. There is no creamery within miles of that but they can get the highest price for their milk there.

Mr. Counihan

The milk is very much richer there than in other places.

Dr. Ryan

The milk in the Cahirciveen area has, probably, a higher fat content, on the average, than milk in other areas. Still, if the Dairy Disposal Company were doing what they were reported to Senator Baxter to be doing, surely they would have taken advantage of the position and would not have given as high a price in Cahirciveen as they gave in other places. The second highest price was paid in Kenmare, which shows that they were working on honest lines. Where there was a high fat content, the suppliers got a high price, and where there was a low fat content, they did not get as high a price.

Mr. M. Hayes

That shows that the Kerryman always gets a good price.

Mr. Counihan

It was suggested that the competition between the co-operative creameries and the Dairy Disposal Company created a difference.

Dr. Ryan

The Dairy Disposal Company has endeavoured—it is not possible to do it on every occasion— to pay the same price as the adjoining co-operatives. That is impossible in certain cases because every Senator knows that they must pay the same price all through the group. They cannot always pay the same as the surrounding creameries but they do their best. I think that there is no foundation whatever for the allegation that the Dairy Disposal Company have paid a high price when in competition and have not paid so high a price when there was absence of competition. The Dairy Disposal Company can prove in another way that they have always paid what the unit could afford to pay, taking into account what the surrounding co-operatives were paying. The accusation made against the company in some cases is that they pay more than the surrounding co-operatives did, but they have avoided doing that even where they could afford to do it. The proof that they have paid a fair price in their different units is to be found in the fact that they lost money during their first six or seven years. They were losing money on the condensory and, to a certain extent, on the toffee factory. They went on losing money and they did not try to cut that loss by reducing the price to the suppliers. They continued to pay a fair price to the suppliers and faced the loss on the condensory and toffee factory. Luckily, there, again, the loss has been eliminated. Senators may think that that is due to the war, but I am glad to say it is not. From the end of 1937, there has been no loss by the Condensed Milk Company. They had turned the corner by then and they were beginning to make a profit. Possibly, they are making a higher profit during the war, but I am not sure about that. It is commonly supposed that condenseries are run between one war and another at a loss and that they make a colossal profit during a war. We all know, however, that this war is not being run on the same lines as other wars.

Senator Baxter alleged that this company were accepting transferred suppliers from other creameries. I do not think that that is true. If there is anything in the allegation, I should like to investigate it. You have this sort of position in many cases: a person has been transferred to a new co-operative society and the co-operative has to pay the Dairy Disposal Company for the transferred milk. The co-operative very often, in turn, ccollects what it has to pay off the supplier, at the rate of £3 per cow, as mentioned here. Whether the co-operative collects from the supplier or not, it must pay for the transferred milk. In some of these cases, a person is transferred who is, perhaps, five miles from the creamery to which he now must go, and, perhaps, only three miles from the creamery to which he would prefer to go. The creamery that was closed down may have been only two miles from him. The great bulk of the people supplying Creamery A may have been transferred to Creamery B, and a few of the outside ones might be nearer to Creamery C, and might prefer to go to Creamery C. We have been trying in the Department of Agriculture to deal with individual cases of this kind. In some instances, it was agreed between the creameries concerned that the person in question would be allowed to go to the nearest creamery and that the finances would be fixed up between the creameries. There may be cases where a person preferred the creamery of the Dairy Disposal Company because it was nearer to him, although he should rightly belong under the transfer to a co-operative. I do not think that it is right to blame the company in a sweeping way if there are isolated cases of that kind which require to be made right.

The Dairy Disposals Company have a number of groups. Some of them were entirely organised by the company, such as those I mentioned in Kenmare, Cahirciveen and, practically, in Dingle. A small creamery was taken over in Dingle and, out of that, has grown an enormous organisation in the Dingle peninsula, where a large number of auxiliaries have been erected. I do not know whether there would be any desire in those areas on the part of the farmers to take these over. In the older areas, which are much longer organised, like the three I mentioned in Cork belonging to the Newmarket Dairy Company, the farmers may be anxious to get the creameries into their own hands. I shall, however, come to that question in a moment.

I desire to say a few words about the finances of these transactions. The finances were advanced by the State but, as I have said, it is hoped that the State will be recouped in time. At present, roughly £750,000 is due to the State. If, putting debtors and creditors against one another, the properties held are worth £750,000, the State will not suffer any loss. Whether they are worth that or not, I cannot say. That is a matter to be decided when they come to be handed over to the various creameries, which must take place some time.

Mr. Baxter

Is that the sum that is outstanding by the people who have gone to the co-operatives or is it only the liability of the Dairy Disposal Company?

Dr. Ryan

It is the liability on the property as it stands at present.

Mr. Baxter

Not merely the amounts due by the farmers who have gone to Co-ops.?

Dr. Ryan

No. I said I should come back to the travelling creamery. Although that matter does not arise to any extent in this debate, I shall say a few words about it. The travelling creamery was invented in 1934 or 1935 and, for some time, many of our experts were very sceptical as to whether it would work or not. On the whole, it has been a success. It was particularly successful in this way: when the Department were asked to develop an area and when they referred to the Dairy Disposal Board, it was hard to decide at that time whether the area would be a success or not. They had to go in and build auxiliaries at several places, after taking a census of the cows. They went to very big expense before they were sure whether the project would succeed or not. This travelling creamery enables them to test out an area.

For instance, in the Dingle peninsula we went there with a central creamery and three or four travelling creameries to test the whole area. It was found after three or four years that there was quite sufficient milk in many of these centres to carry auxiliaries. A number of these auxiliaries have been built with the result that the peninsula has now settled down to a regular system with central and auxiliary creameries and the supply is assured. In the same way travelling creameries are now testing Cahirciveen, Kenmare and Castletown districts. As I said already there is a big supply in Cahirciveen, close on 10,000 gallons, which is quite as good a supply as many creameries in the country have at present. There is no doubt that it will be possible to build auxiliaries in that area and to make them a permanent institution. We had also to build an anxiliary in Valentia and one on Bere Island. That auxiliary on Bere Island can never, in my opinion, be an economic success, but what were you going to do with the small farmers there? You could only expect about 400 gallons of milk; still the people there must get a chance to live. Even though we may have to come to the Dáil to provide for a permanent subsidy for this unit in Bere Island, I think the Dáil would not object to the people on the island getting something out of the common pool.

I agree with Senator Baxter that the co-operative movement has not by any means reached the degree of development that we should like to see or that we think it should reach in the interests of agriculture. I think—I said this before on many occasions—that the Co-operative Bill will be ready soon.

Mr. Baxter

What does the Minister mean by "soon"?

Mr. M. Hayes

Before the Summer Recess, because we shall be here until October.

Dr. Ryan

I shall be disappointed if it is not introduced in the Dáil before Christmas. Senator Baxter spoke of the competition at present existing in West Cork. There is, it is true, some competition on a small scale there, just as there was in 1927 in many parts of the country. I know it is important for the co-operative concern. There are two co-operative concerns there and we have 150 in the country. They have not lost as much milk as one Senator suggested here. The total amount which they have lost, as reported to me, is about 700 gallons. That is serious, of course, but there is no use in making it higher than 700 gallons if it is not in fact more than that. That position will have to be dealt with. I am hopeful that we may be able to settle it by negotiation.

Mr. Baxter

When?

Dr. Ryan

If it is not settled by negotiation within a very short time, in a matter of days, we must do something by law. I hope that we shall be able to settle it by negotiation within the next few days. The first point in Senator Baxter's motion is to acquire the remaining proprietaries. There are arguments for and against that. Personally, I believe that it must be done some time, that they must be acquired by compulsion if we do not get them by agreement. I had thought on numerous occasions since becoming Minister for Agriculture of preparing a Bill for the acquisition of the remaining proprietaries. It is possible, if the war had not intervened, that a Bill of that kind would have been before the Oireachtas before this time, but when the war came on and there was a general appeal to all Departments not to attempt to do things that could be put aside for the present—things that were not absolutely necessary to deal with the emergency—that was one of the matters we decided to put aside until the emergency was over. It may be necessary to come back to it again if we cannot deal with it in any other way. We succeeded—when I say "we", I mean the Department, whether acting under the late Mr. Hogan or myself—in acquiring practically all the proprietaries. A big number were taken over in 1927 when the first Estimate was brought in. Since that they have been taken over in small or big numbers every year up to about two years ago. There is only one concern of any size left now but there are a few small ones as well. Seeing that we were so successful by peaceful negotiation up to this, one is inclined to wait a little longer anyway to see if we can complete the job by negotiation rather than resort to a compulsory scheme. There is, of course, the difficulty of drafting a Bill of that kind. It is very difficult to decide on what basis they will be taken over, how the price might be fixed, and matters of that kind. No matter how extreme anybody may be on the question of State ownership or the acquisition by the State of private property, there is a reluctance on the part of everybody to go ahead and take the final step to acquire by compulsion private property if it can be done in any other way. There is also the point which, perhaps, in this connection should not be considered—of unemployment. In every scheme of rationalisation there will be a certain amount of unemployment created. After all, if we thought of that, we should not have done anything in this matter at all. In a district where you have two creameries, each of them has a manager and the manager has a couple of assistants in the broad sense. If one of these creameries is closed, some of the staff become redundant. In the past we tried to some extent to compensate these redundant employees, but no system of compensation is entirely satisfactory. If you give a person three months' wages, or even a year's wages, it is not nearly as good as his job. I say again, however, that is not a good objection, because that objection would have had as much force in the beginning as it has now. So far as the acquisition of these creameries is concerned, my present attitude is that this competition must stop. As I say we are trying to settle the matter peacefully. If we do not settle it peacefully, we must settle it by legislation. With regard to the taking over of creameries, we have from time to time made advances to the owners to see if they would sell. Sometimes they say "yes," but then the price is not one that we would consider as buyers. The matter has dragged on like that, and I do not know when we may be able to come to closer quarters.

The next point is when the creameries that we hold will be given back to the farmers. In the first place, in 1928 there was a different position. The prices of milk were much better at the time and the price of butter was much better. Comparatively speaking these prices were very much better than at present. Senators will remember that butter had held a good price from 1923 down to 1929 and then the crash came. The prices went down and they have never gone up, war and all, to what they were in 1927 or 1928. The prices ruling at that time would have made it easier to hand over a number of these creameries but since then we have had the crash of prices in 1929. If we had these prices it might have been easier to get these creameries handed over. It is all right for Senators to say that we should do the unpopular thing if it is necessary. Now I have been accused in this House of doing the unpopular thing. One would imagine we never did an unpopular thing.

Mr. Baxter

I never said that.

Dr. Ryan

There is one thing about co-operation. Surely to goodness no Senator will claim that the creameries should be handed over unless at least half the farmers want them. I think putting it at half is very low. You would want more than half, and not only that but you would want them to be enthusiastic, because co-operation is a thing to which men must give their energy and time, in which they must really do more than they are paid for, more than they personally get out of it. You must have enthusiasm and the desire to get the creameries handed over. I do not think we could possibly force the creameries on the farmers. If the farmers come along from any particular area and say that they want the creameries back, and if I am fairly satisfied that they are a majority, and that they are anxious to work in the interests of the farmers— which of course they would—then the only thing that remains is price. The price again is a difficult matter. There are various views about the price of these creameries. We could, for instance, sell the creameries somewhat on the lines on which they were sold in 1927. That is roughly what the Dairy Disposal Company has been inclined to do.

We are asked to take into account the profits made by these creameries for the last ten years or so and to deduct these profits from the price when handing them back to farmers. That appears to me to be entirely wrong because, if we had bought these creameries or if we erected these creameries, whether we erected them or bought them we had to deal more or less on a commercial basis. Certainly if we built them we had to pay the same as anybody else would pay, and if we bought them we had to pay the price the owners thought they were worth, and if we are going to sell them on an ordinary commercial basis the fact that we made profits on them should make them higher and not lower. At any rate, we have a good approach to it in this way. I have looked at the figures from many angles. First of all on the 1927 basis, secondly on the cost that they are in the books, that is that they were bought at so much, a certain amount was spent on new buildings, whether auxiliaries or centrals, and a certain amount was put down for depreciation and so on, and we take the value in the books. Thirdly, I think we can look at it in this way. If we know the price at which the farmers will be able to take them over, with the same efficient management, not more efficient than at the present time, and will be able to continue them, that is the price to be paid. I think that price is fair enough. As far as my calculations go and they can, of course, be checked, it would be a fair price. We have the 1927 price and the prices as they stand in the books as an economic unit for the farmers to run efficiently. Well, it is not possible to get agreement.

The two tests I am laying down are that the majority should want them and that they should pay a fair price. On these two conditions I see no objection to the handing over of the creameries. However, it must be remembered in the new areas, for instance, take West Clare, it was erected in 1931 and it had been run by a co-operative society and failed. It is now a very fine group and has probably as high a supply as any other. The peak reaches something in the neighbourhood of 30,000 gallons. I do not know whether the farmers who failed to make a success of that creamery would be anxious to take it back. It is possible that we may work out some scheme for a gradual taking over. That has been put to me and it is a good idea. Senator O'Dwyer mentioned one point. He said that conditions were against co-operation in that the farmer who was transferred over to the co-operative had to pay his levy but when he was transferred to the Dairy Disposal Company he had to pay no levy. It was even mentioned that we should levy the farmers on going over to the Dairy Disposal Company and we should put the money into a fund, and when built up it could purchase the creamery. We would say to the farmers: "Well, the creamery is yours because you have paid for it." That might be worth considering and if along with it there was some sort of scheme for having farmers associated even in an advisory capacity with the manager of the creamery, it might be possible to hand over the creameries in Clare where co-operation had failed and where they are working on entirely virgin soil. Senator Baxter did speak of handing over the creameries and visualised a very happy state of the country when they were taken over, but Senator Baxter will have to remember that co-operatives were taken over in the last five or six years. There is no use mentioning names, but some co-operative societies did fail. Some were taken over by the Dairy Disposal Company and in one case the society was handed over direct to another society. Well, now I think that is all I have to say on Senator Baxter's motion. I agree in principle with Senator Baxter's motion and if the word "immediately" was not there I think I could agree entirely. I would say that the remaining proprietaries should be taken over and that the creameries should be handed over to farmers, but I do not think it can be done immediately. I think it must be done as soon as possible.

Mr. Baxter

On the whole I was gratified with the way the House received the motion. The only rather antagonistic speech we had was, I think, from Senator Corkery, but then I can understand Senator Corkery and appreciate that his point of view of and approach to this question would be rather different from that of most of us. I think, too, that to a certain extent he was rather contradictory in what he did say, because while he was prepared to permit the farmers to manage the co-operative movement in so far as it applied to dairying, he would not permit them to go any further. He thought they could do that. At the same time he told us the people who were managing the co-operative movement were not really farmers at all, but that professional men and others were doing the work on the committees. I think the truth is that, whatever may be said to the contrary, the co-operative movement on the whole, in the circumstances of the times and in the difficulties which it has had to encounter, has been eminently successful. I think, as Senator O'Dwyer says, that but for the fact that the Minister had the co-operative movement to work through and to work with in the difficulties through which dairying in this country has had to pass, since the fall in butter prices, in 1929 or 1930, no one could tell what the exact position of dairying would have been in the country. If the position of dairying had been radically changed for the worse, I think farming on the whole would be in a deplorable condition to-day.

The Minister, I think, accepted generally my view that it was essential to put the co-operative movement on a sound basis. He says that if the word "immediately" were not in my motion he would be prepared to accept it. I suggest that his statement on the whole indicates that he is actually taking immediate steps to do what I want done. In fact, he appears to have taken the steps before this discussion opened. I realise that the Minister has been trying for a long time to get these proprietary creameries passed over to the co-operative societies and, apparently, he has reached a stage in the discussions when he is hopeful that they are, going to bear fruit.

Dr. Ryan

I hope the Senator did not misunderstand me. I said I was hopeful that the negotiations would bear fruit in stopping this competition. I did not say I was so hopeful about acquiring the creameries by negotiation. I said in the next few days the competition referred to by the Senator might stop, by negotiation.

Mr. Baxter

I wish the Minister would tell these people, "Unless you can make a bargain, and can make it fairly quickly, the State is going to do what they did in 1927." I am going to do what my predecessor found it necessary to do." Although it is a narrow, circumscribed area in which the competition takes place, nevertheless, the competition has been as difficult and as intense and as annoying to the cooperators in that area as it was in 1927. I know how disturbed some of them are. Some of them, in fact, are members of the Oireachtas and they have discussed this with me. The Minister knows to whom I am referring. It is a problem that has to be solved, and solved very quickly. I think if the Minister were to declare that if they do not solve it themselves, he is going to solve it quickly for them, it would be solved without his having to take these powers which none of us would like to have passed through the Oireachtas in so far as they apply to the taking over of private property.

With regard to one of the points which I raised in discussing the position of the Dairy Disposal Company, I must say all the information which the Minister gave us was very interesting and very illuminating, and far be it from me to say anything disparaging of the work done by the people who were entrusted with the task of taking over the Newmarket and the Condensed Milk Company and carrying on the very responsible task, in difficult days, of operating that very large concern. My information was that they in fact had paid certain prices in certain districts that were lower than the prices paid by them in districts where they were in competition with co-operative creameries. I think, in relation to the whole business, it would be only a small point, but I know that at the moment and for a very considerable time correspondence has been passing between the Dairy Disposal Company and a particular Kerry creamery in regard to certain suppliers there who have actually made considerable contributions towards the payment of their share capital to the creameries to which they were transferred and who have recently left that particular creamery and have been accepted and are being continued at this particular creamery of the Dairy Disposal Company. That is not a position which, I think, ought to be permitted. While in another creamery in the same area the Gárdaí were actually called in to eject certain suppliers who refused to take their milk away, in this particular case, these suppliers have been permitted to continue. I am satisfied that that is the fact, because I have a pile of correspondence here and it will probably be available to the Minister also. It is a small point in relation to the problem as a whole, but the atmosphere created by such a position, when you have an institution like the Dairy Disposal Company, is unsatisfactory and leaves it open to having the whole position of the Dairy Disposal Company and their activities, perhaps, somewhat misrepresented. I have no desire to do that.

With regard to the larger problem raised as to the taking over of the Dairy Disposal Company, their creameries particularly, and passing them over to the farmers, I said before and I repeat, that you cannot have the co-operative movement in the position in which we would like to see it and in which it ought to be until these creameries are owned by the farmers. The Minister says, how can you pass them over unless the farmers want to take them? Senator O'Dwyer pointed out that one of the obstacles and one of the difficulties in having them passed over to the farmers and why the farmer is not enthusiastic to take them over is that the farmers find it very difficult to obtain the necessary capital to run their ordinary business from day to day. To ask the farmer to take over the management of a creamery for which the preliminary consideration is a payment of £3 per cow, in order to obtain a co-operative share in this concern, is, in these days of stress and difficulty for farmers, asking him to produce something which he cannot obtain. He is permitted to continue under an organisation like the Dairy Disposal Company, where he has not to finance the concern, but where the State finances the concern. There is no encouragement for co-operative ownership so long as that anomaly is permitted to continue.

If the Minister wants to put the farmer who wants to become a cooperator in the same position as the man who prefers to continue with the Dairy Disposal Company, it should be just as expensive from the point of view of expenditure of capital to remain under the Dairy Disposal Company as it is to become part owner of his own creamery. You could then test and see what the farmer would do. But, apart from what he would do, I think the Minister has a wider responsibility in this matter. In fact there is the responsibility and the obligation on all of us —and particularly on anyone in the Minister's position, who has to give a lead and who has to try to educate the people—to encourage and organise farmers and point out to them that it is their own business and that they ought to take on the management of their own business. Until they start to manage their own business, at its very roots, and at their own doors, the management of the country's business as a whole cannot interest them to the extent it should.

I suggest to the Minister that he ought to proceed in a fashion which will encourage the farmers to become the owners of these creameries. He ought to proceed and say we are organised to take them over, and he ought to provide a position with regard to the obtaining of capital which will make it possible for them to become the owners, and if they want to remain under the Dairy Disposal Company, it ought to be an obligation on them to provide the capital to run the business, rather than that he should have to start providing it for them. I think that if we had all our creameries co-operatively organised we would find that there were fields for development with regard to the production of crops, the more scientific treatment of our land generally, and the increase in yields in many ways, under a completely co-operative conception of the management of the farmer's business efforts, that you can never hope to enjoy in conditions as they exist in parts of Clare and Kerry, where the Dairy Disposal Company are operating to-day.

I believe you would achieve much in West Clare and Kerry, and I applaud the efforts of those who have brought the creamery industry to a point where it is now definitely showing profits to farmers who are supplying milk and created a situation where there are creamery organisations which the Minister says can stand and live, but the Minister cannot be satisfied with that position, and then there is the next stage to which farmers in that area must pass—they must do other kinds of creative work themselves. It is not enough for them to send milk to the creameries and to let people in Dublin manage their business for them without imposing any responsibility on those concerned. It ought to be made part and parcel of their lives every day, and they ought to be using that business for doing things other than the production and sale of butter.

These organisations have possibilities far beyond that. They might be used, undoubtedly, for the purpose of distributing credit. They are being so used in Limerick and elsewhere, but they might be used for getting the farmers who live around them interested in a much more scientific development of their industry as a whole, not only in relation to cows and the yield of their cows, but to the feeding of their cows and the yields of their fields, the kind of crops they can produce and so on. That is what we should aim at. Some of the co-operative concerns are tackling it. They have gone in for bigger production and they have erected silos, but you cannot do that in areas where the Dairy Disposal Company is operating. If the Minister is prepared to take the view that he has to wait until the farmers are all ready, that no other action can be taken than to permit the farmer to carry on and change his mind, in 50 years the Dairy Disposal Company will still be operating in those districts. I do not think that that is good for the co-operative movement. It will not bring it to that strength which we want.

While saying that, I appreciate the Minister's approach to this whole question. On the whole there is very little between us. The only thing I have to say is that I will go ahead and urge the Minister to do something. The time is ripe now and the atmosphere in the country is such that the Minister will be able to do the job successfully and there is time and leisure at the moment to do it. I think the money could be found, and that the men could be found, both in Clare and Kerry, with intelligence as high as that of their countrymen in Limerick, Cork, Cavan and Waterford, to manage co-operative concerns just as successfully, if the effort is made to find the money. It would reflect on these counties, where there are intelligent brainy people, to say that they could not imitate what their companions elsewhere have done, and I suggest to the Minister that instead of being satisfied to sit and wait until people feel the idea, I would make them ready, I would educate, I would spend a little money and I think it would be well spent money from the point of view of the State. The time and energy expended would, I am satisfied, bring a fruitful return and the Minister would continue what has proved to be a good policy and would gain the support of the whole country for his efforts.

Cathaoirleach

Is the motion being withdrawn?

Mr. Baxter

I think the House would accept the motion. I feel that the Minister has no objection to it on the whole.

Dr. Ryan

I do not mind.

Question put, and agreed to.

The Seanad adjourned at 10.7 p.m. until 3 p.m. on Wednesday, 16th July, at 3 p.m.