Seanad Éireann díospóireacht -
Wednesday, 19 Oct 1983

Vol. 102 No. 2

Tuam Sugar Factory: Motion.

Mr. T. Hussey

I move:

That Seanad Éireann calls on the Government to make available the necessary finance to the Board of the Sugar Company to continue production of sugar at the Tuam Sugar Factory and is concerned that the development of agriculture will be impaired by the cut-backs in State assistance, and calls for a full Government commitment to the agricultural sector in the overall interests of economic recovery.

In moving this motion I want to highlight again the saga of the Tuam sugar factory because this saga has been going on for a long time now. Efforts have been made by public bodies, public representatives, community leaders and, indeed, Church leaders to bring home to the Government the importance and the necessity of keeping this plant operating in Tuam.

For the past 12 months we have been listening to promises that reports are being prepared and studied, and so on. I can tell you and this House that the morale of the workers in Tuam is very low indeed because they do not know at this stage whether this is their last campaign in Tuam. They have a right now to hear from the Government where they stand in relation to the continued operations of the Sugar Company in Tuam. The reports, I understand, have been presented to the Government and the Department of Finance have made their observations. The Department of Agriculture have also given their observations and it is now up to the Government to make their decision. For the sake of the workers, the farmers and the local community in Tuam it is now time for the Government to make that decision and to make it known to the workers and the people of Tuam.

Both my colleague, Senator Killilea and I, have highlighted in this House before the problems relating to the proposed closure of the Tuam plant. I want again to put into the record of this House the factual position as regards the Tuam sugar factory and what it means to the local community, to the workers and indeed to the national economy. Tuam sugar factory was set up in 1934, not solely to make a profit but to promote regional development and employment in the west of Ireland. Indeed, these social reasons are as valid today as they were in 1934. It is an excellent production unit for its size but because of the lack of capital investment in the past it is unable to match the large capacity savings of its sister factories. In 1981 when the possibility of closure was considered, the workers decided that they must play their part in improving the situation and a plan was adopted to this end with three main elements in that plan. The first was to increase the acreage to 10,000 acres. Over the past three years, because of the work done by the workers themselves, the support they got from ACOT and from the Sugar Company personnel, they have succeeded in increasing the acreage from 4,600 acres in 1981 to 8,500 acres in 1983. The 1983 figure of 8,500 acres could have been 10,000 acres but, because of the high national demand, a restriction of 8,500 acres was placed on Tuam with similar restrictions on the other branches.

The second element of that plan was to reduce the losses by the installation of capital equipment. In 1981 a list of capital equipment was submitted which would have been of significant benefit. Two specific areas were of particular importance, firstly, the sugar packaging equipment which cost £170,000 and would effect a saving of some £210,000, and, secondly, sugar extraction equipment which cost £120,000 and would effect a saving per year of £90,000. But, in spite of these arguments, unfortunately low cost capital equipment was provided. The third element in that plan drawn up by the workers was to reduce the work force by 50 over a three-year period by natural wastage and so on. By the end of 1983 the permanent work force in Tuam will have fallen by 90 people with a saving of £900,000 per year to the Sugar Company. This has been achieved by natural wastage, early retirements and non-replacements without any friction and has been made up for by greater productivity. This is evidenced in the production costs of 1982 which increased by a mere 3 per cent, the lowest in the company so far. That shows the commitment of the Tuam workers to maintaining their factory in Tuam and to maintaining their jobs. The fact that they were prepared, by natural wastage, voluntary redundancies and so on, to effect a reduction in the work force of 90 people by the end of 1983 shows that they are really concerned about the continued operations in Tuam.

A lot of noise has been made about the losses sustained in Tuam. We were told that in 1981 there was a loss of £2.5 million. That loss has been reduced to £1.1 million in 1983. That has been achieved principally by increased productivity with fewer workers and greater acreage. This trend of reduced losses can be maintained and, the workers having indicated their willingness to increase further their productivity, a further labour saving of £500,000 is possible. That, together with the capital equipment savings, will reduce the loss to an insignificant level.

If you consider the return which this factory is making to the company, to Tuam and the western region in particular, then I do not think any Government in their right senses could even contemplate closure, because Tuam factory contributes £12 million directly to the national economy by way of return to its growers, workers and to the State. Bought-in goods and services for 1982 amounted to £3.5 million. The cost to the Exchequer in the event of Tuam closure would amount to £2.2 million by way of loss of PAYE, PRSI and the payment of unemployment and PRSI benefits. That shows that in the present circumstances it would be absolutely ludicrous even to consider the closure of that plant.

In these days of recession and massive unemployment, factory pull-outs and closures, it is imperative that every job that can be saved must be saved. We know that the Oireachtas sub-committee some years ago recommeded the closure of this plant, but only after alternative employment would be found. That alternative employment has not yet been found. For that reason, we are asking here today by this motion that this factory be allowed to continue its operations in Tuam. The workers have shown that they can do so and can do so economically. For that reason I hope that the Minister today will be able to give us an assurance when he replies to this motion that this factory will continue in Tuam. From the figures that I have quoted it would be absolutely ludicrous even to contemplate its closure at this time. If the economy was booming and if there was a possibility of some big industry coming to Tuam which would take up the slack from the sugar industry, then maybe one could contemplate a switch over from the sugar factory to that industry. But there is no possibility of any major industry coming to Tuam and the Government realise that. Accordingly we are demanding that this factory be allowed to continue and the position of the Government in relation to the factory be made known right away because we cannot allow the despair, gloom and despondency to continue any longer. That is all I will say on the factory. My colleague, Senator Killilea, will be elaborating further on it in a few moments' time.

The other part of this motion deals with the agricultural industry in general. This motion has been tabled for some considerable time and even though we were concerned at the time we put down this motion that things were bad in agriculture, they have got steadily worse over the last few months. It is not just the Fianna Fáil Members of this House who are concerned about the cut-back in State assistance to agriculture. Every farmer and everybody involved in agri-business is worried by Government's lack of interest in the agriculture industry. The Government have been in office for almost one year. During that period they have destroyed the confidence of our farmers by their dismal failure to show leadership at a time of crisis in the agricultural sector. If one examines some of the decisions made by the Government in the past year, one cannot be blamed for believing that the Government are hell-bent on destroying our greatest industry.

With one stroke of a pen the Government withdrew in the region of £11 million from the agricultural sector by refusing to accept applications for grants under the farm modernisation scheme. This was a retrograde step and one which the Government should not have contemplated, at least until they had a revised scheme ready to replace the farm modernisation scheme. The Government may boast that they have saved the Exchequer £11 million but the loss to Irish agriculture and to the building industry is far greater than £11 million. These grants were an incentive to farmers to improve their farm buildings and to make their task easier. It also gave an opportunity to small building contractors to get useful employment in their own areas. Unfortunately, those people are now going to their local Garda stations to sign on for the dole. They would not have had to do this if the Government had not withdrawn applications under the farm modernisation scheme. Any builders' supplier will tell you that the cancellation of those agriculture grants was the biggest blow they have ever received because they have had to lay off or introduce short-time employment.

We are told that a new scheme will come into operation in November but we are not told what kind of a scheme it will be or who will qualify for the grants. I am convinced that only development farmers will qualify for those grants. If that is so, the Government should tell us, in relation to the west in particular, what they are proposing to do for the 95 per cent of farmers who have no hope of achieving development status. Are the Government going to say to those farmers, "Sorry boys, you have no part to play in our scheme, you had better find some other means of subsistence"? Western farmers are not going to accept that kind of treatment. They have enough handicaps already to overcome in relation to land structure, fragmented holdings and even the weather without being excluded from any development scheme being introduced by the Government because they will be excluded if this scheme is confined to development farmers. Fewer than 5 per cent of farmers in the west are in the development category. The Government have also deprived many part-time farmers of grants under the headage schemes by reducing the qualifying income limit from £5,100 per annum to £3,500 per annum. Many of those farmers were leaders in their areas because the money they received they ploughed back into the industry and the whole economy benefited as a result. The last straw, as far as agricultural development is concerned, was the decision by the Government to bring all farmers into the tax net. Because of this decision, farmers are reluctant to undertake an investment plan. Coupled with this is the Government decision to impose a charge of £20 for each visit by a Department officer dealing with farm development plus a cut-back in mileage allowance to farm advisers.

That is the picture of the continued efforts by the Government to undermine the agricultural industry. Agriculture, despite the continuing concern about structural surpluses, is, and will continue to be virtually the only industry which enjoys a guaranteed outlet at remunerative prices for the greater part of its output. At a time when workers in many other industries face the prospect of a reduced working week, early retirement or, or at worst, unemployment, and when every effort is being made to create additional employment, the income level, stability, dignity and independence of farming, even on quite small farms, cannot be ignored. The Government should take note of that fact before they introduce any more austerity measures in this area. The curtailment of grants, the taxation issue and cut-backs to the advisory service to agriculture are nothing short of a direct attack on our greatest industry which in times of recession has demonstrated its ability to survive and a resilience not commonly found in many of our heavily subsidised industries which rely on imported raw materials.

It now seems that agriculture alone can save the national economy. The introduction of suitable schemes backed up by an advisory service has made a great impact in the past as can be seen from the result of the small farm scheme, the farm modernisation scheme and the World Bank livestock scheme. In the small farm scheme, output of participating farmers increased seven and a half times faster than non-participating farmers. As a result of the World Bank livestock scheme, livestock numbers increased 47 per cent over the first two years of the plan. Labour income increased by 192 per cent between stage 1 and stage 2. These figures show what can be achieved if the Government have the will to promote suitable schemes instead of disbanding existing schemes as they have been doing for the past number of years.

Ireland has unique advantages for the production of agricultural commodities and products. Results from a number of studies have concluded that there is enormous potential for increasing output in agriculture even with our existing technology and our present resources in land and livestock. However, we need to investigate more fully the human, financial and marketing resources essential to the realisation of that potential. Ultimately our success in realising the potential of our agriculture will depend on how successful we are in developing viable and profitable agriculture based commodities and products which will compete successfully on both the home and foreign market. While our performance on foreign markets may be quite impressive, we have been less than successful on the home market in competing with imported food items. This is evidenced by the level of food imports, which amounted to approximately £753 million for the preliminary year 1982. This is a very sad statistic. Clearly, a large percentage of our home market is being captured by goods of foreign origin. A considerable proportion of this imported food could readily be produced here, providing much needed employment on farms and in processing plants.

Many food imports are branded products which benefited from very effective marketing, and consumers may develop loyalty to a particular brand. This helps to insulate the branded products against competition. This makes it more difficult to compete effectively with branded imports. In order to achieve even partial success we must improve our overall marketing quickly and adopt a very positive approach towards advertising and promotion. We can increase sales by better packaging and presentation and a better product service. This is very essential, and it has been brought home to all of us in recent years when we see what we have to compete with from abroad.

In contrast to the professional approach of our competitors, our marketing seems to be unplanned and ineffective. While millions of pounds worth of potatoes were being imported during 1982, thousands of tonnes of potatoes produced on Irish farms could not be sold at any price. It appears that a substantial proportion of the home grown crop was left to rot on farms where the potatoes were grown. This is a national disgrace and should not happen.

The situation highlights the urgent need to implement a national plan for agriculture which would involve a co-ordinated approach by farmers and processors and take due account of the market needs and opportunities both on the domestic and export market. The necessary marketing machinery should be established to enable the implementation of suitable marketing plans which would synchronise with the national plan. The implementation of such a plan integrated with suitable marketing programmes would contribute enormously to the rational and profitable development of Irish agriculture. Many years ago the Dutch, Danes and the Swedes developed advanced marketing structures — machinery which made an immense contribution to the development of their agriculture. Their farmers have the confidence to produce in the knowledge that there will be a stable market for their produce. It is vital that we also adopt a market orientated approach to the development of our agriculture.

The implementation of a national plan, coupled with more effective marketing, will help boost our exports and protect our home market from the inroads being made by imported food products. In the absence of a plan, effective marketing of many products on the domestic or foreign markets becomes very difficult. At this late stage, a national plan for agriculture must be implemented. The plan should be a comprehensive and co-ordinated one, designed to facilitate and promote rational development and more effective marketing. It is important that agencies such as CBF, the co-ops, CSAT, ACOT, the farming organisations and farmers themselves have a very positive market orientation. The experience and expertise of those organisations already involved in the development of agriculture and in the processing and marketing of agricultural produce should be harnessed in order to achieve the co-ordinated development of a dynamic food sector. Without this type of approach it may not be possible to maintain agricultural output at its present level.

In the limited time available I have tried to highlight some of the difficulties that farmers experience in the present climate. I have put forward some suggestions that might help to eliminate those serious problems that are affecting the agricultural sector at the present time. Everybody agrees that there are problems. A number of people have signed an amendment to this motion here tonight, but most people believe that the Government are not doing enough to help farmers and agriculture in their present difficulties. That has been highlighted by me in the cuts that have been made in grants and so on. I would ask the Minister, who is present at this debate, to pay more attention to the problems affecting Irish agriculture. If the agricultural industry fails then there is no point in trying to build up the other sectors, there is no point in encouraging foreign industries and trying to pay them large capital grants to set up their industries. We have an industry here that has a solid foundation. It has a good future but it needs the determined leadership and support of the Government. For the past 12 months the agricultural sector has not been getting that support or leadership.

Mr. Killilea

I gladly second this motion. In my contribution to the House, I am going to pay particular and singular attention to the situation regarding the Tuam sugar beet factory. In saying that, I may be pre-empting the movement of an amendment to the motion which is on the agenda, but I want to point out clearly that the Cathaoirleach should not have accepted that amendment because it is not relevant to the motion that we have down concerning the Tuam sugar factory. I am disappointed and annoyed to think that the Government benches could, on an occasion like this, broaden the sphere by a few simple words and get it through on the agenda with this motion. It is not relevant to the question we ask. We are specifically talking about Tuam and Tuam only and we are not talking about the sugar industry in general. I want to be emphatically clear on that. It is on the Clár and it probably will be moved.

I want to commence by saying clearly and emphatically, and reiterating Fianna Fáil policy as prescribed and as described by the Leader of the Fianna Fáil Party both as Taoiseach and Leader of the Opposition when motions similar to this were discussed in the other House, but in particular when he was Taoiseach. I want to quote from a speech made by him in Tuam at a time when it was very important to the town that the Tuam sugar factory issue would be dealt with at the highest level in Government. I refer to the statement of 14 July 1982, page 3, where he stated clearly and emphatically

The location of a sugar factory in this town was not motivated by profit considerations alone but rather to promote development and employment in the West of Ireland. Special social considerations were and still are a vital factor. In the view of this Government, the Tuam sugar factory is a necessary and integral part of the whole sugar company complex providing badly needed employment locally and producing a quality product to the Irish consumer. That is the reasoning behind the Government's commitment to the retention of the Tuam sugar factory and will remain so.

That still is and will continue to be the Fianna Fáil policy towards the retention and the continuation of not alone the sugar factory but the sugar industry in general on the west coast.

I want to turn to a volume of the sugar factory monthly magazine called An Biatas in which the Chief Executive, Mr. Maurice Sheehy of the sugar company was questioned on this particular aspect in a question and answer basis, Volume 27, No. 1, May 1983.

Question: But what is the position now regarding the Tuam Sugar factory?

Answer: The last Coalition Government decided that Tuam sugar factory should stay open for one year. Subsequently, the decision was made by the following administration that the Tuam plant would stay open indefinitely. The situation now in May of this year is that we have to produce further plans to the present Government based on the profitable operation of all activities.

There can never be a denial that this Government changed the course of events by that demand to the sugar company prior to May of this year.

I read all of that article from the executive of the sugar company and I looked on it with awe. Mr. Sheehy was defending the Irish sugar industry and the state that nationally it finds itself in. In my time associated with the Tuam sugar factory and the life of that county, the factory has been very close not alone to my heart but to the hearts of all the people of Galway. I claim that the problem of the Irish sugar industry today has not been created by the farmers of this country, by the workers in the sugar industry, but by consecutive Governments in one way, but in particular by the management structure and by the performance of the most recent executive management of the Irish Sugar Company. If they want to challenge me outside the House, I will back that with facts. Taking into account the importance of that industry in the west of Ireland, I ask Senators on the Government side to urge and persuade the Taoiseach and the Minister for Agriculture that forthwith the decision will be made that the Tuam sugar factory and the whole catchment area of the west be given the amount of money necessary so that the industry can continue on a viable basis. The members of the workers' action committee have come to the Minister and the Taoiseach not on one occasion but many times and they have made their case. The case they made most recently has been the most fundamental part of it. I would like to refer to one part of their report. In a letter to the Minister on their submission they made the following statement:

Our operating loss for this year should be approximately £1.1 million which includes both depreciation and interest on working capital, both of which would remain if the Tuam sugar factory was out of the system now.

We have arrived at the financial stage when Tuam sugar factory and its operation are no longer a strain on the economic life of the sugar industry in general. If I am wrong and if the knowledge made known to the workers and subsequently to the Minister is to be contradicted, today is the day it should be done by the Minister. Today is the day when the Minister for Agriculture, who is here with us, should stand up and say to the people of the west of Ireland, "Yes, we will retain the sugar factory and we will make the finances available for it". That is the catch 22 situation he is in. The company will still have the losses if it is closed. They will have a lot to gain if it is kept open.

There are many aspects of the reasoning behind that statement. Two years ago when the workers in the factory were asked to make an effort to modernise themselves and to synchronise themselves into the industry, they did so. As Senator Hussey rightly said, more than 80 jobs have not been filled, so there are 80 fewer working in that industry. Yet the secret vibes that one gets back from St. Stephen's Green House are that if Tuam ever be reprieved it will be through 100 more redundancies. You cannot have it both ways. They started the Tuam campaign today with 86 fewer people operating a bigger tonnage in a campaign than three years ago. That is a fantastic achievement, something that must be credited to the account of the workers of the Tuam factory.

Having said that, there is another aspect which one must also take into account. Since 1974, £46 million has been invested in capital expenditure in the Irish sugar industry in their plants. Of that total figure, £1.1 million is all that was spent on the Tuam plant. Is it not plain from that statistic that the executive management of the Sugar Company have feared a nose dive for the Tuam factory and they hoped the people would accept closure?

I do not know who is going to speak from the other side on this motion but I do not want to hear a general synopsis of our sugar industry as a ploy against this motion. I beg and beseech those who will be speaking to remember that we are specifically here today talking about and talking on behalf of the retention of the Tuam sugar factory. We will talk then about the other aspect of it, the farming aspect.

Last year for the second time in the history of the sugar industry in the best efforts were made by people who wished the Tuam factory to continue. A few years prior to that, great efforts were made to ask the farmers to grow beet. Last year they over-produced. This week alone, because the Sugar Company had not made a decision or the Government had not made a decision concerning Tuam, 500 acres of beet will be lost to next year's campaign. We beseech the Minister to make a statement concerning Tuam here and now so that the programme for next year can begin.

The people in general do not know the youth involvement in the growing of beet. The statistics show that in the west 80 per cent of all beet grown is being grown by young farmers. We hear all this talk about levies for youth and employment for youth and all the balderdash that goes on, and here it is working for itself in the west, but the Government will not give a fair slice of the cake, will not make moneys available to Tuam, or make a statement concerning it.

The workers' action committee in Tuam have committed themselves totally and unequivocally to making a more viable unit in Tuam. We have seen the great efforts of the farmers in growing more beet and meeting the demands of the sugar factory for the raw materials. Organisation like the Tuam Chamber of Commerce have travelled from Tuam today to be in the Seanad for this debate, to show how important this decision will be for the whole economic fabric and the commercial working of the town of Tuam and its surrounding district. That is how serious this is.

Fifteen minutes is a short time and I have to omit many of the things I wanted to say. I will end by saying I am personally aware that the inter-Departmental committee who sat to make recommendations on the Tuam sugar factory have sent them to the Government. Governments have sat on them for some time and failed to make a decision. I beseech the Minister for Agriculture to make that decision now so that we can go ahead and make a fruitful conclusion so that the sugar industry, the growers and the workers, can be relied upon in the forthcoming year.

I expect to be calling a vote on this issue here this evening. In so doing I will note the names that the Government side put to the amendment to this motion. I do not see one west of Ireland Senator having his name attached to it. They went further afield to lay the decoy and throw the scent as it were off the Tuam sugar factory issue. I appeal to Senator Michael Higgins from Galway, from the county in which we live, to sit out on this vote this evening in this House. I call upon another constituent, Senator Ulick Burke, to sit out on the vote in this House this evening. I call upon the Roscommon Senator Connor to sit out on this vote. I call on Senator Durcan and Senator Higgins from Mayo to sit out on this vote this evening; and of course to finish it off I call on the Donegal Senator, Senator Loughrey, to sit out on this vote. I do not mean that by sitting out they want to bring down this Government. I want them by sitting out to claim for us that Seanad Éireann is a functional place and a decision-maker, that we will ensure by our votes in the strongest possible terms that this Government will make the correct decision in favour of the retention of the Tuam sugar factory. I have long gone past my time. I thank you, a Leas-Chathaoirligh. I want to say in conclusion——

An Leas-Chathaoirleach

You made the statement yourself that you have gone past the time.

Mr. Killilea

Give me one minute. I note the absence from this House today on a most important issue of Senator Michael Higgins. He must come out from under the bed and make the necessary decision to impress upon the Government, and to tell the Taoiseach that he will no longer serve on that side, if the right decision is not made for Tuam.

Mr. Hourigan

I move amendment No. 1:

To delete all words after Seanad Éireann and substitute the following:

"supports the efforts of the Government to put the sugar industry on a viable footing and to ensure the continued progress and expansion of Irish agriculture."

In moving the amendment I would like at the outset to make it very clear to Senator Killilea that the amendment in no way was put down to distract attention from the sugar factory in Tuam. Tuam is part of an overall scenario — it cannot be taken in isolation. It is part of the Irish sugar industry and for that reason we must be sensible and reasonable.

Time being very limited, one cannot deal with all the matters one wants to. Very briefly, I believe earnestly that when we refer to the Irish sugar industry and its pitfalls and weaknesses we do not in any way suggest the closure of the Irish Sugar Company plant in Tuam. That is an important point. Senator Killilea assumed, incorrectly, that the omission of names of persons from the amendment more or less automatically suggested that. That is not the case.

Mr. Killilea

Then why are they not on it?

Mr. Hourigan

I would like briefly to run through some facts in relation to the Irish Sugar Company in its totality. The sugar company was profitable every year except for three, between 1934 and 1979. The company through all those years was one of the most progressive in the semi-State sector. It contributed greatly to rural Ireland and to the development of Irish agriculture through beet processing, sugar manufacture, importation of fertilisers and making them available to farmers, developing and manufacturing agricultural machinery especially for the beet crop, breeding and developing beet seed varieties especially adaptable to Irish conditions, providing an agricultural advisory service for the farmers and many other services.

In addition it set up a food industry, Erin Foods with many factories located in rural areas providing employment in remote areas like Skibbereen, Glencolmcille and so on. In recent years, let us be factual and frank, in 1979-1980 we saw a loss of £11 million. In 1980-81, the loss was £12 million; and in 1981-82 the loss was £22 million. That makes a loss of £45 million in that three-year period. Unfortunately we can look forward to a further loss at the end of the current year.

There are many reasons for these heavy losses, such as large investment of capital in sugar factories, heavy losses sustained in Erin Foods, the unsatisfactory financial base of the company, high inflation in Ireland with relatively low price increases for beet in the EEC.

While conceding that some of those points are very relevant, there is no doubt that we must look back and see where things went wrong. I would submit that failure to modernise our sugar plants before entering the EEC caused one of our major problems.

I would suggest that Erin Foods has been a major loss maker since its inception. Yet nothing appears to have been done either to contain the losses or to bring the company into profitability until the last couple of years by closure of a number of plants such as Carlow, Skibbereen, Tuam, part of Matterson's in Limerick, east Cork and so on. I would say that had rationalisation taken place at an earlier time many problems could have been avoided. Erin Foods had been subsidised by the sugar industry down through the years and it appears that the board and management were negligent in letting this situation continue to the extent that the sugar company itself was put in jeopardy.

I agree with Senator Killilea that there has been negligence on the management side of the sugar company. The company got from the State £30 million in October 1982. A Bill was passed by the Oireachtas to enable the State shareholding to be increased to £75 million. The company, however, previously got £7 million in shares from the State. The balance that could be provided by the State to bring the shareholding to £75 million is £38 million. We now understand that the company is requesting that this equity be provided almost immediately.

I would say that the Government are most anxious that this once great semi-State body should be properly structured and financially organised. The Government want to see it return to profitability including, I would submit, a Tuam dimension. They must ensure nevertheless that the taxpayer will get value for the money he invests. At present all the sugar companies within the EEC are showing substantial profits. The British Sugar Corporation showed a profit for last year of £60 million.

It is no secret that there is a major problem at management or executive level in the Irish Sugar Company. Senator Killilea referred to this and I agree on that point. The management problem was highlighted by the major fraud that took place in Erin Foods which has not been satisfactorily explained. A further fraud recently occurred in Carlow for which prosecution took place a short time ago. These two factors, together with a claim from the worker-directors requesting on behalf of the workforce that the Chairman and Managing Director should resign, leave one with an uneasy feeling that all is not well at high level in the sugar company. Clearly the Government must satisfy itself on these issues before taking action.

The Tuam sugar factory, as part of an overall rationalisation programme, requires rationalisation, and when we talk about rationalisation we must mean rationalisation in the true sense of the word. It must not be just a cover-up phrase. I suggest that the social dimension which applies in Tuam must be taken into account by the Government before any decisions are reached with regard to that factory.

I am quite certain that the Government will weigh up all these decisions very fully. We should be thinking very seriously as to how we can increase our A quota from 182,000 tonnes at present, which this year we will reach and which last year we reached, and our B quota of 20,000 tonnes. These quotas should be increased to a level of 200,000 tonnes in the A quota and 30,000 tonnes in the B quota. We ought to have a situation which obtains within the rest of the European countries where 25 per cent of the total A quota is the B quota. At present the percentage is ten. That is important.

Having said that about the sugar company I want to make some remarks about the rest of the agricultural scene. We talk here about expansion of Irish agriculture. Reference was made earlier to lack of confidence, to the erosion of confidence in the last 12 months. It is ridiculous for anybody to ignore the fact that long before 12 months ago confidence was well and truly shattered in Irish agriculture. This is something that has been coming for many years particularly since 1979 but with Government direction and the introduction of their plan for agriculture we will see that confidence changed and improved significantly. The Farm Modernisation Scheme will be reintroduced shortly and that will help. The present taxation system was referred to. There is nothing wrong about assessing people for tax provided the system is equitable and fair. Of course, tax assessment and tax liability are different things.

Our success or failure as a country which relies so heavily on agriculture will depend on our success or failure in securing from the EEC the very best deal we can. At present we have a very serious situation confronting us in the proposal to introduce a milk super levy. I believe that the Taoiseach, the Minister for Agriculture, the Minister for Finance, the Minister for Foreign Affairs, backed by the entire Cabinet, are doing trojan work to make certain that we will come out of this as unscathed as possible. Our leaders have been fighting a very tough lone battle in Europe on behalf of the Irish people. The same can be said of the Irish farming organisations. They are very much alone at farming organisation level in Europe.

We must remember that the super levy proposed, or a quota system, call it what we like, suggests that £200 million would be taken out of the Irish economy. That would reduce our net beneficiary situation, which is £500 million, by £200 million, which would erode very seriously the advantages of being in the Common Market.

We must look at the situation realistically. The Government need the support of all farming organisations and of all political parties in ensuring that we get from the European discussions at the present time the very best arrangement possible. If we can succeed in getting exemption for a realistic period of time — we would hope for from five to seven years — we can then move forward. Farming is very much part of the economic situation at present.

There are a lot of farmers in serious financial difficulty, and without the opportunity of their moving forward and developing their enterprise, there is no way they can solve their problem. We must ensure that for the future the price increases will accord with inflation.

The national plan which the Government will soon be producing will be concentrating on livestock number increases, on credit and on those vital areas that will move agriculture forward. Taking this composite motion dealing with the Sugar Company and dealing with the economy there are three important factors. The whole structure of the Sugar Company has to be looked at with particular reference to management. We must consider also the Tuam factory and have regard to the social implications as well as to economic factors, bearing in mind that the Sugar Company want to close the Tuam factory. This is no secret.

We must address ourselves very seriously to the financial problems at European level, because without succeeding at that level there is no point in engaging in smaller things, important though they may be in their own right. Irish agriculture will move forward very firmly. It gives me great pleasure to move the amendment.

Mr. Lennon

I second the amendment and reserve the right to speak later.

Minister for Agriculture (Mr. Deasy)

I welcome the opportunity to partake in this debate. I regret I was unable to be present for all of Senator Hussey's speech but I am sure that as usual it was very constructive and well ordered. One of my problems these days is that I do not have enough time to attend to all the business in my Department. In the media today I note that I have been criticised for not being in Germany. It is physically impossible to be there, having returned from Luxembourg after two days of almost non-stop meetings and having to attend the Dáil and Government meetings today and tomorrow. I would have loved to have gone to Cologne and Munich but if I had gone I expect that I would be accused of being on a junket.

Mr. Killilea

I would be shouting about you here.

Mr. Deasy

This is a motion of two parts covering as it does the specific subject of sugar, specifically, Tuam, and the more general agricultural development area. Dealing first with sugar I might mention that Senators already have had the opportunity on three occasions in the past three years of considering the affairs of the Sugar Company. Those who were Members of the House at the time will remember debating, in March 1981, the excellent report on the company drawn up by the Joint Committee on State-sponsored Bodies. They will recall the committee's identification of the fundamental problems facing the company: how to set their finances in order, and how to tighten up the operation on a strengthened capital base, so that losses would become a thing of the past. Since then, Government action has concentrated on these two separate but interdependent areas, the restructuring of the company's capital and the rationalising of their operations.

Before considering what has been achieved so far under these two headings, I should like to place once more on the record of this House the reasons for the Sugar Company finding themselves in their present condition. It is not, by any reckoning, a condition which we can view with complacency. For the past four financial years — Senator Killilea alluded to this in his contribution and he said he did not want to hear all the same reasons repeated — losses have been substantial: £11 million in 1980, £12 million in 1981 and £22 million in 1982, though there were extenuating circumstances for that very large figure. The accounts to be drawn up for the year ended on 30 September last will not be much more encouraging. On that same date, the company's borrowings were well in excess of £70 million. The pattern of payments for beet in the past year means that borrowings will be little short of £100 million by the end of February next.

This is, by any standards, a pretty black picture. It depicts an enterprise which, if it were privately funded, would long since have gone to the wall. It is a measure of the Government's concern for the future of the sugar industry that this was not allowed to happen.

What, however, they are doing is to insist that the hard decisions necessary to bring the company back to profitability be taken. Indeed, some hard decisions had also to be taken by our predecessors in office in relation, for example, to the closure of food processing at Carlow and Skibbereen. When mentioning figures and the number of people who have been let go from the Sugar Company and the various factories in recent times, I might point out that three years ago the Sugar Company employed more than 3,700 people. Today they employ 2,795 people so there has been a massive reduction in numbers right through the company's operations and not specifically in Tuam.

Mr. Killilea

That was the closure of Erin Foods.

Mr. Deasy

No. It has been very broadly based throughout the company's operations whether it was Thurles or Carlow, Mallow or Tuam.

Mr. Killilea

What is the figure in respect of headquarters in Dublin?

Mr. Deasy

I have not got the specific figure. It is all inter-wound in the global figure I have given.

Mr. Killilea

A nosedive job. They are good at that.

Mr. Deasy

I expressed my lack of sympathy in that regard during the previous debate we had here but the point is well taken.

An Cathaoirleach

I do not think that the Minister should respond to interruptions from Senator Killilea.

Mr. Deasy

How could one resist interruptions where Senator Killilea is concerned? He is at his best when he is being interrupted. We always say one should not provoke him.

That is a very substantial figure of redundancies, virtually 1,000 in the past three years. This Government have set the standard of commercial viability of the Sugar Company as a target and have directed the company to perform accordingly. Funds are being committed to the task of getting the company back on their financial feet, of getting the balance-sheet right.

Up to this, rationalisation has struck most directly at the industrial food business. It gives me no pleasure to say this but we have to recognise that what appeared in the early sixties as an adventurous home-based initiative in the field of agricultural processing is now not so successful as had been hoped. Of the original Erin Food factories, only Mallow will be remaining in the industrial business, that is the business of preparing bulk-dried vegetables for incorporation into soup mixes and other products. Thurles still has the branded food business and the meats end of Matterson's in Limerick is also profitable. The East Cork Foods plant at Midleton is on the point of closing down and the canning operation of Matterson's in Limerick closed last March.

We have, of course, learned lessons from this experience, hard lessons which will be of considerable help in our commitment to the food industry and which are also of vital relevance in securing the future of our sugar industry. The sugar industry must receive our full attention. If we are not competitive in producing sugar we will be up against it in terms of imports just as in the case of vegetables.

When the capital base of the company was broadened last year, one of the conditions attached to the provision of the additional funding was that a rationalisation plan be produced by the company pointing the way towards their return to viability. This plan, backed up with projections and relevant financial data, was submitted in June. It has been examined by the Departments of Agriculture and Finance in great detail and further clarifications and explanations have been sought and obtained. The conclusions drawn will form the basis of the decisions for action on various fronts that the company propose to take in the next three years. In recommending to the Government any further injections of capital I propose to monitor closely the efficiency and effectiveness of the company at all levels and the extent to which they meet the targets they have set themselves. I emphasise the words, "at all levels", from the top right down to the bottom.

As I stated, the Department of Agriculture and the Department of Finance have been scrutinising the report from the Sugar Company for some months past. It went to the other Departments in the Government some time ago and we have had their views on that report and on our observations. The matter is now being submitted to the Government for decision. I hope we will be in a position to decide within a reasonable time.

Mr. Killilea

How long?

Mr. Deasy

That remains to be seen. The Senator probably knows from reading the newspapers that we are discussing the Estimates at the moment in considerable detail, and it may be as long as a month before a decision will be made. I would not like to be too categorical in that regard, but I would be asking for a decision as soon as we can possibly have one.

Mr. Killilea

That could be a long time.

Mr. Deasy

It was Harold Wilson who said that a week is a long time in politics.

The action plan by the company covers the whole spectrum of their activities. Improved plant will lead to savings in manpower and energy. Computerisation will lead to a more efficient use of resources. Reorganisation will eliminate unnecessary duplication of functions. This is all non-contentious, and in line with good, I might say essential, business practice.

One item in the plan is not non-contentious, however, as the terms of the motion before the House remind us. The company have indicated that progress on their path towards viability requires that they cease sugar production at the Tuam factory at the end of the 1983-84 campaign. It is hardly necessary for me to say that the future of this factory has been under consideration for some time past. The broadly-represented joint committee I referred to at the outset made the first formal proposal in relation to the closure of Tuam. Since then the matter has come before Government on two occasions, in September 1981 and in June 1982. Very shortly the present Government will be asked to consider the future of the Tuam factory.

What will the Government have to decide? They will have to assess whether the considerations that up to now have led to postponement of closure are such as to justify the subsidisation of more than 200 full-time jobs and about the same number of seasonal jobs, to the extent of some £3 million a year. That is what it is costing the company to produce sugar at Tuam instead of producing the same quantity elsewhere in their more efficient factories. This is about £12,000 per annum for each full-time job equivalent at the factory.

Mr. Killilea

That is not so.

Mr. Deasy

I have seen that figure debated and contradicted, but those are the figures which we have received from the company. This is what the taxpayer would have to provide to keep Tuam open. It will be for consideration whether the taxpayer can do better for Tuam and the west in other ways.

I have met the Tuam workers' action committee. I have been impressed by their attitude, their genuine desire to safeguard the factory and their willingness to consider possibilities for greater efficiency and economies. As I have said before, I have been impressed very much by the attitude they have adopted. They realise the predicament the Government find themselves in and are doing everything possible. I said to them I would like if they would agree to some more economies and efficiencies but by and large I find that they are doing their best. I impressed on them that the Sugar Company as a whole must be viable.

The Government will also have to bear in mind the whole question of the future of the sugar industry in Ireland. Sugar is a product covered by a market organisation under the Common Agricultural Policy of the European Economic Community. Within the Community there is complete freedom of movement for sugar produced within Member States' A and B quotas. The total quotas for the Community come to about 11 million tonnes of white sugar. Community consumption is about 9.5 million tonnes a year. Therefore, 1.5 million tonnes are surplus to requirements. Usually this surplus is exported from the Community. Therefore milk is not the only commodity that is surplus in the European Economic Community. Sugar is also fairly considerably in surplus. However, if one of our EEC partners were to decide that the Irish market offered a more profitable outlet for its sugar, such a development would have serious reprecussions indeed for our relatively high-priced sugar market. It must be remembered that we could not block such imports, that we could not set up a system of protection. This is something that some politicians in this country conveniently forget when it suits them. Within the Community we cannot stop imports of agricultural produce, or any produce for that matter, from our fellow members of the EEC. It so happens that some of those members, particularly the French and the Belgians, and the Germans for that matter, are able to produce sugar at considerably smaller cost than we can produce it in this country. If they decided to export sugar to this country it would place our sugar industry in considerable jeopardy.

Senators may be aware even from today's news report of the presence of imported Community sugar on our market. I think the news report stated that we were importing as much as 10,000 tonnes per annum. My information is that we import about 6,000 tonnes per annum. Such imported sugar has had most effect, so far, in the manufacturing sector and has severe implications for overall sugar pricing. Unless sugar production costs can be cut to something approaching those incurred by our EEC partners, imports will continue, will increase and will force us out of our own market. The claim has been made that French sugar can be sold here at £10 a tonne cheaper than Irish sugar. That is something we must look at very seriously, bearing the possible consequences in mind. Let there be no doubt about it, our sugar production costs are high. They are reflected in retail prices which are above the European norm.

There is no doubt that the difference is accounted for by differences in the cost of production. These differences extend right through the process from field to factory. On the field, our been yields and sugar contents are lower. The distances over which we are prepared to transport beet to factories are, in continental eyes, quite unacceptable. Our unit energy costs are high, partly because of under-utilisation of plant, and partly because more energy is needed to get the sugar out of the beet, given the lower sugar content.

I notice that Michael Dillon in The Irish Times today comments on the fact that while the yield in the sugar beet harvest is quite high, the sugar content is well below average. That will create problems for us this year. Also we draw sugar beet to factories from considerable distances whereas on the Continent they draw their sugar beet from within close proximity, generally within a radius of ten or 15 miles of the sugar beet factory itself. That contributes to the fact that they can compete on much better terms.

Finally, by European standards, our factories are overmanned. All of these disadvantages are particularly acute in the case of Tuam. I remember being in Tuam during the summer. It was one of the few pleasant and relaxing days I have had since coming to office.

Mr. T. Hussey

It is always pleasant down there.

Mr. Deasy

We had a few exceptions.

Mr. Killilea

A few good cross farmers.

Mr. Smith

The Minister of State at the Department of Industry and Energy has a good time coming to him.

Mr. Deasy

Some of those people who make most noise and who are most unreasonable might bear in mind that there is a very definite pattern about the growing of sugar beet in this country. I heard it argued in Galway that twice or maybe ten times as much sugar could be grown if the contracts were provided by the company. That very same argument applies in every county. At Christmas I was inundated with constituents of mine who wanted beet contracts for 1983-84. That was the time when contracts were being drawn up. Sugar beet is probably the best money crop at present. Farmers are intensely interested in growing more beet. But, unfortunately, we cannot give them the acreage because of the quota system which exists in the EEC. We are extremely restricted in that regard. I have here a list which I requested from the Sugar Company as to the sugar beet acreage grown in the various counties in Ireland. This list is rather interesting. The fact is that a sugar plant can exist by getting sugar from virtually any part of the country. The factory does not have to be on the spot itself. For instance, Wexford has not got a sugar beet factory yet it grows more beet than any other county in Ireland, even more than is grown in Cork. It does not have a factory of its own. It grows 21,000 acres approximately while Cork grows 20,000 acres. On the other hand, Sligo, or Leitrim do not grow any beet while Mayo grows 467 acres. Galway grows 2,973 acres. Waterford, half of which is covered by mountains——

Mrs. Honan

The rest is oil.

Mr. Deasy

——grows 2,724 acres. That is not bad.

Mr. Killilea

How much do you think they could grow in Connemara?

An Cathaoirleach

I would ask the Senators to desist from interrupting.

Mr. Deasy

I make a comparison with Connemara. In Kerry they grow 696 acres of sugar beet, which is not a considerable acreage. In Roscommon 232 acres are grown. That is not great either. Longford grows 37 acres while Laois, which is a small county, grows 6,686 acres of sugar beet. Is not that astounding?

Mr. Ellis

One must take soil conditions into consideration.

Mr. Deasy

I have visited Laois a number of times and I did not think the soil was that good. Kildare grows 3,937 acres of sugar beet while the figure for Dublin is 496 acres. For Wicklow the figure is 1,745 acres, for Tipperary which is disappointing, the figure is 6,601 acres.

Mr. Kiely

What about Limerick? One must ask whether it is necessary for the Minister to give us all these figures, especially since there is not much time remaining to us for this debate.

Mr. Deasy

I did not include Limerick in order to save Senator Kiely embarrassment. In that county is grown the vast area of 90 acres of beet. I take the Senator's point. The Government have yet to decide on the future of the Tuam factory. They will have to decide on the basis of the kinds of considerations I have mentioned. For my part I am convinced that the sugar industry in Ireland has a future. I am also convinced that the will to put the industry back on a sound footing exists within the Sugar Company itself. When the Government make their decision they will do so in the light of the same convictions. As I stated some months ago, I have an open mind, as have the other members of the Cabinet, as to the future of the Tuam factory, irrespective of the recommendation of the Sugar Company. The same applies to my colleagues in Government. But there are tremendous financial pressures on the Government at present, and one would have to accept that we must bear all points of view and all those matters in mind.

Turning now from the specific sugar area to the overall area of agricultural development, I should like to focus what I have to say on the economic problems which the people of Ireland face today and on how the agricultural sector can contribute to their solution by making better use of our land. It is essential that the precise nature of our current economic situation be fully appreciated. In this connection, we must consider not only the position here in Ireland but also the wider international front, since we in this country are so dependent on external trade.

Our current economic situation is extremely serious. The extent of the problem can be seen from the five main economic indicators — growth, employment, prices, the balance of payments and the national Exchequer situation.

In terms of economic growth, since 1980 there has been no increase in the gross national product. The prospect for 1983 is no better. Indeed, taking account of changes in the population, which during the past decade has been growing at 1 ½ per cent per year, it is evident that on a per-head basis our economy has declined since 1980, by some 4 per cent. We are, of course, not alone in this situation, but the fact that other countries have had similar experiences does not make our problem any easier.

The growth in population in the seventies was accompanied by a similar increase in employment, but compared with the position two years ago the level of employment today shows a considerable disimprovement. For this reason, the Government continue to give a high priority to policies that will increase the level of employment, particularly youth employment. However, the problem of increasing employment has to be seen against the background of large redundancies, some of which unfortunately have occurred in the businesses of major traditional employers.

We will, however, only succeed in increasing our present level of employment and creating new jobs if the rate of growth in costs is brought down below the levels prevailing in competitive countries. This means that we must achieve a substantial reduction from the present 10 per cent level of inflation to a level of around 5 per cent. This reduction will have to be achieved in spite of the difficulties of reducing the current deficit and the problems on the external front.

The other economic factors I want to mention have perhaps a less immediate impact on the man in the street but are just as vital to our future national wellbeing. The first is the balance of payments position — the extent to which we pay for the food, materials and services that we buy from abroad. During the years up to 1978 we had run a small adverse balance on our current account; this deficit was easily sustainable because of the growth of capital investment with which it was associated. Since 1978 the balance of payments deficit had increased to reach £1,400 million in 1981. It has now been brought under control, and is forecast to fall this year to only a quarter of the 1981 level.

Our national Exchequer position is far more serious. The budgetary measures which we have already taken mark a positive and determined effort to return to the principle of living within our means. Even with the increases in taxes and the cuts in expenditure announced in the budget last January, we will expect a deficit of £968 million on current account this year. The Government's objective of ending borrowing for day-to-day purposes over a period of five years involves a reversal of the recent trend towards increasing Exchequer deficits. To achieve this aim will involve many difficult and unpopular decisions. We will not, however, bring down our high rate of inflation or bring our economy back under control unless we succeed in making the Exchequer pay its way in its current spending programme.

It is against this economic background that we must plan the development of our agricultural sector.

The Government, as their record of action on their programme for the agricultural sector has shown, are determined to implement new ideas and new policies. The achievement of our basic economic and social objectives will, however, depend primarily on the response to these initiatives.

There are three basic sources from which improvements will come. I do not want to put these into any special order — progress in the agricultural sector depends on all of them. These three sources are the Government, the EEC and the farmer. The Government fully recognises their own responsibilities and, as I have said, we have already put into operation many new measures. However, the severe limitation of resources has eroded our capacity to complete our programme in full. Notwithstanding this, the Government have committed additional expenditure towards the support of farmers' incomes. For example, over the 12-month period ended March 1980, some 100,000 direct payments totalling £23 million were made to farmers under the various headage schemes. In the current 12-month period, over 400,000 payments will be made, totalling over £105 million, of which about half comes direct from the Exchequer. This represents a substantial underpinning of farmers' incomes by Government action. The balance comes from the European Community which, as I mentioned, is the second source of farm improvement. The other main contribution from the EEC takes the form of support through the CAP for the prices of our principal agricultural products and also through special aid measures. As Senators know, I have a little problem in Europe at the moment with one of those products, that is, milk. Since Ireland's accession to the EEC, the Common Agricultural Policy has given enormous benefits by way of market supports for our farm produce.

Senator Hussey said that we are not doing enough for the farmers. When I was in Opposition I said the same thing to the Government of the day. I want to point out that I have no objection to Opposition Deputies or Senators, or Government and Independent Deputies or Senators saying publicly that the Government should provide more money for agriculture. I need a little push a lot of the time. We all do, whether it is Deputy Lenihan, Deputy Dukes, Deputy Gibbons or Deputy MacSharry. If the farming lobby outside in the farming organisations or here within Leinster House is criticial and demands more, I do not think that is such a bad thing. I do not object to it. It gives me a little more leverage at the Cabinet table, provided the demands are made in a constructive way. We can never do as much as we would like to do for our own Department, our own industry. There is only so much to go around. One must have a very broad aspect in life——

Mr. Killilea

It is a very broad aspect and it is no joke.

Mrs. Honan

If the Minister would sit down we might have a chance to tell him about it.

Mr. Deasy

Conditions in the agriculture sector here have improved remarkably, albeit from a very low starting point. However, at the same time, sizable problems of over-production now exist in the Community, giving rise to considerable budgetary commitments and difficulties. It would also be quite unrealistic to maintain in 1983 that the Community arrangements should remain totally unchanged. This is not to say that we go along with those countries who would wish to see a dismantlement of the CAP guarantee system — quite the reverse.

At the European council at Stuttgart the Taoiseach was quite clear in his statement on Ireland's position. He indicated that any future discussions would have to take account of such important elements as farm income and food security, as well as the wider issues of trade and employment. He also spelt out the unacceptability of any proposals which could freeze existing production levels, for a country like Ireland, with low productivity and heavy dependence on agriculture.

We have always defended and will continue to defend the basic CAP principles of market unity, financial solidarity and Community preference. I want it to be plainly understood that Ireland will vehemently resist any attempts made to dilute these fundamental principles, and it is primarily because the Common Agricultural Policy is of such importance to us that we will continue to be its defender from unjustified attack.

The Community must find a solution to the problem of market imbalance which is posing such a threat to its continued survival, and we will be prepared to support reasonable and equitable measures to this end. It is now obvious to all that we can no longer depend on the generous EEC price increases negotiated in the past. The reality is that we will have to generate much of what we gain through our own efforts.

The solution adopted at the end of the year will have far-reaching consequences if it is to resolve the persistent financial problems which have plagued the Community for so long and inhibited the expansion of existing policies and the development of much needed new ones. However, I am confident that these decisions will be taken in a Community spirit, that they will be acceptable to all member states, and will ensure the future development of the EEC.

Given the serious economic situation, we cannot resolve the difficulties of our agricultural sector, or of any other sector, through recourse to even larger external borrowings. There is no such easy panacea that we can turn to in order to obtain an instant relief to our ills. Recovery must come from our own efforts, not from further props in the form of greater borrowing from outside. Government policy involves a reduction in the current budget deficit and a reduction in borrowing, particularly borrowing from outside the country. We must make better use of our resources by our own efforts. This policy must apply not only to our national situation but right down to the individual farm.

We have a major task in the agricultural sector, one that requires the most positive efforts of all of us who are directly involved in it. As I have said, we must see that we get the best possible return from all the resources that are already available in the agricultural sector; we can only expect more resources when we have achieved a high level of efficiency in the use of the resources we already have. This policy must pervade every level of the agricultural sector. The Department of Agriculture this year will spend a total of about £339 million of which £256 million comes directly from the Exchequer. We shall be examining every aspect of this expenditure, as well as public expenditure in other areas, to ensure that Exchequer resources generate the greatest possible return. The availability of Exchequer finance will depend upon the maximum return being derived from the resources already available.

Every farmer needs to adopt the same approach. He must look at all of his resources — land, labour and the capital invested in the farm, as well as his day-to-day expenditures, to see that they are giving the best possible returns. Of course, many farmers already do this, but the time is now opportune for a further and an even closer scrutiny.

Senators complained that I was speaking for too long but if they insist on putting down such a general motion which also contains specific items, I have little option but to cover the contents of the motion.

Mr. Killilea

It was not that we meant. We just wanted to hurry it up.

Mr. Deasy

I thank this House for giving me the opportunity to speak on these important matters and I am sure that Senators will indicate their confidence in the Government to further the cause of Irish agriculture.

Mr. B. Ryan

There is a certain sacredness about agriculture in this country in the way that somebody like myself who does not have a direct connection with-agriculture can often get the impression that he is walking into very dangerous ground by daring to speak about agriculture at all. But certain industries in this country have very substantial lobbying abilities and are noticed in a very substantial fashion. I am a member of a branch of the engineering profession which works in an area of manufacturing industry which produces exports almost equivalent to those of the entire beef industry of this country, that is, the chemical industry. Yet I would not take exception to anybody in this House talking about the chemical industry. I would be delighted to hear the whole area of manufacturing industry discussed by people from farming backgrounds, from legal and business backgrounds and so on. There is no real reason why people should not speak on the whole area of agriculture and its future in this country, because quite obviously the future economic prosperity of the country and the future of agriculture are inextricably linked.

The motion, in the best traditions of this House and of Fianna Fáil, is full of noble sentiments. Nobody, with one or two exceptions I suppose, could disagree with the motion. The details we could argue about forever, but as the Minister said everybody believes that everybody should lobby vigorously on behalf of agriculture.

What are the realities of Irish agriculture? The realities are that it is, as we have had to state publicly in Europe in recent times, pathetically under-developed. As recently as this afternoon in the other House I heard the Taoiseach explain yet again the inadequacy of our dairy industry on the basis of 100 years of commercial exploitation by the other island and so on. There is, of course, some truth in that, but it is about time that we got away from pointing the finger everywhere else except at ourselves for our own inadequacies. It is not anybody else's fault that we have a desperately inadequate research budget on agriculture. It is nobody's fault but our own that in the whole area of market research, product development, product research and marketing we have a most inadequate, a most incompetent, a most disorganised agricultural industry. That is our fault and nobody else's. The fact that we have not in 60 years of independence managed to develop a single successful innovative product based on agriculture is a reflection on the whole agricultural industry and, indeed, on the whole political system. The most recent success of an agricultural-based product, the cream liqueur being produced in huge quantities at this stage, was the product of the research of an English-based research laboratory. Fortunately for us it happens to be manufactured in this country, but the fact that it was not a product of Irish research is a reflection of our inadequacy and the inadequacy of our agricultural development.

The inadequacy of agricultural education is nobody's fault but our own. The fact that we have the lowest level of participation in third level education in the area of agricultural education almost anywhere in the world is nobody's fault but our own. That we produce fewer third level graduates in the area of agriculture is nobody's fault but our own. That we have a very scrappy, very disorganised system of agricultural education, that we have the most poorly educated farming community in the whole of western Europe, is nobody's fault but our own. Least of all it it the fault of the agricultural community; it is the fault of our tradition and our values and our attitudes to agriculture, and it is a matter for politicians and political leaders to change those values and to create the conditions which will promote different values. My father used to talk to me at great length about the whole idea of leaving the fellow who would not be good at school at home to do the farming, and this has been the ruination of huge areas of Irish agriculture. Again, it is a matter for politicians and for political leadership to change that.

Central to the whole idea of a thriving agricultural industry must be the re-structuring of the ownership of agricultural land. Forty-five per cent of Irish agricultural land is owned by people who are 55 years or older, most of whom are unmarried and none of whom has any great incentive to produce at the higher levels of productivity that will be needed if we are to reach European productivity levels. Note that I am assuming the Minister is successful in his herculean efforts to prevent the super levy being imposed on Irish agriculture. He has my full support, for all the difference that will make. Nevertheless, for what it is worth he has my support.

The re-structuring of the ownership of land is fundamental to the success of agriculture in this country. I do not, do not wish to and never will advocate nationalisation of land or State farming. I do not believe it is necessary. I do not believe it is the most efficient way and I do not believe it is in any way creative to suggest it. We have to create a combination of incentives, inducements and pressures that will transfer that 45 per cent of our under-utilised, inadequately farmed, inadequately maintained land from those who will not work it to those who will. It has been one of the great shames of Irish politics that our two major conservative parties, who are so busily competing with each other to retain the image of conservative agriculture, have been intimidated from really facing up to that problem. They will not talk about it. They pretend, they will circumnavigate it, they will run around it. But the facts are that those who are in occupancy of that land will not farm it and there are many who would like to farm it who cannot get their hands on land. That is a central problem, and there will be no real development of Irish agriculture for as long as that situation is maintained.

Mr. Deasy

We are drawing up a Bill to deal with that.

Mr. B. Ryan

I know there is a Bill in preparation which is an attempt to deal with that factor. We have to talk again about whether it is really going to tackle it on the scale and to the extent that is necessary. We are talking about close to half of our present agricultural holdings——

Mr. Killilea

That is not so.

Mr. B. Ryan

Senator Killilea and I will have to discuss this elsewhere. I would quote two figures from the Professor of Agriculture in UCC, not the ones that have been most recently quoted. People have abused him but they have never contradicted his facts, which is often the experience of those people who tell the truth. They are abused for what they say but nobody ever contradicts them. One thing he stated is that milk production could be increased by 40 per cent by proper management without any significant increase in input costs. There are many people here who would claim to be far more expert in agriculture than I am. If Professor Rafferty is wrong, will they please tell me? I will accept the fact, if they give me the sources. If he is right, people would do well to explain to me and those like me who are concerned about the future of agriculture why it is that we could produce 40 per cent more milk without any increase in input costs, and we do not. He also stated that with proper management calf mortality could be reduced, without any extra cost but simply by proper management, to the extent that would increase beef exports by about £100 million a year. They are two figures of several that he produced. It is a challenge that I would put to those who claim to be close to the industry to explain why we do not and cannot do it.

Notwithstanding its recent difficulties and recent problems the Sugar Company has been a success. It has been a successful State enterprise which has produced employment and has also created wealth. There are those who accuse the likes of myself who stand firmly on the left of politics of ignoring the necessity to create wealth if we are ever to create justice. Let them note that I welcome both the success of the Sugar Company in creating employment and also its success as a viable manufacturing industry which has until recently managed to fund most of its own investment from its own resources.

I regret that what would otherwise have been an even more successful story has on a number of occasions been hindered by Government interference to protect the private sector. I would refer to the reference of the former general manager, Lieutenant General Costello, to the link-up with Heinz, which he saw as a deliberate attempt by the State and the then Fianna Fáil Government to prevent the Sugar Company entering into competition with major private sector food processors. That was his view on it. People may contradict me on it. It was one of the reasons that precipitated his unfortunate early resignation from the company. The other one was the prevention and vetoing of plans by the company to move into the area of fertiliser blending because of howls of pain from the allegedly much more competitive private sector which obviously did not like the idea of an efficient, effective State organisation competing with them. That is not the way to encourage a State-owned public company to maintain its viability and profitability.

I support the motion. There are overwhelming economic and social arguments for the retention of the Tuam sugar factory. Those who propose this motion — and if there is a vote on it I will support it — have an obligation to address two questions. One is the question of agricultural education, not just training people in agricultural colleges for one year after leaving school but the whole gamut of third level education, research, graduate and post-graduate training. Agriculture is a business. It requires the whole paraphernalia of education and training which other business takes for granted and which agriculture does not have. If there is to be a viable, successful agricultural industry, all major parties will have to face up to this dreadful imbalance in the structure of land ownership which is the basic, fundamental problem of Irish agriculture.

Mr. Ferris

Senator Killilea complained about the motion and the amendment being too broad. I lay that blame on him and his party because they had an opportunity to put down a motion specifically about Tuam sugar factory but they withdrew it and entered this broader motion which deals with the factory and the whole area of agriculture.

Mr. Killilea

The factory in particular.

Mr. Ferris

It allowed the kind of amendment that was lodged to it. It gave the Minister an opportunity to deal with the very broad area of the total agricultural scene. I listened with interest to what the Minister had to say about the Sugar Company as a whole and the attitude of the Cabinet in their consideration of Tuam specifically. In his address the Minister said that in Europe it is unheard of to travel long distances with beet from various parts of the country to where the factories are located. When he is making a decision on the Tuam sugar factory he will consider this. It would be totally unacceptable if a very large area west of the Shannon were without a processing industry for the beet grown in that area. That is a valid point if one is talking about rationalisation. From the producer's point of view, the closer the producer is to the actual processing industry, the better it is.

There is a sugar factory in my own county in Thurles and I believe there should be regionalised capital investment in the sugar industry. It should not be designated to one particular area. We must look at the total social consequences of losing a factory in any part of the country. The Minister in dealing with the sugar industry has pointed to the anomalies. There is an obvious need to look at how best we can produce our raw material and have it processed as close as possible to the producer.

The Minister also mentioned how important sugar is in the EEC context. Receipts from levies on sugar quotas amount to about one-seventh of the total funding of CAP. Sugar in the European context is a very important commodity. There is now a surplus problem, not alone in milk but sugar. It is a challenge to the Irish industry to ensure that we are as efficient as possible in the production of sugar so that we can compete with the possibility of imports of sugar from other European countries, which at present is unheard of. We would be in the same position as in the case of other vegetables imported which could and should be produced and processed here. A company given the statutory responsibility for looking after the industry must meet that challenge. If the motion or the amendment or Cabinet discussions take these into consideration, this debate will have been a useful one.

We must look at the overall agricultural problems facing us and the fact that agriculture is of such importance to the Exchequer and to the country. The number of people employed in agriculture, although falling directly at farm level, together with those employed indirectly by agriculture, whether in processing or in the service industry, accounts for almost 40 per cent of the total workforce. It is very important that agriculture should be treated in a very important way by any Government.

The previous Government set up a committee which made an interim report to the then Minister, Deputy Lehihan, looking for budgetary action. As a member of that commitee, I was very disappointed when the Minister ignored the interim report and was inactive in regard to many of the recommendations which were of vital necessity then, and some of them still are now.

Admittedly this Government have met some of these challenges. They increased the compensation in the disease eradication programme by about £3 million in the last budget. They have also ensured that the Youth Employment Scheme money is available through the Youth Employment Agency specifically to help to train young farmers to make them more efficient in the production of agriculture.

The four-year plan which is just finished and will shortly be on the Minister's desk will point to the fact that farmers can do quite a lot without State assistance. Senator Ryan referred to some of these points and I will not repeat them. Much is possible within the farm gate itself. The Government have a major responsibility and the provision of over £300 million in the last budget is a contribution towards that.

Our sustenance since we joined the EEC remains with the Common Agricultural Policy which is under threat at the moment. We had a lot of agreement at political level and at farm organisation level about how we should approach the problem. I was impressed by the Minister's admission when leaving to address his colleagues in Athens that he was naturally nervous and apprehensive because there were nine member states against what he was trying to do. Before he arrived in Athens a spokesman from the Opposition tried to pull the carpet from under him, looking for resignations. There may be political points to be made but in the national interest when a Minister is fighting for our survival he needs the support of all parties in this House, whether the Labour Party, the Fianna Fáil Party, Independents or the farming organisations.

The Minister proved during those deliberations that he was capable of fighting a battle, which has been recorded in many documents. In the October edition of the Community report the Minister is reported as having accused the Commission of breaching the Treaty through failing to protect Community farmers from competitive goods produced elsewhere in the world. The President of the Commission, Mr. Thorn, was reported as being offended by that charge. Anyone who can accuse the Minister of not having sufficient courage is not living with the reality that he has proved to the rest of Europe that Ireland has a very special role within the Community. Agriculture, as our main industry, is so important to us that if the principle of the super levy in any form were accepted by us we would be literally re-writing the Treaty of Rome and the principle of CAP which states that the common prices achieved by common organisation of the market would have access to all member states, that Community preference would be achieved among member states behind the tariff wall of protection against others. Common financing involving the sharing of the cost of this policy on a Community basis is a fundamental principle of CAP. The super levy re-writes the whole of those principles. I do not accept that the Minister will settle for that. In his contribution today he reiterated what the Taoiseach said on this subject. My party Leader is on record as stating our party line on this, not alone here but with our colleagues in Europe where they have quite a lot of political clout within the Community. The importance of CAP to agriculture can be judged from the total income over the past ten years from FEOGA which represented a transfer of £2,500 million in the ten years up to 1983. The receipts for last year alone under these headings amounted to £400 million. If CAP is to benefit anybody, obviously it must benefit Irish agriculture. It was one of the reasons why our farmers and the vast majority of the people agreed to go into the Community, not for political unity but for the economics that the European Community have brought to our farmers and to the farming structure.

More emphasis will have to be placed in the future on the restructuring of our farms and the restructuring of disadvantaged areas which will benefit under other headings from Europe apart from CAP. We should not be fobbed off by agreements to increase the regional or the social funds if it is to be done at the expense of the principles of CAP. Anything the Minister has done in this regard to date confirms that we have an ally when he is fighting, whether in Athens or in Brussels. I am glad that he got his priorities right today, that he is with us to discuss this very important motion and that he was not, as he said, junketing in Germany, although the promotion of Irish products in Germany is also very important. However, we have a good delegation there from the industry and I have no doubt that they will do their job in their own inimitable style.

It would be inappropriate in a discussion on Irish agriculture and its developments if I did not put on the record of this House our appreciation of the work that has been done by An Foras Talúntais, who yesterday celebrated their 25th anniversary. They have made a major contribution to agriculture through ACOT. With the acceptance by the Government of the staff agreement plan for the workers in ACOT, they can now get down to the job, that is out on the field advising farmers, particularly those who want to specialise in areas of production, whether it is beet, cattle or dairying. The Director of ACOT is committed to this challenge and with a revitalisation of that programme farmers can themselves do a lot. They must be assisted by the State. We should not get into the game of national aids, because we can never compete with our European neighbours in that area. If we can ensure that the fundamental principles of CAP are maintained by the Minister and his team in Europe, there is no doubt that Irish farming will continue to prosper as it has in the past, although in the last three or four years farm incomes have dropped some 40 per cent. In that period my colleagues on the other side of the House were in office. I cannot say that they share all of the blame. The weather was to blame. If the weather improves we will no doubt take the credit for it.

An Leas-Chathaoirleach

If it does not we will take the stick.

Mr. Ferris

No. I hope there will be many a long summer before you will have the chance to do that.

An Leas-Chathaoirleach

Wait until the budget.

Mr. Ferris

I hope that when the budget comes agriculture will get its fair share of the national cake. No matter how small the national cake is it must be distributed fairly, and agriculture has as good a case as any to make because of the employment that it involves both directly and indirectly in the processing and service industries. I congratulate the Minister on what he has been trying to do. I know he will succeed, we appreciate his efforts and there will be political unity about the situation when he has completed the job.

Mr. M. O'Toole

I welcome the Minister to the House and congratulate him for not sending the buachaill on this occasion. The Minister is well aware of the criticism for not being at Anuga International, the greatest agricultural fair held annually and at which we should have been represented. We have two Ministers of State at the Department of Agriculture and one of them should be out there.

I see a very appropriate heading — in the Evening Press—“£50 million loss of sales threat to Sugar Company” to an article written in Cologne by Stephen O'Byrnes. I am not going into details as I have too much to say, but it is a red herring. The Tuam sugar factory means more to Connacht and the west than the super levy means to the nation and that should be borne in mind by the Minister. This factory has had its problems down the years. Since the first red light was flashed the people at Tuam and surrounding districts, both in my own county and in other counties, have been making an effort to increase the acreage grown in that catchment area. In 1981 2,500 acres were grown in that catchment area and it went to 3,600 in 1982. In 1983 we had a total of 4,500 acres. I have a fairly accurate account from the procurement committee that that would have reached 10,000 plus the 3,500 from County Offaly coming into Tuam if they had got a free hand.

An acre of beet at 16 tonne per acre at £30 a tonne realises £480 per acre and 4,500 tonnes would mean something in the region of £2.6 million to the catchment area of Tuam for growing alone. We have also subsidiaries of the Tuam company: the turf cutting operation is worth in the region of £1.750 million which gives employment in that region to 6,000 workers. That is a very sizeable number of people employed in the turf cutting subsidiary of Tuam. We have also the haulage and harvesting of beet. The 1.5 ratio for one worker in the field would create five jobs in the industrial and processing of that product. There is also the question of a subsidy of £32 per acre and a freight subsidy of £2.50 per tonne which brings up the amount of earnings to that region, plus the by-products of about £1.5 million. A factor that will never be assessed in Civil Service departments is the after crop product that comes as a result of the growing of an acre of beet. An acre of beet tops realises something in the region of £45 to £50 per acre in that region, the equivalent of one acre of swede turnips. That is a sizeable figure and I defy contradiction of these figures regarding the after crop.

Tuam factory employs 200 temporary workers during the harvesting and hauling and the beet campaign period. They are earning in the region of £250 a week, which is a very sizeable figure to a small farmer in that region. There is a total of 230 employed in the factory, with roughly 50 in the engineering section. A decision from the Government is urgently needed because this is the time for planning for 1984. The farmers of that region are now deciding on what plan or programme they have for agriculture and for the growing of beet in 1984. Now is the time when people make contracts for conacre, and land is signed up at this time. There is also the preparation of land by early ploughing so that the frost will get a chance of breaking down the soil and having a good bed in the early spring for seeding. There is an anti-western bias towards the western counties from Coalition Governments, not alone at present but in the past. We have plenty of evidence of that.

Mr. Deasy

That is not true.

Mr. M. O'Toole

I could give the Minister the facts. In the previous Coalition Government, from Donegal to Cork, how many Minister or Ministers of State did the Government nominate for that particular region?

Mr. Deasy

I have gone to great lengths to try to be helpful in this matter. I am very aware of the possible social and employment consequences in the Tuam general area.

Mr. M. O'Toole

Do not blame me.

Mr. Deasy

It is unhelpful to introduce that element into the debate. We are doing our best to get a proper decision in this matter.

Mr. M. O'Toole

Industrial relations in Tuam are unique. There are 93 redundancies already in that plant. That is a fairly sizeable redundancy, and the Minister spoke about the overall redundancy in the sugar company over a period of time. The mention of £12,000 to retain a man working in Tuam must be either a misprint or a clerical or typing error. I do not believe that it takes £12,000 and I should like more facts and figures. Tuam is not going to close while we are in the west. I appeal, as Senator Mark Killilea appealed, to the Senators and Deputies for the west to fight tooth and nail to ensure that this factory is kept viable. The sugar industry may not be too healthy, but I do not think they should focus their attention on a factory in Tuam that has a social aspect, an employment content and which is very necessary. If you close Tuam you might as well put four or five gates around it because that will be the end of it. This is the hub of all the activity. It is there to generate employment, its status will be lowered and employment around that area will be damaged right into County Mayo.

The farm modernisation scheme which was discontinued is a great loss to the west. I hear it is going to be reintroduced, in what form I do not know. I do not know what the impact of the super levy will be. I am totally against the two year period. The Minister will probably be issuing statements on this. If the sheep subsidies, cattle headage grants and the in-calf heifer grants are going to be discontinued then you can put gates on the Shannon because that will be the end of the west. They are only surviving at present with barley at £200 a tonne. They are going into the winter trying to produce a store animal in the west because they are unable to raise beef on that terrain.

There is also termination of group fodder grants, and in Mayo we had 1,942 grants for group fodder schemes terminated. That is a big loss to Mayo. I do not know what the national figure is. The mobile machinery grant has been discontinued. Grants for keeping farm accounts have been discontinued. The guidance premiums have been discontinued. There has been no appointment of either temporary instructors or otherwise. The client board service that has now been introduced is the greatest farce ever. An instructor from the client board service from now on will only be allowed to have 120 farmers on his list. I can assure you that the agricultural instructor will go for the 120 good farmers in his area, with the result that the other type of farmer will not be able to get any advice whatsoever. He may go into the local town whenever there is some type of seminar held and that is the only advice he will get.

I do not know if the Minister is aware that there is a shift of all the temporary instructors in the west to the east. There has been a reduction from 35 instructors to 28. That is right across the board in Sligo, Galway and other counties. Only applications for 1981 are now being considered in my county in the farm development services. That is the state of agriculture in the west and I am delighted the Minister is here to look after it.

Senator Ryan said that the reason for the state of agriculture is because the worst educated people were kept at home on the land. There was a very able farmer in my area who had three sons going to the secondary school in Westport. He said to the headmaster, "Tell me the truth, have they any brains at all"? "Of course they have", he said, "You have three brilliant students coming here to Westport". The father said, "If I thought they had no brains, I would send them on to the university and I would keep the good lads at home".

Mr. Burke

I welcome the opportunity to speak on this motion and the amendment to the motion. Coming from the constituency in which Tuam is situated, I should like to say that there are two sides to the problem of Tuam. One is the realistic side and the other is, by and large, the hypocritical side that we often see displayed, re-emerging time and time again. This motion is premature and repetitive in so far as last June we were here debating the very same topic. I agree with Senator Ferris in that I query why the original motion was withdrawn and substituted by a watered-down motion.

The community, the workers and the farming community of Tuam have shown that there is genuine concern about the future of Tuam. This Government have shown real concern with regard to Tuam and the Sugar Company. There are people who say that they have not, as we have heard here this evening. The very fact that the Minister came down last summer and briefed himself first hand on the whole situation was most welcome and beneficial, not only in regard to his recommendations, which we await, but also to the people involved because they were not aware that there was concern; they were misled and told otherwise. They have now seen for themsleves that this Government are concerned about the retention of Tuam as a viable part of the Sugar Company's operation. Many figures have been tossed about this evening; it has been said that the Sugar Company lost £22 million last year. I should like to say to the Minister that Tuam's portion of that loss, as he is already aware, was very small. I should like to say also that when the Minister read out the list of areas of production throughout the country, we in Galway and the catchment area of Tuam, have a record of achievement which compares favourably with other enterprises in the west; the acreage for sugar beet has increased in spite of very difficult circumstances. Great credit is due not only to the farming community but to the people in the Sugar Company who have done their utmost to expand the acreage in Tuam. These are all positive steps taken by the Tuam community themselves to make sure that the processing of sugar in Tuam will be continued.

It is unfortunate that I have to mention the hypocrisy shown here this evening. I cannot let the opportunity pass without mentioning four points which will illustrate to all that there is hypocrisy here which re-emerges at various times. Earlier in the debate Senator Killilea mentioned 14 July 1982 when the then Taoiseach came to Tuam and said that he was allocating £30 million to Cómhlucht Siúicre Éireann for the expansion and retention of Tuam.

Mr. Killilea

I did not say that.

Mr. Burke

The Senator quoted from the Taoiseach's speech in Tuam. I was in Tuam on that day. Not one penny of that has been spent in Tuam to modernise it and that was under the last Government who said they had a commitment to retain Tuam at all costs. That was Fianna Fáil policy.

I should like to draw the attention of the House tonight to a statement made in the debate in the other House last June when one Fianna Fáil TD from another part of the country was reported in The Irish Press as having said that Deputy Hugh Byrne supported the Government's decision to close the Tuam sugar factory. He is still within the ranks of Fianna Fáil. Therefore, there is hypocrisy which must be shown up for what it is worth.

An Leas-Chathaoirleach

You cannot mention a Member of the other House in this Chamber.

Mr. Killilea

Particularly when he left out Deputy Oliver J. Flanagan.

Mr. Burke

Members of the other party made those statements and they are on record in various places. Since 1974 the only Government that put money into Tuam by way of modernising it to stop the running-down of that factory was a former Coalition Government when the then Deputy Mark Clinton, as Minister for Agriculture, allocated £1.5 million for the modernisation of that plant. Not one penny has been spent on its maintenance, and it is only due to the workers in Tuam who have handled it under very difficult conditions that Tuam has remained a viable factory in the production of sugar. Credit is due to the workers and the people involved in working outmoded machines. When the Minister visited it on the last occasion he could not believe the condition of the plant, although he had heard many of the rumours beforehand. On that occasion he complimented the people who maintained it in such condition over the years.

When the Government's recommendation comes forward, I should like to remind them that they will have considered the various people involved in this problem. Tuam has been the backbone of the population of that region. It has a tradition there. Before a decision is taken, great consideration has to be given to those social and economic policies also — you cannot divorce one from the other. There is a commitment within the work force to make sure that the production costs there are equal to all other operations of the Sugar Company. Maybe they have been surpassed under the condition in which they now find themselves and there will be a far greater commitment there for the future when the commitment to Tuam is given. When that is given the Tuam plant and the people operating it will show that the decision taken to maintain it in Tuam will be the right one.

We had to wait to hear Senator O'Toole for the last straw and the publicity gimmick that has gone on about Tuam. It is unfortunate that down the years it has been dragged on to all political platforms, on all election occasions, but here tonight we had it used again as a yardstick for withdrawal from the west. Here again we had the anti-western bias that Senator O'Toole referred to. These are cliches that are now well worn, and I could not resist the opportunity to highlight them again, and the hypocritical way in which they are used. That always has been the tradition within Fianna Fáil on that aspect. When we say that farm advisers are leaving the west and going to eastern areas and that we will soon have none, I believe that we have a commitment to ACOT and that ACOT have got a commitment and that there is no such desertion of the west. Many of the advisers within the ACOT system in the west find it a challenge and enjoy the challenge to work in the western part of Ireland. Having been to the other areas they can improve agriculture in the west. If Senator O'Toole cares to do a small piece of research he will find that many of the ACOT officers in the west had been in operation in other parts of the country before they came to the west. It is a very important point that when such advisers come to the west they will improve agriculture. So Fianna Fáil should not be running down the whole service of agriculture and the commitment of this Government to it.

Before I finish I must mention that we will honour the commitment to the west. When the western package was being operated during the previous Fianna Fáil Government not one penny was spent, though we had at that time a Minister of State for Agriculture in the west, and he is not too far away from Senator O'Toole. When we say that there has been no commitment by this Government to agriculture we can see that we have retained the lime subsidy, the calf premium, and despite Senator Killilea's best efforts in the local press last week to show that we were not paying the disadvantaged areas premiums he will be glad to know now that last Friday £8.5 million was sent out on that scheme. The Senator was making one more effort to demoralise the farming community there by saying that this Government have no commitment to agriculture.

I will finish by saying that I believe, and the majority of the farming community believe, that no Government ever have shown such a commitment to maintain agriculture as our Taoiseach, our Ministers for Agriculture, Foreign Affairs and Finance have done in recent months in their efforts to fight off the largest powers within the EEC. They have gone no small part of the way to achieve that. When we have the final results from the EEC with regard to the milk super levy this Government's work will be shown up for what it is. This Government, without the headlines or anything else, will go about their business in a positive way and not in the destructive and propaganda way we have been accustomed to in the past. We will go on from here and this Government's commitment to agriculture will be seen in the months and years ahead.

Mr. Killilea;

Did the Senators hear about the two agricultural instructors appointed for Donnybrook?

Mr. Ellis

When I saw the amendment, I noticed the absence of the names of the western Senators, namely, Burke and Connor. It is obvious that they do not support the efforts that are being made by their own Government. We could name them on a long list. There are Senator Higgins, Connor, Durcan — Senator Higgins of the Labour Party, the great socialist who has been so worried and has always expressed his worries about the west — and Senator Loughrey. The Cathaoirleach is exempt because of his honoured position.

Mr. Connor

We do not engage in cant or hypocrisy.

Mr. Ellis

If Senator Connor, or O'Connor as he was previously known in Roscommon before he decided to bring himself a little bit up the ballot paper, would please allow me to continue without interruption, I noticed also on this motion that the Minister came in and took up the time of this House for approximately 45 minutes to read a ten-page speech, which means that he averaged 4½ minutes per page of his speech. In doing so the Minister was cutting short the time that Members of this House would have had to express their grievances.

We all know that the Tuam sugar factory is about to be axed by the Coalition Government. When I say "being axed" I am being kind to the Minister for Agriculture and the Minister for Finance. With regard to Tuam, the Minister has not put to this House the facts and figures as they should be presented. He presented a conglomerate of figures and as Senator O'Toole pointed out, the Minister said each job in Tuam costs £12,000 a year. I wonder who was to blame for that. If that is the case, the people to blame are the sugar company because they failed to reinvest in Tuam over the years, the net result being that Tuam is being run down to the detriment of the west. I am asking the Government and the Ministers for Agriculture and Finance to give the necessary capital injection to Tuam to allow it to continue as one of the prime agricultural employers in the west.

Moving on to the second part of the motion and to the deplorable state that agriculture has been allowed to decline to in this country in the past six months, we have a Minister for Agriculture who is outstanding in his own field, and outstanding particularly in the way he has cried and bemoaned the fact that he is not able to handle his counterparts in Europe mainly because he is not aware of everyday happenings in farming. We have seen this Government suspend the Farm Modernisation Scheme, the net result being that progressive farmers are now being handicapped due to this Government's lack of commitment to put in the necessary finance to allow them to develop.

We could go on and on. We were promised on at least two occasions that we would have the restoration of the Farm Modernisation Scheme under a new guise and new guidelines. I am requesting the Minister of State to ask the Minister to put before the people now his plans for agriculture for the next four years. As far as I can see he has no plans except to roll from one crisis to another and to go to Europe and to cry and bemoan the situation and to state that Irish farmers are in need of special treatment. We all know that, but what is he doing on the home front or what are this Government doing to put the necessary cash injection into agriculture which it needs if it is to be competitive among its European colleagues? European farmers at present have got advantages over their Irish counterparts, not alone in the terms of availability of capital to them but also with regard to their marketing strategies. We know what has been done about marketing by this Government. Today the Minister explained why he could not be in two places at one time. If the Minister could not be in Cologne at the big European food fair that takes place during the year, at least one of his Ministers of State should have been there. No excuse will be accepted by the Irish food industry for the fact that nobody went to represent us there.

In regard to drainage schemes, Senator O'Toole pointed out that it is 1981 applications that are being processed. That is a fact. What also annoys me is that the rate of grants which farmers are receiving in the west under this scheme are now down to a mid-30 percentage though it was originally planned to be 70, mainly due to the fact that the Government are not prepared to put in the necessary cash injection or make the necessary adjustment in costings to allow drainage grants to be upgraded.

We had another red herring from the Coalition which was dragged around the country by the Minister of State, Deputy Connaughton, with regard to land leasing and land policy. He used this to gain publicity, but has he gone back and studied what he was putting before the people? The policies that he is propounding are totally unworkable and unacceptable to Irish farmers, especially to the ageing farmers. Down through the years too much time was spent fighting for the rights to land. Now we see policies being introduced which are unworkable. With present returns from farming how can one farm support two people? What magic wand has Deputy Connaughton? Farming is in such a state and the future is so uncertain that many farmers, among them the most productive, are winding down their operations. This is evident in dairying, livestock and other sectors.

It is only fair that I should refer to the infamous super levy. As far as I can see the Minister is going to try to get a two-year derogation for Ireland on it. If he succeeds, what is he going to get to help Irish farmers in those two years to build up and to be able to compete with the factory farms of Denmark and Holland as far as milk production is concerned? Is he going to give the necessary cash injection to the dairy sector to allow them to compete? Is he going to find that in two years' time he will have Irish farmers, epecially the small farmers, the small producers of milk, being crippled by the super levy when it will be imposed here?

I would say to the Minister, and it may not appeal to some people in this House, that he should look to the future as far as the dairy sector is concerned. If the need arises he should consider a tiered system as far as the super levy is concerned whereby the first 50,000 gallons of milk produced would be exempt from any levies which might come in the future. I believe that 50,000 gallons production is sufficient to sustain any family farm unit. That should be our basic belief.

News of the talks which have taken place recently about the EEC subsidies for sheep and cattle headage payments is very worrying. If the Minister is not careful he will allow himself to be put into a position that in order to get the derogation for two years he will be forced to allow these payments to be withdrawn. I hope that the Minister will not allow himself to be put into that situation and that he will approach the negotiations with his European partners for special treatment for Irish farmers until such time as they are in a position to compete with their European counterparts.

I regret, as I said earlier, that the time left for Senators to speak on this motion has been so short. We are now discussing the only industry which can take this country up by the bootlaces and bring it back to its rightful place as an economic unit in Europe. Therefore, I would say to the Minister that the future of this country lies in his hands and he will be judged on his stewardship by the farmers and especially those in the west whenever the opportunity may arise. It appears that at the rate the ship is sinking it will not be long until the people will get an opportunity to elect a Government capable of governing the country and of putting the necessary input into the various Departments to allow the country to develop.

Mr. T. Hussey

I thank the Senators who have spoken on this motion. The putting down of this motion was a very worthwhile exercise. I want also to thank the Minister and the Minister of State, Deputy Hegarty, who has come here to listen to the various points made. I compliment the Tuam Chamber of Commerce, the members of which have travelled here to show their interest in this motion and their solidarity with and support for the people who put down this motion.

Listening to the various speakers there seemed to be unanimity as far as the first part of the motion goes. I did not hear any speaker either from the Fianna Fáil side of the House or the Government side speak against the retention of the sugar factory at Tuam. For that reason I hope that when the division bells sound later this evening all those people, and particularly Senators from the west, will vote solidly for the retention of that factory. If they vote otherwise they will be highlighting and showing to the whole country where the hypocrisy lies in relation to this issue.

Many points were made during the debate and I will try as briefly as possible to reply to some of them in the few minutes that remain to me. The Minister in his speech said that it is costing £3 million per year to produce sugar at Tuam. I dispute this figure. He also said this represents about £12,000 per annum for each full-time job equivalent in the factory, that this is what the taxpayer will have to provide to keep Tuam open. They are the Minister's figures. I dispute them because I do not think they are correct.

In giving those figures of what it costs to retain the factory at Tuam, with 200 full-time jobs in Tuam and about the same number of seasonal jobs, the Minister should also have given the other side of the story. That is what I propose to do now so that the Minister, when he joins his Cabinet colleagues to make a final decision on this issue, will have before him both sides of the story, that he will have the factual situation in relation to Tuam and that he will be able to convince his colleagues in the Cabinet that the case is so impelling for the retention of this factory in Tuam that the Cabinet will have no option but to support our motion and plea for the retention of the factory. I will give the figures which have been prepared by the workers' action committee in Tuam and which have been verified by the Sugar Company themselves.

The value to local and national economy of the Tuam sugar factory: primary value, the value of the beet crop to Tuam growers, £4.600 million; value of wages paid after PAYE and PRSI deductions, £2.105 million; tax paid to State, £1.160 million; animal feeds, value of pulp products produced, £1.550 million; value of beet tops as feeding £200,000; turf cutting operations; referred to by Senator O'Toole, 75,000 tonnes of turf cut each year at £30 per ton £2.250 million; primary total value, £11.865 million; goods and services bought in Tuam town and district, £187,000, and in the rest of County Galway, £580,000; goods and services bought in the rest of Ireland, £1.535 million; payments to CIE and the Beet Haulage Association, £529,000; payments for fertilisers, £630,000; secondary value total, £3.461 million. Added to that are the losses to the Exchequer in the event of CSET Tuam closure, PRSI, PAYE paid in the year ending April 1983, £1,036,570; VAT lost to Exchequer paid year ending September 1982, non-claimable items, £98,000; unemployment benefits and PRSI payments, £1.113. The total lost to the Exchequer in the event of the closure of the Tuam factory under those headings would be £2,247,570.

They are the figures the Minister should analyse and balance. When he comes up with a figure of £3 million as a loss for the Tuam operation he has also a right to allow for the other figures. I have given them so that he can study them and be able to convince his Cabinet colleagues that if the case is so convincing for the retention of this factory they will have to give that decision.

I am sorry that that decision is not being given now because I was hoping that this debate was giving an excellent opportunity to the Minister to announce his decision here. Sufficient time has been spent considering various reports. The reports have gone from one Department to the other over the past couple of years. They have been discussed and analysed. Anything that is to be known in relation to the Tuam factory is now known to the Cabinet. I am sorry that they have to allow the despair, the gloom and the despondency in the Tuam factory at present to continue indefinitely.

The Minister said that it would possibly be another month before a final decision would be given. It is disgraceful that workers who are so committed to the retention of that factory and the farmers who have committed themselves this year to grow 10,000 acres of beet if they had got the contracts for them, should be denied the right to know whether their jobs will be there next year or whether their contracts will be there next year.

For that reason the Minister should have given us his decision here this evening. It is no excuse to say that the Government have been involved in preparing Estimates for the Departments or for the budget. We know that that is a seasonal thing. This situation in Tuam has been going on since 1981 or earlier. It is definitely going on since 1981 when the Coalition Government gave their decision to retain the factory for a further year. If they have not made up their mind now after all this time, I do not know what kind of reports they want; I do not know what has to be done in order to get a decision, but as far as the public representatives in the west are concerned, as far as the voluntary bodies in the west of Ireland are concerned, the leaders of the Church and everybody who has any voice in the affairs of the western region, all have expressed their opinion and have called for the retention of the factory. I hope that call will not fall on deaf ears.

The workers have made an excellent case. They have pruned their operations there as far as possible. They have accepted voluntary retirement. They have increased their productivity. They have done everything that is open to them to do in order to encourage the Government to retain the factory there, and it is now up to the Government to give their decision. If that decision has to wait I plead with the Minister to please give us that decision and let us work on it, but do not keep the thing going indefinitely as it has been going since 1983.

I am sorry that Senator Burke should try to engender any kind of bitterness into this debate. That would not be my idea, and I do not think it was anybody's idea on this side of the House. We wanted to discuss this motion in a cool and clam way. Statements made by the Fianna Fáil Leader and the commitments given by him towards the Tuam sugar factory were referred to. Those commitments are well known: we spelled them out on every platform in Tuam and in East Galway. We said quite clearly, and we got the backing of our parliamentary party and our leader, that we would retain that factory in Tuam. At the last general election we said that if the Coalition Government were prepared to close it we would re-open it on our return to office. That commitment still stands. That is the situation as far as Fianna Fáil are concerned, and I want to state that clearly here tonight and to have it in the records of this House.

I say to the Senators particularly from the west of Ireland, it is our fight today for Tuam, it is vital to us in Tuam, it is vital to the western region. It may be their fight tomorrow in some other situation. We have the Ballyforan situation staring us in the face, which is another postponement. I am not going to dwell on that. I hope that commonsense will prevail at the end of the day and that the Government will not continue to prune those industries that are getting their raw materials from the land, from the bogs and so on; that they will encourage and promote them.

How can foreign industrialists be encouraged to come to this country? How can the Minister go to Japan, America or England and try to encourage industrialists to come in here and set up industries if we cannot support our native industry? That is why the Irish Sugar Company, Bord na Móna and the other industries should be supported, promoted and developed. They should be expanded in order to give some relief and some ray of hope to our thousands of young people who are tramping the roads doing interviews and trying to get jobs that are not there, and in many cases are gone before they go for interview. That is the situation, and it is well known to all of us who have any interest in the future of the country or who have any interest in the youth of the country.

Senator Hourigan said that the lack of confidence started in 1979. Perhaps that is so. There was a certain lack of confidence at that time, but the difference is that in 1979 and 1980, when agriculture was on the downward trend, Fianna Fáil did something about it, and they tried to restore confidence by injecting money through the Farm Modernisation Scheme and by introducing other schemes such as the silage scheme for first time makers of silage, by increasing headage payment grants and so on. That is the difference between that Government and the present Government.

Instead of putting money into the agricultural sector the Government decided to cancel grants under the Farm Modernisation Scheme. They decided to wind up the Irish Land Commission. They decided to reduce the headage grants for many of our part-time farmers. Those people are often the leaders in their own areas because they have the earnings to plough back into the land. They give a headline to the rest of the community. Now they are being deprived of those grants because the earning ceiling is being increased to £5,100 from £3,500 for qualification.

These are a few of the things that have gone wrong since the present Government took over. I cannot see why the members of the Government can support this amendment. I would appeal to them to consider their position. As far as agriculture is concerned there is no development at present, there is no expansion, and unless some leadership is given by the Government lack of confidence will remain for some time. That is a sad situation for this country because we are depending so much on our agriculture. It is our main industry, and while agriculture is thriving the rest of the economy is on the up and everybody is doing well. That has been the situation down through the years. But that is not the situation today.

Question put: "That the amendment be made."

The Seanad divided: Tá, 30; Níl, 18.

Tá

• Belton, Luke.
• Browne, John.
• Bulbulia, Katharine.
• Burke, Ulick.
• Connor, John.
• FitzGerald, Alexis J.G.
• Fleming, Brian.
• Harte, John.
• Higgins, Jim.
• Hourigan, Richard V.
• Howard, Michael.
• Howlin, Brendan.
• Kelleher, Peter.
• Lennon, Joseph.
• Loughrey, Joachim.
• McAuliffe-Ennis, Helena.
• Cregan, Denis (Dino).
• Deenihan, Jimmy.
• Dooge, James C. I.
• Durcan, Patrick.
• Ferris, Michael.
• McDonald, Charlie.
• McGonagle, Stephen.
• McMahon, Larry.
• Magner, Pat.
• O'Brien, Andy.
• O'Leary Seán.
• O'Mahony, Flor.
• Quealy, Michael A.
• Robinson, Mary T.W.

Níl

• Cassidy, Donie.
• de Brún, Séamus.
• Ellis, John.
• Fallon, Seán.
• Fitzsimons, Jack.
• Hanafin, Des.
• Hillery, Brian.
• Honan, Tras.
• Hussey, Thomas.
• Kiely, Rory.
• Killilea, Mark.
• Lanigan, Mick.
• Lynch, Michael.
• Mullooly, Brian.
• O'Toole, Martin J.
• Ryan, Brendan.
• Ryan, William.
• Smith, Michael.

Tellers: Tá, Senators Belton and Harte; Níl, Senators de Brún and W. Ryan.

Amendment declared carried.

Motion, as amended, put.

The Seanad divided: Tá, 29; Níl, 18.

Tá

• Belton, Luke.
• Browne, John.
• Bulbulia, Katharine.
• Burke, Ulick.
• Connor, John.
• Cregan, Denis (Dino).
• Deenihan, Jimmy.
• Dooge, James C.I.
• Durcan, Patrick.
• Ferris, Michael.
• FitzGerald, Alexis J.G.
• Fleming, Brian.
• Harte, John.
• Higgins, Jim.
• Hourigan, Richard V.
• Howard, Michael.
• Howlin, Brendan.
• Kelleher, Peter.
• Lennon, Joseph.
• Loughrey, Joachim.
• McAuliffe-Ennis, Helena.
• McDonald, Charlie.
• McGonagle, Stephen.
• McMahon, Larry.
• Magner, Pat.
• O'Brien, Andy.
• O'Leary, Seán.
• O'Mahony, Flor.
• Quealy, Michael A.

Níl

• Cassidy, Donie.
• de Brún, Séamus.
• Ellis, John.
• Fallon, Seán.
• Fitzsimons, Jack.
• Hanafin, Des.
• Hillery, Brian.
• Honan, Tras.
• Hussey, Thomas.
• Kiely, Rory.
• Killilea, Mark.
• Lanigan, Mick.
• Lynch, Michael.
• Mullooly, Brian.
• O'Toole, Martin J.
• Ryan, Brendan.
• Ryan, William.
• Smith, Michael.

Tellers: Tá, Senators Belton and Harte; Níl, Senators de Brún and W. Ryan.

Question declared carried.