Special Committee Pigs and Bacon Bill, 1934 díospóireacht -
Thursday, 11 Apr 1935

SECTION 101.

Minister for Agriculture

I beg to move amendment No. 91:—

Before Section 101 to insert a new section as follows:—

101.—The Board may whenever and so often as they think it proper so to do, by order (in this Part of this Act referred to as a home-sales order)—

(a) appoint a specified period to be a sale period for the purposes of such order, and

(b) appoint a specified quantity of bacon to be the sales quota in respect of such period.

The existing section in the Bill makes it mandatory on the Board to fix a home-sales period and quota. This amendment leaves it optional. When they are making an under-production order or an over-production order, it is not so necessary to regulate home-sales.

Deputy Dillon

On a previous amendment you determined you would abandon the principle of publishing such orders in Iris Oifigiúil. Consistent with your proposed amendment, you have omitted sub-section (4) from the section. Is it proposed to leave Section 101 in the Bill standing ?

Minister for Agriculture

No.

Deputy Dillon

But you have omitted sub-section (4) already, and I suggest that you should reinsert sub-section (4) in the new section.

Minister for Agriculture

We will do that on the Report Stage.

Amendment 91 agreed to.

Chairman

This being an alternative section, it will be necessary to move the deletion of the existing section.

Minister for Agriculture

I move that Section 101 in the Bill be deleted.

Amendment agreed to.

Question proposed: " That Section 102 stand part of the Bill."

Mr. Dillon

On that section, in line 30, it is indicated that the Board, by such home-sales order, shall allot the quota between all licensed premises in such proportions as the Board thinks proper. In every other case where distributions of that class were being made there was a statutory control over the way in which the quota would be divided. Why in this section is the Board given an absolute discretion as to how it will distribute the quota ?

Minister for Agriculture

The production of a factory may be disposed of in two or three ways. Some of it is exported, some goes to cold storage, and some will be sold at home. We have not a definite percentage for each factory, so you cannot put down any definite percentage. There is no rule, but obviously the part of what the factory produces other than what is exported will go on the home market.

Deputy Dillon

The Board might use its discretion under this section in such a way as to force one curer to put an undue proportion of his bacon into cold storage.

Minister for Agriculture

In making a cold storage order, they must take account of home sales. That is as we propose to amend it.

Deputy Dillon

The purpose of the Bill is to control the production of bacon completely. Therefore, it behoves the Board which controls the production to distribute part on the foreign market, part in cold store and part in the home market. There will be no discretion left to any manufacturer of bacon to distribute his bacon except as between putting it in cold store and selling it in the home market. If it is more profitable to put bacon into cold storage and hold it, everyone will be trying to shuffle off his share of the home-sales quota. If, on the other hand, it is not profitable to put it into cold store, and the home market is very good, the home-sales quota will become a very valuable thing. Surely some method ought to be devised whereby individual curers will have a right to claim a share of the quota and not leave it in the hands of the Board to give A.B. a home-sales quota when it is unprofitable or force him to put his bacon into cold store when it is unprofitable ?

Minister for Agriculture

They must distribute the production to cold storage on a percentage basis. It appears to me that it is only the residue that they can put on the home market.

Deputy Dillon

Why not say so ? Why not say that each curer shall be entitled to so much of the home-sales quota as will dispose of his residue ? The residue cannot be greater than the combined export quota and the cold store quota. The cold store quota, plus the home sales quota, plus the export quota, must be so calculated as to dispose of all the bacon in the State. If we have fixed the export quota and the cold store quota, what difficulty can there be about fixing the home-sales quota ?

Minister for Agriculture

It follows a certain line here. It says that the Board shall make a home-sales order and fix a certain proportion for each licensee. It must go on that basis in distributing the home sales quota.

Deputy Dillon

As it appears to me, if I produce 1,000 tons of bacon, the Bacon Marketing Board may allot me 300 tons of that as an export quota and they may order me to put 300 tons in cold store. That leaves me with 400 tons on hands. Am I not entitled to demand from the Board such a share of the home-sales order as will enable me to sell that 400 tons on the home market ? If I cannot claim that and am given, as the Board thinks proper, a home-sales order for 300 tons, what am I to do with the remaining 100 tons ?

Deputy Belton

You will have a surplus production of 100 tons.

Deputy Dillon

As the section stands, a factory in Munster might be allotted an extra home-sales quota by the Bacon Marketing Board, acting as it thinks proper, to the detriment of a curer in Ulster who might be docked of so much bacon as the extra allocation to the Munster factory demanded.

Deputy Belton

But must not the Board allot the total of the production in some shape or form ?

Deputy Dillon

Which is precisely what I want and that is not the case as the Bill stands.

Minister for Agriculture

I am prepared to examine that point. I think there are considerable difficulties. First of all, the Board make a production quota. If they make a proper production quota there is no necessity for a home-sales order, because things will flow smoothly. In case they put the production quota a bit too high, if there is too much produced for the export and the home market to absorb, then they have to correct things. It is only in such cases a home-sales order will be necessary. It is difficult to go on a really exact proportion, because the periods may differ. There may be a production period of four weeks and we might come in with the home-sales order a week before that production period is over. One factory may have produced all its bacon and be closed down. Another factory may have produced only half its quota. There is a great danger that those periods will not correspond, and if they do not, it will be impossible to get things worked out on an exact percentage basis. I am prepared to examine the matter.

Deputy Dillon

You have a total production of bacon which you can fix. Let us say in round figures it is 1,000 tons. You have your foreign quota which utilises, say, 500 tons. That leaves 500 tons which must be disposed of somewhere else. If the Board makes up its mind that the home market is capable of absorbing 300 tons, they will order the curers to put 200 tons into cold storage and they will distribute that cold storage order equitably in accordance with the terms of the Bill. The moment you have that you have reduced the total visible supply of bacon to what the home market will absorb. Why not let the curers absorb that by the ordinary conditions of trade ? What is the necessity of a home-sales order ?

Minister for Agriculture

The curers have tried to organise it amongst themselves.

Deputy Dillon

They have done it for one purpose only, for the purpose of forming a ring in the trade to exploit the home consumer in order to compel everyone living in an area to buy from one factory and everyone in another to buy from another factory.

Minister for Agriculture

To get a better price for their bacon ?

Deputy Dillon

Yes.

Minister for Agriculture

It would be necessary to get a better price, otherwise we cannot get a good price for pigs.

Deputy Dillon

If you reduce the quantity of bacon available for the home market to such an extent as will leave a quantity barely adequate for the consumptive power of the home market, there is no danger of any catastrophic slump in the price of bacon because there is no surplus; but at the same time you maintain a healthy competition and prevent the danger arising that a merchant in Claremorris, say, will be forbidden to get bacon from anybody.

Minister for Agriculture

That does not arise under this measure.

Deputy Dillon

It does not. But it facilitates a case of that kind arising and it has an inherent in it and added difficulty arising out of this home-sales order.

Minister for Agriculture

If the Board can strike on the proper production, there will be no necessity for a home-sales order.

Deputy Dillon

Can they not correct any error they make by a cold storage order ?

Minister for Agriculture

I do not think so—not always.

Deputy Dillon

If there is a surplus they can order it into the cold store and regulate the production by whatever quantity is lying in the cold store.

Minister for Agriculture

This is a much simpler method. As it is, there is only a period of two weeks and they can slow down the sales for two weeks.

Deputy Dillon

I cannot see that any effective case has been made for this home-sales system, or that the Minister holds out any prospect that the home-sales quota order will be controlled, as it ought to be, if we put such powers in the hands of an independent body. I do not think that the Dáil should delegate to the Bacon Marketing Board absolute discretion in apportioning the home market between the home curers where it is not absolutely vital to do so.

Minister for Agriculture

I am quite prepared to look into that point as to whether the Board has an absolute discretion. I do not admit that they have.

Deputy Smith

While there may be some danger in leaving absolute power in that matter to the Bacon Marketing Board, there would, I fear, be almost the same danger in leaving it to be regulated, as Deputy Dillon has suggested, more or less by competition. The Minister has pointed out the reason why it would not be desirable to leave that matter to be regulated by competition, the reason being that the price of bacon might be brought so low as to create a very serious situation in the industry.

Deputy Dillon

Although by the operation of the export quota and of the powers conferred under Section 106 you can reduce the supply of bacon to a figure almost identical with the figure represented by the actual demand on the home market ? By the operation of the two powers referred to, plus the powers vested in the Bacon Marketing Board for an allocation of the export quota, you can eliminate any possibility of a surplus on the home market.

Deputy Belton

Does that mean that in a period of surplus or excessive production the Bacon Marketing Board can so regulate the production of bacon as that it will just clear and that you put none into cold storage ?

Deputy Dillon

That might happen. This section is designed to deal with a situation in which there is a necessity for dividing the home market between the factories on the ground that there might be excessive competition if you did not do it. My answer is that the principle underlying this Bill should be to have as little interference as possible with ordinary competition. However, if you want to reduce the supply of bacon in order to avoid the surplus, sweep any surplus that exists into cold storage and leave in the hands of the curers only so much bacon as will supply the market. Let them fight amongst themselves to sell that bacon to the best advantage on the home market.

Deputy Smith

If you had not this home sales order could not the Board, under the powers conferred by Section 106, put into cold storage such an amount of bacon as would result in very keen competition for what was left to supply the home market ?

Deputy Dillon

I think it is a very good thing to have very keen competition between bacon curers. I am a bacon curer myself. I believe it is a very good thing to leave enough bacon on the market, and enough freedom in the market, to compel curers to compete for the home market so that the home consumer will not be exploited in order to provide funds to finance the foreign market.

Deputy Maguire

But, suppose, you only leave sufficient bacon to meet the demands of the home market, where is the competition to arise from ?

Deputy Dillon

Suppose two factories are equi-distant from a town, very keen competition may arise there. Ordinarily, a Limerick firm will wish to dispose of all its produce as near Limerick as it can. Ordinarily, a Claremorris firm will wish to dispose of its produce in or about Claremorris, and the same will apply in the case of a Waterford firm. Usually that is what will actually happen, but at the same time it would be no harm if a Limerick firm tried to extort an unfair price in its immediate neighbourhood that a Waterford firm should come over and offer to sell bacon to Limerick consumers. The moment that happened the Limerick factory would come down to an economic price, and then, of course, the Waterford firm would go back to Waterford.

Deputy Belton

Why should the Waterford firm do that if your production is only to meet consumption and not to lower prices ?

Deputy Dillon

Suppose that the Limerick firm is profiteering to the extent of 10/- per cwt. in Limerick. As a curer myself I hear of that in Waterford. I say to myself that I have to sell at an economic price in Waterford. I ask " why not send bacon to Limerick and get 5/- per cwt. of this profiteering price ?" The moment that I do that the price in Limerick is dropped. They may drop to about 1/- per cwt. above what would be the economic price When that occurs, of course, it would not be worth my while trading in Limerick, and I immediately go back to Waterford.

Deputy Belton

I grant you that such a thing as that might happen under ordinary conditions, but I do not see how it could happen under control.

Deputy Maguire

I do not see where the necessity for competition comes in when you are selling a quantity of bacon in a limited market except, of course, to get the best customers for your trade at the expense of the other fellow.

Deputy Dillon

Am I to understand from the Deputy that he stands for the principle of eliminating competition in the home market ?

Deputy Maguire

I fail to see where it is.

Deputy Smith

Deputy Dillon has advanced as a reason in support of his argument that under Section 106 the Board is given power to cold store that quantity of bacon that they regard as not being needed for the home market, but it seems to me that under the same section they can eliminate competition altogether if they so desire.

Deputy Dillon

Did the Deputy observe that under Section 106 the same percentage must be cold stored by every curer, whereas under Section 102 a home-sales quota order may be distributed amongst the curers as the Board thinks proper.

Minister for Agriculture

We have had a long discussion on this, and I repeat that I will look into the point made by Deputy Dillon about the Board having an absolute discretion. I do not believe that they have that absolute discretion under the section, but if they have I will see that provision is made whereby they are compelled to distribute the home-sales order on a proportionate basis—that is a proportion of the production less export quota.

Deputy Dillon

If the Minister is prepared to agree to that, then I submit to him that it might suit him just as well to drop this home-sales business altogether.

Deputy Belton

Section 98 gives the Board power to make a production order, and in making that order they must have regard to the various matters set out in the section. In view of that, where is the danger of a surplus on the producers' hands that makes Deputy Dillon worry about competition ? The market is surveyed. The Board fixes the amount that the market will absorb. The curers make that much bacon in the specified period and no more. Of course, as we get through with this Bill, Deputies will come to realise that the Bacon Marketing Board should be named the Bacon Curers' Board. They are going to manipulate that Board to suit their own ends and will not care about anybody else. They are taking absolutely no risks. It is the men who are producing the raw material who have to take all the risks.

Chairman

We will not discuss that question on this section. Are Deputies agreed that Section 102 should stand part of the Bill ?

Deputy Dillon

Subject to the undertaking that has been given by the Minister, I think that this question of a home-sales order might be dropped.

Deputy Belton

I am not going to agree to the section until I know what the Minister has promised.

Minister for Agriculture

I gave the undertaking that I would find out whether the Board has the absolute discretion that Deputy Dillon has spoken of. I have said all along that I do not think they have that absolute discretion, but if they have I will see how we can leave them with as little discretion as possible—that is as between curer and curer. If they are working this home-sales order, they must supply fairly to every consumer.

Deputy Belton

Have you not given terms of reference for making an order and a sub-order ?

Deputy Dillon

These are two different things.

Deputy Belton

The home-sales order is based on the production order.

Minister for Agriculture

Export to Great Britain is under quota. There may be home-sales, or, perhaps, cold storage——

Deputy Belton

Do you not allot sub quotas for export ?

Minister for Agriculture

Yes.

Deputy Belton

You get rid of a slice to each man, and then you come to cold storage. You allot special quotas by order, and each man must put a certain slice into cold storage ?

Minister for Agriculture

Yes.

Deputy Belton

You have dealt then with two headings of consumption. Next, you have home-sales. Do you not allot sub-quotas for home sales ?

Minister for Agriculture

That is where Deputy Dillon differs from me.

Deputy Belton

You have disposed of export and cold storage. In the beginning, you have based your entire production order on the capacity of your markets. You have one bit of a particular market to fill. If everything is done efficiently, you have only to fill that market on an exact balance from the production order. Where is the competition to come in ?

Minister for Agriculture

There may be a little bit too much or too little in a particular week.

Deputy Belton

It would be only 5 per cent. one way or the other. We know that it will not be done with mathematical accuracy. The next period will dove-tail into the previous one.

Minister for Agriculture

That is my opinion although we have spent a lot of time over the question.

Deputy Belton

I would agree with Deputy Dillon as to competition if there was any thing to compete for but, as the Bill stands, there is not. Deputy Dillon was very much opposed to competition yesterday when he forced an amendment to confine the business for ever to families in the bacon curing business.

Deputy McGovern

There will be no competition whether you put the surplus into cold storage and allot the rest evenly or make a sales order for the home market.

Section 102 agreed to.

Section 103 agreed to.