I move: "That the Bill be now read a Second Time".
The Irish National Stud Company, which were set up under the National Stud Act, 1945, as a measure to assist and encourage the breeding of thoroughbred horses in Ireland, have been carrying on the business of a stud farm at Tully, County Kildare since 1946. Up to 1944, when it was transferred to the Irish Government, this extensive property had been used by the British Government as a stud farm. The transfer to the Irish Government, however, included no bloodstock.
The Irish bloodstock industry has increased progressively in value since the War. At the more important Irish and English sales international buyers compete for our foals and yearlings and pay excellent prices for them. The blood lines introduced by Irish-bred sires have enhanced both the quality of the thoroughbred and the image of the Irish hourse throughout the world.
The net export value of the thoroughbred industry is in the region of £4 million a year including the benefits accruing from the substantial spendings of foreign owners who send horses to Ireland for training and their sires and mares to Irish studs. Horsebreeding provides both regular and good, as well as interesting, employment in the Irish countryside.
We must, however, take account of the fact that conditions in the industry, as in many other areas, are changing rapidly. In other countries—notably the United States, Great Britain and France—with which we have to compete, vast sums are being invested in it.
The directors of our Irish National Stud Company have been reviewing the Company's position in the light of developments abroad and of the recommendations of the Survey Team on the Horse Breeding Industry which reported in 1965. Their conclusions are somewhat disquieting. The National Stud, instead of being the show place that it really ought to be, is not measuring up to the standards set by some of the best privately-owned here or abroad.
Many of the Stud's inherited buildings are now both old and uneconomic. The number of stallions, presently only four, is inadequate to cater for breeders' demands.
"Fashion" is a highly relevant factor in this business. It is five years since the Company bought its last new stallion whereas many good young sires have been acquired by private studs in the interval. Our National Stud should be put in the position of being able to offer at least comparable facilities. In recognition of their responsibilities to small breeders the Stud's fees are low. The Stud's "no foal no fee" basis of charge is not common in the industry generally where high-class sires are concerned. I must stress that this concession is no small boon to the breeder of limited means.
Additional stallions are also needed by the Company to produce extra income to off-set increasing maintenance and overhead charges.
Some £300,000 has been spent since 1960 by the Company on bloodstock and on additions and improvements to the Stud's facilities. The Company's capital resources are now almost exhausted. I am impressed by the case made to me by the Board that a substantial injection of new capital is now urgently needed to purchase additional stallions, to construct new yards for visiting mares and to replace old and uneconomic buildings. The cost of the Company's programme of necessary developments and improvements would entail an expenditure of the order of £500,000 to £600,000 spread over the next three or four years.
The Company's authorised share capital under the National Stud Act, 1953, is £500,000. The programme I have outlined would require an increase of this capital to at least £1,000,000. The additional finance required would be provided by the Exchequer by the way of share capital taken up by the Minister for Finance under Section 19 of the original Act of 1945 after statutory consultation with the Minister for Agriculture and Fisheries.
So far I have been speaking of objectives calling for a total share capital of about £1 million. Section 2 of the Bill before the House provides, however, that this capital should be £2m. and this brings me to the matter of the acquisition by the National Stud of what is termed a "prestige stallion".
In its 1965 report the Survey Team on the Horse Breeding Industry accepted that the National Stud was providing a reasonable service to small breeders. However, having considered all the available indications of the state of the throughbred industry here and the international standing of Irish horses, the Team recommended (and I quote verbatim) that "there should be at all times at least one prestige stallion standing at the National Stud". The Directors of the Irish National Stud Company endorse this recommendation although conscious of the risk inevitably associated with the investment of a good deal of money in a horse which might prove disappointing at stud.
The addition of this extra £1m. of share capital is, then merely an enabling provision which might be resorted to in the event of there becoming available what the directors of the Company considered to be the right kind of horse at the right price. The special concern of the Minister for Finance in that contingency would be the ability of the Exchequer at the particular moment to provide the Company with the amount of share capital needed to effect a proposed purchase.
Section 3 of the Bill deals with the Company's bank borrowings which, under the original Act of 1945, are restricted to £100,000 or to the amount of share capital unissued, whichever is the less. An increase of fixed capital as proposed in this Bill would obviously call for some corresponding increase in working capital and temporary borrowing facilities. The effect of section 3 would be to enable the Company to borrow, as necessary, up to £200,000 without limitation by reference to unissued share capital.
I commend the Bill to the House.