Seanad Éireann díospóireacht -
Wednesday, 18 Dec 1963

Vol. 57 No. 5

Subsidy for Losses on Stall-Fed Cattle—Motion.

Mr. Prendergast

I move:

That in view of the heavy losses sustained by farmers who stall-fed cattle for beef last winter, Seanad Éireann is of opinion that the Government should introduce a system of subsidy or deficiency payments to offset similar losses this winter and thus ensure an adequate supply of such cattle for the home and export markets.

If this motion had been taken when first put on the Order Paper, the substance of it would have more relevance than today; but even at this late stage perhaps some good may come of it, and what I mean by some good is that the Minister, having heard the arguments in its favour, will accept the motion.

I believe there is a good argument in favour of farmers who stall-feed cattle having some form of protection against such severe losses as they experienced last year, and in the event of a similar collapse in beef prices next January, February and March if some scheme were devised whereby their losses will be met, it will be an incentive to them to stall-feed again this year.

My personal opinion is that last year's disastrous beef trade will not be repeated, but there is not much use in my saying to farmers, who got their fingers badly burned this year: "Do not worry. Beef will be a good trade early in the New Year." Such an utterance from me would carry little, if any, weight, and even if it did, in the unlikely event of my prediction not working out as hoped for, I would find myself a very unpopular man in the eyes of many farmers.

In the case of the Minister, his position would be different because if he felt as I do, he could say to the farmers: "Stall-feed your usual number of cattle and if my prediction is not right, I will see to it that you will not lose money from your efforts."

I am firmly convinced that the Minister could make such a statement and find himself not paying any subsidy or deficiency payment; but such an assurance would make a big difference to the numbers of cattle being stall-fed for beef. I can assure the Minister that there are not one quarter the number of cattle being stall-fed at this moment that there were this time last year. If that position is not changed, there will be a definite scarcity of beef for the home and export markets. Such an occurrence could also have a serious effect on the store trade because, if the numbers of cattle that would ordinarily be fed for beef come on the market as stores in January, February and March, the result might easily have a depressing effect on the store trade by virtue of the law of supply and demand.

Another serious effect deriving from a beef scarcity would be tremendous unemployment in meat factories. I know the management of many of these factories are very perturbed about the present situation, not to mention the unfortunate people who may find themselves unemployed.

On the head of the Minister, and on his head alone, lies the responsibility. He cannot say he was not warned or that the seriousness of the position was not pointed out to him. I believe that even at this late stage if the Minister accepts this motion all my forebodings could be averted.

I am well aware that the Minister does not like subsidies. I know and I admit that the last time a subsidy was paid on cattle that it was abused. But I also think that the scheme lent itself to abuses. From that experience I am sure the Minister with the help of his advisers could, if the occasion necessitated it, devise a scheme that would be watertight. I would suggest that whatever payment that would have to be paid, if any, should be paid direct to the farmer who feeds the cattle. Over the past nine or ten years we have built up a very useful dollar-earning business selling prime beef to the American forces in Europe. If the supply of stall-feds is not available, as I predict, this very useful trade may be lost. There are other countries in Europe that would be only too pleased to see us unable to fulfil the requirements of this valuable market. Have no doubt, if we fall down and they step in, it might well be that we would never regain our foothold.

I know on previous occasions the suppliers to this market have lost money and plenty of it to fulfil their contracts, and I know on many occasions they have tendered for contracts knowing they were going to lose money, but wanting to keep their grip on the market. If the situation that I predict arises it does not matter if they are prepared to lose money or not to stay in the market, they will not have the supplies to meet their requirements. That in itself creates a serious position.

In today's market, the average price for beef was around £6 5s. 0d. per cwt. I believe that anyone who stall-feeds cattle for around two months would require to get £1 per cwt more than the purchase price to meet his expenses. If the Minister would take today's prices as a basis and say that as and from 1st February he will make up the difference, if the average price is not up to £7 5s. per cwt., such a guarantee would give encouragement to farmers. They would at least feel that even if they wouldn't get much profit they wouldn't lose money.

Other sections of the farming industry have guaranteed minimum prices for their produce—the milk producer, the pig producer and the wheat grower —and while they may at times be dissatisfied with the minimum guaranteed price they at least know where they are going.

I see no reason why our producers of beef should be left to compete with Government-subsidised Yugoslavian beef and cheap meat-producing countries like the Argentine, Uruguay, Australia and New Zealand. Too often, we have to sell our beef for half nothing in Great Britain when, as frequently happens, these importing countries make nothing better than a dumping ground of the English meat market.

What amazes me is that foreigners can come to this country and get all the money they want for industry— building hotels, and so on—but when the unfortunate farmers ask for something such as the substance of this motion, when they ask for what is no more than a guarantee to help them to stay in business, all kinds of excuses are made as to why they are not entitled to get it. The moneys given to foreign industrialists are meant to create employment, yet, if no beef cattle are available for export next February, March and April, many thousands will find themselves unemployed, not alone from the meat factories, but from the allied industries. Surely that reason in itself justifies acceptance of this motion.

In conclusion, I appeal strongly to the Minister to accept this motion. If he does, he will find himself a more popular Minister for Agriculture than he thought he ever would be. I sincerely believe it will not cost the Exchequer one shilling but acceptance of the motion will give the farmers an incentive to produce the goods for which I believe there will be a ready market.

Mr. Quigley

In seconding Senator Prendergast's motion, I feel it is unnecessary to emphasise in Seanad Éireann the vital importance of cattle exports to the national economy. In this connection there are a few points which I should like to make. Owing to the fluctuations of prices on the British beef market, Irish farmers may find themselves feeding their beef cattle over the next three or four months at a net loss as I regret to say happened last year. This is something which our farmers are powerless to prevent. Without wishing to offend those who practise other systems of farming, I believe that the men who practise mixed farming and who provide themselves with home produced fodder for winter feeding are the farmers who should get every consideration. As such, they are entitled to an assurance from the Minister for Agriculture that they will receive a reasonable reward for their investment and their labour.

From information I have received, I understand that in most other European countries farm exports are subsidised in one form or another. Here, our producers of export beef have to contend, unaided, with competition from the Argentine, the Commonwealth and other countries, not to mention the growing output from home producers in Britain. In my own county of Laois, numerous small farmers bought in store cattle in the autumn of 1962 at over £6 per cwt. and, after feeding those animals through an exceptionally severe winter, they had to sell them the following March and April at less than they cost. This result, following on three successive bad harvests, has left many of them in a position where they cannot afford to risk similar losses in the current season.

I hope and trust that no subsidy will in fact be necessary this coming season. It is quite possible that farmers may obtain a reasonable return, but I feel strongly that they should be cushioned against a repetition of last year's collapse in beef prices. If the necessary machinery is not put in motion by the Government to safeguard the farmers engaged in this important export, there is a real danger that it may diminish alarmingly in the years ahead and the resulting loss to the country would be difficult to overestimate.

Apart from our export trade, any falling off in beef production over the winter months would undoubtedly have serious repercussions on employment at home. If our meat factories were starved of supplies from January to April, thousands of Irish workers would be disemployed, and many ancillary industries would also suffer.

I am sure the Minister is alive to the dangers to which I have referred. Every year he has to make provision to safeguard other farm exports and those who produce them. There is no logical reason why the mixed tillage farmer who is also the producer of winter beef, should be denied the protection which is given throughout the year to other sections. I shall not refer to the vast amounts which are being laid out to encourage industrial exports—sometimes with very poor return. Here, we have one of the oldest exports, based entirely on native raw materials and employing many thousands of our countrymen. Surely it cannot be left unaided to compete with the subsidised product of other countries? It would not be fair treatment and it certainly would not be good for the national economy.

I appeal to the Minister who, I am sure, is familiar with the problems of the feeding farmer, to give serious consideration to this motion, and I would also appeal to the House to support a proposal which is of very real importance to our whole economy.

Mr. L'Estrange

I think it is admitted by all people in this country at present that our cattle industry is our major industry and that the prosperity of our people, irrespective of whether they live in town or city, depends upon what our farmers and their labourers are able to export profitably from the land of Ireland. The stall-feeding of cattle provides more jobs and more work for Irish farmers and their labourers than any other branch of agriculture.

Millions are voted every year for industrial projects—many of them perhaps of doubtful value: nevertheless, the money is voted. One of the arguments always used by any Government is that those industries give employment and for that reason both this House and the Dáil have always been anxious to vote the money. Here is one of our oldest industries and it gives great employment. When we vote money for industry, we vote it in millions—£4 million, £5 million or £6 million. Many economists and other people think that such money would be much better spent in other directions—for example, if it were spent in giving subsidies or by way of a deficiency payment in respect of the stall-feeding of our cattle. We have all the raw materials at home. We can grow the crops for the stall-feeding and give employment to the people growing them and to the people minding and feeding the cattle.

We believe that a subsidy should be given. Another good reason why a subsidy or deficiency payment should be provided is that it is mostly the small farmers, the medium-sized farmers and the tillage farmers who indulge in stall-feeding. Those people are the backbone of the country. They are paying their due share of taxation but at present they are getting less than their share of the State subsidies being paid to farmers. Forty per cent of the farmers have less than 50 acres and the proportion of the various crops and produce receiving special assistance, which were accounted for by farmers of less than 50 acres, has fallen significantly over the past ten years. Those small farmers and tillage farmers, as I said, have less than 50 acres and in 1960 they received only 19 per cent of the total wheat subsidy paid.

An Cathaoirleach

Might I draw the Senator's attention to the fact that the motion relates to stall fed cattle last year and this year?

Mr. L'Estrange

Yes, but we are making the point that the small farmers stall-feed their cattle and it would be much better if the subsidy were paid to the people who engage in stall-feeding because at present they are getting less than their due share and their due proportion of the subsidies and the moneys being paid out by the State. Are we not entitled to make the case that people who give this employment, who have lost so much last year, are entitled to a greater share from the national pool?

An Cathaoirleach

A discussion on the whole gamut of agriculture would not be in order.

Mr. L'Estrange

I have no intention of engaging in such a discussion. All I want to say is that these people only received 19 per cent of the wheat subsidy and 21 per cent of the barley subsidy and that they feed the corn to their stores. I think I am entitled to make the point that instead of selling corn on the market and getting their share of the subsidy, they feed it to their stall cattle and then walk the cattle off the farm to the market and by doing that, are losing their due share of the subsidy.

Another good reason why we should have this payment is that if we are to achieve the targets set for 1970, something will have to be done to keep the people on the land. It might be no harm to point out to the Minister that if we take the average price of cattle over the years, we find that in 1952, for three-year-old store bullocks a man got £50 and for a three-year-old fat bullock he got £56 6s., or £6 6s. more for store-fed cattle. That trend has deteriorated over the years and if we take 1959, we find that he got £62 13s. for a three-year-old store bullock and £64 7s. for a three-year-old fat bullock, so that he had only £1 14s. in the difference. We all know that it deteriorated further last year and any man who store-fed cattle lost anything from £1 to £2 per head.

Mr. Prendergast

£20 per head in some cases.

Mr. L'Estrange

Yes. The Senator would know the figures better than I do, but we have not got the official statistics. If we take the figures for 1960, we find that in that year 542,270 cattle were exported, for which we received £33.6 million; the total number of fat cattle exported were 220,163, for £14.6 million. In that year almost half the cattle exported were sent out as fat cattle. In 1961, there were 722,227 cattle exported for £44.1 million, of which 299,338 were fat cattle, representing £18.6 million. The percentage had dropped from 50 to 41.

In 1962 there were 575,260 cattle exported for £36.2 million and only 136,765 fat cattle, representing £9.9 million. In other words, only one quarter of the cattle exported were fat cattle which meant that in 1960, 50 per cent were fat cattle, in 1961, 41 per cent, and in 1962, only 25 per cent. That is a dangerous trend and one which is going to affect the economy of the country unless something is done to deal with it in the near future.

The Taoiseach was reported in the Irish Times on 28th February, 1963, as saying that the farming industry is the key to the nation's welfare. We have all recognised that for a long time. I believe something should be done for those people who are stall-feeding cattle and accordingly support the motion.

Mr. McDonald

I should like to support this motion and what has already been said by Senator Prendergast, Senator Quigley and Senator L'Estrange. The store feeding of cattle, whether in stalls or in open sheds, is a very important factor especially in tillage areas. For generations, it has been the practice and has been considered good husbandry for farmers, large and small, to put in their stores in late autumn and stall-feed them during the winter months. It is still the most economic method of producing beef and if our farmers are to become economically efficient, as they are told they must in order to survive entry into the Common Market, we must protect and foster this practice.

As has already been said, farmers who stall fed cattle last winter sustained heavy losses. The average price last autumn for beef cattle was 110/- per cwt. liveweight. The average price for the same type of cattle during the spring of 1955 was 166/- per cwt. liveweight. These figures—166/- per cwt. in 1955 and 110/- this year—speak for themselves. No other section of the community is expected, I submit, to live and survive on a declining income. Over the past eight, nine, or ten years, farmers' incomes have been considerably reduced and surely the time has come now when some measure of protection must be afforded them.

The stallfeeding of cattle is a fundamental part of our agricultural industry, particularly in the midlands where there is mixed farming. This type of farming calls for the highest degree of husbandry. Where the land is intensively cultivated, there is a high labour potential. A great deal of manpower is needed. The production of farmyard manure helps to fertilise the land. The basic raw materials for the land are home-produced. We all know, of course, that selling at the store stage yields the farmer a quicker return. The conversion to beef is by far the most economical exercise, especially for the home market. Surely it is vital that we should preserve this branch of our agricultural industry?

This motion does not ask merely for another subsidy to be granted to the farmers; it calls on the Government to fix and guarantee a basic price for fat stall-fed cattle in order to ensure that the farmers will continue to produce prime quality beef without being at a loss, as they were last year, as they were in the spring of 1962, in 1960, and in 1958. Some time ago, the Minister announced a subsidy of £15 on heifer calves. This will lead, I believe, to large numbers of cow heifers being offered for sale on the beef market. These will be three-to four-year olds. They will be prime beef. The farmers, however, offering these animals for sale will get only the price paid for the old stripper cow. That will be grossly unfair. It will be unfair for the farmers to get this scandalously low price for prime quality beef. The price paid for cow heifers should be the same as that paid for prime beef or a new scale should be introduced for this particular type of beef. There is no comparison whatever between beef from a 3½-to-4-year old cow heifer and the old stripper sold for canning.

I urge the Minister to accept the motion. I urge the Minister to take steps to compensate that section of our community which has received less than any other section for its labours over the past eight or nine years. The motion deserves the Minister's most serious consideration. If trade is good this year, there will be no call on the Exchequer, but, at the same time, it is important that those farmers, and the numbers engaged are pretty big, who engage in this particular form of husbandry should receive some measure of protection and have some knowledge that they will be properly rewarded for their labours.

There is talk now of a ninth round of wage increases for other sections of the community. The farming community have not yet benefited from the fifth round, not to talk about the ninth round coming on now. Most people agree that the farmers are the backbone of the nation's economy. Nevertheless, the farmers are not getting their fair share of the national cake. One wonders if those who agree that they are the backbone of our economy are sincere. This is a rather modest motion. All it asks for is a guaranteed floor price for this very important industry.

An Cathaoirleach

The Minister.

Mr. Prendergast

There must be no farmers on the Fianna Fáil side of this House.

Minister for Agriculture (Mr. Smith)

Listening to the speeches in this motion, it occurred to me that there is just no knowing all the money a Minister can handle, dispose of and distribute—if he has it. There is no knowing, too, the extent to which he might be invited by one source or another to make himself popular by acceding to all the requests for money. But even if the Minister, any Minister, were in a position to accede to all the requests made to him for money, no one can prophesy that he would, in fact, achieve what Senator Prendergast has suggested he would achieve, namely, become the most popular man in Ireland.

Let us for a moment now consider this motion in association with the whole cattle industry. We find ourselves under constant pressure to support the cow, to support the milk producer, to give him a better price for his milk; the case he makes is that, if it were not for the fact that he is so industrious in his particular effort, we would have no store cattle trade, we would have no fat cattle trade, and we would have no meat processing industry. I could never find myself in disagreement with that line of thought. I could always see sense in it and I always liked to go along with it as far as possible. But here is a major section of the agricultural industry that has always stood on its own feet. I know you can never be positive about the future, but it would appear that the prospects for this major section of agriculture are reasonably bright.

Mr. Prendergast

Yet no cattle were stall fed this year?

Mr. Smith

I shall deal with that. The case has been made that stall-feeding of cattle was not a profitable occupation last winter. I know that. I never saw a time in the cattle trade, whether it was stores or fats, when there was not a period of uncertainty now and then. If you look at the early months of 1963, you find the explanation of what brought about the tremendous fall in these prices— increased killings of British home-fed cattle and increased imports from Argentina and Yugoslavia.

Mr. Quigley

We pointed that out.

Mr. Smith

At a later stage in the spring, you had store prices improving and, in fact, becoming quite high. As store prices improved and continued to hold firm for a long period, exports of fat cattle declined. Store prices started to ease at the end of September and continued to decline up to very recently—now they appear to have improved somewhat. The tendency since September has been for fat cattle exports to improve.

Here is what I would invite those interested in this subject to think of: just trace the store and beef animal from the day of its birth. Think of what Senator McDonald said in regard to the recent scheme introduced to encourage the production of more livestock; associate that with the efforts being made to increase the carrying capacity of our land. Think of the man who produces a calf for store purposes and encourage him or some other farmer to get into the business and produce more cattle. Then come to the Seanad and say "We want a subsidy on beef also". It is all very well to make a case. I know Senators and others can use all sorts of arguments about eighth, ninth and tenth rounds and all the rest of it. But apply yourselves intelligently to what we are being asked to do here. We have price supports for bacon, barley, wheat and a number of other commodities. So far as butter is concerned, we are obliging our own consumers here to pay high prices for their butter. In addition the taxpayer is making a contribution to dispose of the surplus butter. This joint effort on the part of the consumer and taxpayer is designed to improve the whole cattle trade. Yet this proposal is asking the Government to provide a subsidy in this case also.

If the suggestion is being made because there is unevenness between the store and the fat beast, then we have to think of the store cattle arrangement secured with the British Government, under which we got for these animals, when they were fattened in Britain for three months, a price equivalent to the British home price less 3/6d. per cwt. Later, when the first six of the Twenty Six counties became attested, the British agreed to remove that differential of 3/6d. and enable store cattle from these areas, when fattened for three months in Britain, to get the British home price. That arrangement has been extended since many other countries have become attested, all our store exports being now attested, and we claim that has been a tremendous advantage.

Mr. Prendergast

That has nothing to do with the beef trade.

Mr. Smith

Is it contended that having obtained this advantage for our store cattle, the two types of trade must be in parity at all times?

Mr. Prendergast

I am not asking anything of the kind. The Minister has misinterpreted the motion.

Mr. Smith

I am examining the proposal intelligently. I am saying it would be unreasonable to ask the taxpayer, simply because of a situation which arises at a particular time, to subsidise some scheme so as to ensure that there would be no risks and no loss in respect of cattle. Whether the farmer is in stores or beef or whatever line it may be, although the overall picture may be satisfactory for the future, there will always be these slight upheavals and these tendencies showing, so that the store producer will benefit in one instance and the beef producer will not fare so well, and vice versa.

These inequalities have arisen in the past and will arise in the future and may favour beef to the detriment of the store. Do we not all know the factors that influence store prices? Looking at the figures for exports, say, over a period of ten years, you will find that in one year there is a very small export of store cattle. On the other hand it will be seen that in fats the shipments have been heavy and the killings have been heavy. The next year it will be the reverse, and so on.

I have met the trade, both those interested in the dead-meat side of it and those interested in exporting fat cattle on the hoof and we have discussed these matters very fully. It is only natural that interests such as those should make demands and look for the removal of what they regard as inequalities and which would of course, be beneficial to themselves. I am not blaming them for that, but, as I say, I do not believe it is possible to eliminate the degree of risk that prevails and I do not think a Government or a Department could be expected to devise a system at public expense that would ensure the elimination of these inequalities.

I have looked at the figures showing the killings in the factories. In 1960 and 1961, the killings were exceptionally high because during those two years we had to provide a subsidy due to the existence of a problem that arose from our efforts to eliminate disease. In 1960, 1961, 1962 and so far in 1963, the killings are fairly substantial. They may not be just as high now as they were in 1960 and 1961 but they are fairly high. This is an excellent trade, I admit, giving good employment, which is something a Minister and a Government would not be unmindful of. However, there are no indications that I can see that this trade is not capable of continuing profitably. It has been said that these concerns have often been forced to quote prices that are uneconomic from their point of view. I am sure those engaged in that trade are keen businessmen and will try to secure contracts to meet all that. Taking it all in all, they, too, must carry the risks the producer carries and they will have to take those risks. They may not take them to the same extent as the producer does but I am sure there is no business of any consequence in the country where such risks have not to be faced.

I have no intention of accepting this motion. As I said at the outset, it is amazing the enthusiasm some Senators and public men can display in asking Governments and Ministers to spend money while showing such a tremendous reluctance to provide it.

Mr. McDonald

May I ask a question? The Minister mentioned that he was reluctant to ask the taxpayers to contribute in this respect because they were compelled to pay a high price for butter and also to contribute towards the economic export of butter. Is he not also aware that the farmers pay 50 per cent of the cost of selling butter in foreign countries and that they also contribute 50 per cent of the cost——

An Cathaoirleach

The Senator may not make another speech. He was permitted to ask a question.

Mr. Smith

The Senator should know his percentages; it is only one-third.

Mr. Prendergast

I take it from the Minister's reply that the motion is not being accepted. The Minister has misinterpreted the purpose of the motion. All it asks is that in the event of a disaster in the beef trade as happened last spring, the Minister will step in and cushion the farmers against loss. In his opening remarks he said there was no knowing what money would be available if Ministers wanted to do this, that or the other thing. That is true. There is no knowing what money is available to different Ministers for grants to foreigners to build colossal hotels, and to industries—half of which are going bankrupt—but when the farmer wants money, there is none for him.

Mr. Smith

I am the most expensive of them all.

Mr. Prendergast

Except for 1961 and 1962, the beef-producing farmer never got any form of subsidy.

(Interruptions.)

An Cathaoirleach

Senator Prendergast, to continue.

Seán Ó Donnabháin

May I ask a question? Would Senator Prendergast say where 50 per cent of the industries went bankrupt?

(Interruptions.)

An Cathaoirleach

Senator Prendergast, to continue without interruption.

Mr. Prendergast

I was speaking about the money available to foreigners coming in here to set up industries. There is no difficulty for them. We are not asking for money except in the event—remember that: in the event—of a recurrence of the disastrous situation of last year when farmers lost £20 apiece in many cases on store-fed cattle. After that colossal loss, farmers are not stall-feeding this year. The point I am making is that in the event of such a situation recurring, the effect on the meat factories—I just mention them in passing—and on the employment given in these factories will be disastrous. If the Minister would only say to the House and the farmers: "Look; I do not believe there will be a bad beef trade, but if there is, we will give some help or some protection," I would be satisfied, and I would call that acceptance of the motion, but otherwise I am not satisfied.

Question put.

The Seanad divided: Tá, 13; Níl, 21.

Tá

• Carton, Victor.
• Cole, John C.
• Desmond, Cornelius.
• Dooge, James C.I.
• Fitzgerald, John.
• Fitzpatrick, Thomas J.
• Lindsay, Patrick J.
• McAuliffe, Timothy.
• McDonald, Charles.
• Mannion, John.
• Prendergast, Micheál A.
• Quigley, Joseph.
• Sheldon, William A.W.

Níl

• Boland, Gerald.
• Brady, Seán.
• Brennan, John J.
• Browne, Seán.
• Costelloe, John.
• Donegan, Bartholomew.
• Farrell, Joseph.
• Fitzsimons, Patrick.
• Flanagan, Thomas P.
• Healy, Augustine A.
• Killilea, Mark.
• Mooney, Joseph M.
• Nash, John Joseph.
• Nolan, Thomas.
• Ó Donnabháin, Seán.
• Ó Maoláin, Tomás.
• Ruane, Thomas.
• Ryan, Eoin.
• Ryan, Patrick W.
• Ryan, William.
• Yeats, Michael.

Tellers:—Tá: Senators Carton and Fitzpatrick: Níl: Senators Ó Donnabháin and Farrell.

Question declared lost.

An Cathaoirleach

Sul a gcuirim an Seanad ar athló, ba mhaith liom beannachtaí na Nollag agus beannachtaí na h-aithbhliana a ghuí do gach Seanadóir agus d'oifigigh an Tí. Gach beannacht agus rath go raibh oraibh go léir.

Mr. Carton

Many happy returns.

The Seanad adjourned at 11.25 p.m. sine die.