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

SECTION 145.

Minister for Agriculture

I move amendment No. 158:—

Before Section 145 to insert a new section as follows:—

(1) Whenever the Board is of opinion that the number of pigs available for the production of bacon is in excess of the requirements of the bacon trade, the Board may purchase pigs.

(2) Where the Board purchases any pigs under this section, the Board may do all or any of the following things—

(a) cause such pigs or any of them to be slaughtered and cured by a licensee on behalf of the Board and cause the bacon derived there from to be sold or to be put in a cold store;

(b) cause any bacon placed in a cold store under paragraph (a) of this sub-section to be sold on behalf of the Board;

(c) cause such pigs or any of them to be exported;

(d) cause such pigs or any of them to be slaughtered and either sold as dressed pork or subject to the provisions of the Agricultural Produce (Fresh Meat) Acts, 1930 and 1931, exported as dressed pork.

(3) Bacon produced by a licensee on behalf of the Board under this section shall for the purposes of Part III of this Act and this Part of this Act be deemed to have been produced by the Board and not by such licensee, and the provisions of Part III of this Act relating to levy in respect of carcases used for production of bacon and the provisions of this Part of this Act relating to levy payable by licensees to the Pigs Marketing Board shall not apply in relation to carcases used for the production of such bacon.

Chairman

When we were dealing with amendments Nos. 102 and 103 we agreed to defer them until we were dealing with this new section.

Amendment No. 102 not moved.

Deputy Dillon

Amendment No. 103 reads:—

In sub-section (2), paragraph (a), to add the words " and the Board shall pay to such licensee a fair fee in respect of the work carried out in accordance with this section.

Is the Minister accepting the principle that when the Board directs a curer to do work for them they will undertake to pay him a fair fee for the work done ?

Minister for Agriculture

Naturally, they must do so. Otherwise, the licensee will not undertake the work. He is not bound to do so.

Deputy Dillon

I observe that under sub-section (2) of the new section that where the Board purchases pigs they may cause them to be slaughtered and cured by a licensee on their behalf. That gives the Board a statutory right to compel a licensee to kill and cure pigs.

Minister for Agriculture

That is not intended. Perhaps the words " cause" should not be used in the new section. What we mean is that the Board would make an agreement with the licensee to take over and do the job for them.

Deputy Dillon

May we take it them that the Minister will amend this new section in such a way as to withdraw all power from the Board to compel a licensee to do the work ?

Minister for Agriculture

Yes.

Amendment No. 158 agreed to.

Amendment No. 103, by leave, withdrawn.

Deputy McGovern

I move amendment No. 159:—

In sub-section (1), line 21, to delete the words " lower or "

I do not see why there should be a price fixed lower than the hypothetical price, because if it is reduced in the summer time, when the price of bacon is high, then it will have the effect of lowering production at a time when the aim of the Minister is to increase production. On the other hand, if it is lowered at the back end of the season, when prices are low, the price will be too far below what would be an economic price for the producers. I submit that in either case there is no necessity for reducing it below the hypothetical price.

Minister for Agriculture

You have what is called the hypothetical price and the appointed price. You must build up a fund. We are visualising a situation in which we have neither tariffs nor export bounties, and we are trying to ensure stabilisation of prices. Unless at certain times you collect a small levy or a large levy, as the case may be, off the curers, then, of course, you will have no fund. Say that at the present time you could pay 65/- per cwt. for pigs. We say: " Pay the producer 60/- and give us 5/- to build up the fund." In that way we will build up a fund to be available to stabilise prices when required.

Deputy Dillon

I think that what Deputy McGovern desires to know is: is there no possibility of the prescribed price being financed form the Central Exchequer ?

Minister for Agriculture

Not under ordinary circumstances.

Deputy Mc Govern

Is it not being paid at the present time ?

Minister for Agriculture

It is because we have to work, if you like, a double system. We are trying to give out certain bounties against the tariffs collected in Great Britain. In addition we are working the Excise levy, which is more or less the principle that we are bringing into this section. We are taking a certain levy off the producers in order to build up a fund to give them a larger bounty at certain times in the year. Unless you give the Board power to collect the levy at certain times there will be no fund available when you require one.

Deputy McGovern

Why not raise this in the same manner as the butter levy ? In that case the price of milk is not reduced by the amount of the levy.

Minister for Agriculture

That Bill will be circulated, I hope, next week and you will find that the creamery can sell its butter on the home market at 140/- but, if they do, they pay 40/- into the pool. That is the same system as here.

Deputy Dillon

Is it proposed to abolish the export bounties in respect of bacon and pig products ?

Minister for Agriculture

I do not say that it is proposed to abolish them but we should, at least, have power to have that pool, collecting off the curers at certain times and paying into the curers at other times. The curer himself has done that, to a great extent, in the past. At times, he paid more for pigs than he could really afford to pay. At other times he made a good profit. He took the year as a whole and did a sort of stabilisation. All the curers did that for some years. We want, more or less, to continue that system and allow the Board to manage the pool.

Deputy McGovern

What season has the Minister in mind as the season in which he will reduce the price below the hypothetical price ?

Minister for Agriculture

How could I say that ? All the things set out in Deputy Belton's amendment will have to be taken into consideration. Yesterday I saw where 54/- was the top price Under present circumstances I would not reduce that price.

Deputy McGovern

If the cost of production were properly taken into account, and the price fixed on that basis, it would cover the whole thing.

Minister for Agriculture

It is quite possible that, having taken the cost of production and everything else into account, the curer could either continue to pay what he is paying for pigs, and pay the levy to the Board or, alternatively, reduce the price of bacon. The Board might say: " We have not a great surplus at present, is it not better to build up the pool than reduce the price of bacon."

Deputy Dillon

There is no intention by the Minister to use this levy for the purpose of building up a fund where with to pay export bounties.

Minister for Agriculture

Not as export bounties. I think that the State should continue the export bounties as against the tariff. I have an amendment down which raises that point. We want to get the home price and the export price even. There were times when it would pay a factory to export bacon and other times when it would not pay it. We should, as far as possible, leave the curers in a position in which it would be all the same whether they exported or sold at home.

Deputy Dillon

That is a virtual withdrawal of what the Minister said. The question whether it is profitable to export or not is regulated by the British tariff and by the Minister's bounties. Is the Minister going to pay an additional bounty out of this ?

Minister for Agriculture

Apart from the bounty and tariff, that position existed in the past.

Deputy Dillon

The Minister will try to equate the price in Dublin with the price in Liverpool.

Minister for Agriculture

Other things will have to be taken into consideration. If I were on the Board, I should be inclined to start by saying that nothing is to be gained by anybody by having the retail price of bacon changed from day to day, that we should try to keep the price level. When that is done, everybody gets better value and there is no profiteering. Acting on that basis, if the price of bacon in Liverpool or London changes, our bounty to this pool should vary. The Government bounty varies more with the tariff.

Deputy McGovern

The price in Northern Ireland should be taken into consideration. They have a Board working there and they have prices fixed. It would help if that were taken into consideration.

Minister for Agriculture

I do not see what difference that would make to us.

Deputy Dillon

The hypothetical price referred to in this section is the price which curers can afford to pay for pigs on the basis of present value ?

Minister for Agriculture

Yes.

Deputy Dillon

The prescribed price is the price which the Pigs Marketing Board decides it is in the national interest to have paid for pigs, and if that is less than the hypothetical price——

Minister for Agriculture

They can afford to give the margin to the Board.

Deputy Dillon

The Board will collect on each pig the difference between the hypothetical and the prescribed price, and, if it is greater, the Board will pay the difference to the purchaser. The Board's purpose will be to keep the price of pigs in Ireland level. What level will the Board aim at keeping ?

Minister for Agriculture

They will be guided by the amendment.

Deputy Dillon

And they will be guided, in arriving at the hypothetical price, by the price ruling for bacon in Liverpool.

Minister for Agriculture

And at home.

Deputy McGovern

The hypothetical price is the price it would command ordinarily in the market.

Deputy Dillon

Yes. But surely the price of bacon at home is going to vary with the price fixed for pigs by the Board.

Minister for Agriculture

Certainly.

Deputy Dillon

You must have some standard by which you are going to fix the hypothetical price. What is the hypothetical price ?

Minister for Agriculture

The price of production. The hypothetical price is ruled altogether by the price of bacon.

Deputy Dillon

Where ?

Minister for Agriculture

Wherever the factory is operating.

Deputy Dillon

There is no use in saying that the price of bacon will depend on the cost of the pigs and that the price of the pigs will depend on the cost of the bacon.

Minister for Agriculture

I am speaking of the hypothetical price as it now is. It is ruled by the price of bacon. Under the Bill we are going to try to change that.

Deputy Dillon

It is ruled by the price of bacon in the foreign markets.

Minister for Agriculture

And here. The price here may be controlled by the price in the foreign market. When there was free export of bacon, the price was controlled by the foreign market completely, but, seeing that we have a quota, I do not think that the price of bacon here is now controlled by the price on the foreign market.

Deputy Dillon

It is affected by the size of the quota.

Minister for Agriculture

It is controlled by the number of pigs we have left after filling the quota.

Deputy Dillon

At present, without this Bill, it is affected by a number of queer, irrelevant circumstances which result in temporary dumping by one factory in areas in which it does not normally trade. When the position is completely controlled, how are you going to arrive at the hypothetical price ? What basis are you going to take ? Is it the price in Liverpool ?

Minister for Agriculture

A certain amount of bacon sent to Great Britain. We know what the exporters are realising net after all tariffs and bounties are taken into consideration.

Deputy Dillon

That is the price on the Liverpool market.

Minister for Agriculture

The price realised by the curers on the English market. We know the stable price at home and, on the basis of the bacon sold at home and in England, at stable prices, we know what the hypothetical price is. On the other hand, the fixed price will be based on this amendment.

Deputy Dillon

Does not the Minister see that if you take into consideration the price ruling for bacon in the Saorstát in assessing the hypothetical price, you are taking into consideration the artificial price you have created.

Minister for Agriculture

Why should that make any difference ?

Deputy Dillon

You are not arriving at the true hypothetical price—that is, the current value of bacon. What you want to arrive at is what you would pay for bacon if there was no regulation at all. Having arrived at that, we say that the prescribed price must be paid. Having done these two things, the difference between the two must be made out and collected or paid out. You cannot arrive at that difference until you arrive at the hypothetical price.

Minister for Agriculture

Why should it be based on the price as if there was no control ? What really matters to the curer is what he is getting for the bacon.

Deputy O'Reilly

The actual price.

Deputy Smith

This method of determining the hypothetical price seems to me to be the ordinary method.

Deputy Dillon

What is the method ?

Deputy Smith

The method explained by the Minister.

Deputy Dillon

I do not know what it is.

Deputy Smith

The price obtained in England and the price obtained here at home.

Deputy Dillon

Something half way between the two.

Deputy Smith

The Minister said these two things would be taken into consideration when arriving at the hypothetical price.

Deputy Dillon

The difference between hypothetical price and the prescribed price must be worked out. The hypothetical price is a matter of fact; the prescribed price is a matter of desire. How are you going to arrive at what the hypothetical price really is ?

Deputy Smith

The Minister has told you.

Deputy Dillon

Is it the average between the prices ruling in the Irish and English markets ?

Minister for Agriculture

If half our supply of bacon were sold here and half were sold in England, it would be the average of the Irish and English prices. But if two-fifths of the supply is sold in England, and three-fifths here, that would not be so.

Deputy Dillon

Now, I understand. The Minister will ascertain the amount of bacon sold in England during the previous quota period and the amount sold on the home market, and he will take so many parts of the English price and so many parts of the Irish price and arrive at an average.

Deputy Smith

The Board will do that.

Deputy McGovern

Will the Board try to keep the price near the Northern Ireland price ?

Minister for Agriculture

I do not think we can take Northern Ireland into consideration at all.

Amendment No. 159, by leave, withdrawn.

Amendments Nos. 160 to 164 not moved.

Minister for Agriculture

I move amendment No. 165:—

At the end of the section to insert a new sub-section as follows:—

(5) Where the Board are authorised under any of the following provisions of this section, namely, paragraph (c) of sub-section (1), paragraph (c) of sub-section (2), paragraph (c) of sub-section (3) and paragraph (c) of sub-section (4), to pay a sum in respect of any pig or carcass, the Board may, with the consent of the Minister, pay different sums in respect of a pig or carcase, the bacon derived from which is exported, and in respect of a pig or carcase, the bacon derived from which is not exported.

I have already referred to this. It will be possible under the section to differentiate between the bounty on bacon sold at home and bacon sold for export. If we have, more or less, staple prices for bacon here, for instance, 90/- per cwt. and if bacon in England is selling at the same price the Government bounty is equated, but if the bacon in England went up by 2/- a cwt. our Board might say it is better to keep staple prices here and for the moment, at any rate, we will give the 2/- for the export bacon. The same thing would apply vice versa, if the price went down in England, and, so from the point of view of trying to get staple prices here and to give the same advantage to the curer exporting, say, three-fourths of his output as to the curer supplying one-fourth for export and three-fourths for the home market. Last year, I think it was in June, July and August we had considerable difficulty in getting the producer to fill the quota, the reason being, of course, it was 10/- or 12/- a cwt more valuable to have them sold at home than to export. It was rather unfair to find one curer whose export quota got three-fourths of his output losing that money and another curer, a competitor of his own, perhaps, supplying only one-fourth for export and the rest for the home market. We shall have to equate in these things.

Deputy McGovern

Could not bacon be put in cold storage during the time when the supplies are large ? How long does bacon last in cold storage ?

Minister for Agriculture

I am not sure. I think the cold storage bacon does not last beyond April.

Deputy McGovern

I do not under stand much about it. How long do you think it would last in cold storage ?

Minister for Agriculture

I am not sure. About four or five months, at any rate. It is once it is taken out of cold storage that if has to be used quickly.

Deputy Dillon

I want to clear up a matter that is crystal clear to Deputy Smith—this matter of the hypothetical price. Am I to understand that if two-fifths of our bacon is exported to Britain at 80/- a cwt.— 80/- a cwt. is the price in Liverpool—and three-fifths sold at home at 70/- per cwt. will the hypothetical price for bacon be 74/- ?

Minister for Agriculture

I think you are taking the average of 74/-.

Deputy Dillon

Is it not on that hypothetical price of bacon it will be decided ?

Minister for Agriculture

Yes.

Deputy Smith

You are quite safe now.

Minister for Agriculture

I am assuming that is what will guide the Marketing Board. I do not think it is laid down in the Act.

Deputy Dillon

I thought I understood the Minister to say to-day that he had power to fix the price.

Minister for Agriculture

I cannot instruct them.

Chairman

My opinion is that the hypothetical price at first will largely bear very close relationship to the existing price of bacon. Tradition will, have a good deal to do with it, but I imagine that the Board will not endeavour to raise or lower prices violently.

Minister for Agriculture

The price ruling at present may be a few shillings too high, because the Tribunal that examined this matter thought that the curers were making a few shillings too much. But with that reservation the present price here is the hypothetical price.

Deputy Haslett

Is not the present price determined by the export price ?

Minister for Agriculture

I do not think so, now that we have a quota. It would be if there was a free market for export.

Amendment agreed to.

Section 145, as amended, agreed to.

Question proposed: " That Section 146 stand part of the Bill."

Deputy Dillon

You have not put in the amendment referring to the Bacon Marketing Board to the effect that they could do experiment in relation to things other than pigs and bacon.

Minister for Agriculture

That is true. We can consider that.

Question agreed to.