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.