Thursday, 4 February 1937
Dáil Éireann Debate
Mr. Dillon: I asked the Minister for Agriculture to-day to requisition infor mation from the Pigs Board as to what they were doing with the money in the Hypothetical Price Fund. When we passed the Pigs and Bacon Act through this House, one of its features was that there would be what was known as a “hypothetical price.” Very few Deputies understand at this moment the nature of that arrangement. The representation made to us by the Minister was that, when the Pigs Board was established, their object would be to make the price of pigs to the producer more constant from month to month than it had ever been before. He wanted, at the same time, in order to achieve that purpose, to induce the producers to produce more pigs in the spring and early summer and fewer pigs in the autumn. He complained that there was nearly always a surplus of pigs in the autumn and a scarcity in the summer. To achieve that purpose, he  said that he wanted a scheme whereunder the Pigs Board would be entitled, in the autumn months, to fix a hypothetical price for pigs. That hypothetical price was to be substantially in excess of the price which the curer actually paid to the producer and the curer, in respect of each pig, was to hand over to the Pigs Board the difference between the actual price he paid the producer and the hypothetical price, as fixed by the Pigs Board.
In November of last year the price fixed for Grade A pigs by the Pigs Board was 58/- per cwt., or thereabouts. Every man who sold a pig got 58/- per cwt. For the purpose of my illustration, I propose to assume that each pig produced 1 cwt. of saleable pork. At the time that 58/- per cwt. was fixed as the “fixed price” for pigs, the “hypothetical price” for pigs was fixed at 66/-. That meant that the bacon curer paid the pig producer 58/- for his pig and paid the Pigs Board 8/- in respect of every pig he took in for curing. Later, the difference came to be 10/-, and I think that it is now 12/- per pig, so that, on every pig sold by a farmer into a factory, he was fined from 8/- to 10/- or 12/-. That money was taken by the factory and handed over to the Pigs Board wherewith to constitute the Hypothetical Price Fund.
We consented to that arrangement because the Minister told us that the only purpose for which that fund could be used was to carry out the reverse process in the spring months and in the months of early summer. He said that in summer we would find that the value of pigs would be, say, 60/-, but that he would see that the Pigs Board would fix a minimum price of 75/- or 80/- per cwt., and that farmers would get about 15/- a cwt. more than their pigs were worth. But the bacon curer who pays that inflated price for pigs will be entitled to recover out of the Hypothetical Price Fund which accumulated during the winter months, the difference between the real value of the pigs and the inflated price that the Pigs Board put upon them, so that all the farmer would drop in the autumn he would get back in the spring and summer. He wanted to do that so as to induce most people to produce pigs  in the summer and less in the autumn, and when the balance was nicely established, the whole thing would level itself out and the fund would be used for other purposes. I want to remind the House that, at our instigation, sub-section 6 of Section 147 was put into the Act, which compels the Pigs Marketing Board not to use the hypothetical price fund for any purpose other than the purposes referred to in that section, which are those I have described. Lest there be any doubt on that, I refer to column 260 of the report of the special committee which considered the Pigs and Bacon Bill, 1934. This is what I said to the 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.”
“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?”
The fact is that the hypothetical price fund was devised and should be used exclusively for raising the price of pigs in spring and reducing it in the autumn until we have got an even supply and have got around towards  having the price stable during the whole 12 months of the year. My allegation now is that what the Minister for Agriculture is doing is this: he is using, through his influence over the Pigs Marketing Board the hypothetical price fund for the purpose of relieving the Exchequer of a share of the bounty they ought to pay in order to meet the British tariffs. At the present time, there is a substantial tariff against Irish bacon going into Great Britain. The Minister's bounty does not nearly equal that tariff. However, we have a quota for bacon and pigs on the British market, the value of which is well known to the Minister. He is very anxious that the curers of this country will never fail to fill the quota for bacon, and, accordingly, when he does not want to pay out of the Treasury a bounty to enable them to export profitably to the British market, he is conniving with the Pigs Marketing Board and stealing the money that the farmers paid into the hypothetical price fund on the understanding that they would get it back in the spring, handing it to the curers as a bounty on their exports of bacon to make up whatever they have lost on their export transactions.
Deputy Holohan and, I think, a Deputy on the Fianna Fáil Benches asserted that the co-operative factory in Waterford was making bigger profits than it ever made. I want to congratulate the bacon curers on making more profits than they ever made, but what justification can there be for robbing the farmers of what they were legitimately entitled to receive by taking it from them and giving it to the curers? We are getting to-day 64/- per cwt. for grade A1 pigs at the factory. Comparatively few pigs make that grade. The cost of feeding stuffs has gone sky high, maize meal being £9 5s. or £9 10s. a ton, bran and pollard, 8/6 per cwt. and meat meal is nearly 12/- per cwt. At these prices, it is absolutely impossible to make a profit on pigs at 64/- per cwt. Until recently, we were only getting 58/- per cwt. Surely this hypothetical price fund ought now to be used to lift up the price of pigs to  a figure which will make it economic to produce them.
When farmers have paid this money into this fund—and nobody but the farmer who sold pigs to the factory contributed a penny piece—surely to God they are entitled to get that money back. Is it reasonable or is there any justice in asking farmers to provide the raw material for the immensely prosperous bacon curers and also to give the bacon curers a bonus of 10/- to 12/- on every pig sent in? There are extremities of abuse to which the agricultural community in this country will submit, but really, when they see these activities going on to the extent to which they are going on, activities which are a brutal injustice, it is difficult for them to hold their patience.
How can you defend giving Messrs. Denny or any of the great bacon curers in this country, some of them in a great international combine, hundreds of thousands of pounds from the pockets of the producers? The greatest pig producers are those in the congested and poorer areas such as Mayo, West Connaught and West Cork, Cavan and Longford. It is the people in these districts produce the pigs and they are fined from 8/- to 12/- per pig and the proceeds of the fund are handed out as a bonus to bacon curers. It is almost unbelievable that any Minister professing to be responsible for the agricultural industry would tolerate the existence of such a state of affairs, but not only is he tolerating that, but when asked to inquire, he says he will make no inquiries. He has the power to and the right to inquire, and could compel them to give him the facts, but he says he does not want to know and will not inquire. How can that man maintain that he is doing the duty he was appointed to do towards those whose interests he is supposed to protect, I cannot understand and it is for that reason I am giving him an opportunity this evening to explain what he considers to be his responsibility as defender of the producers, and why he is prepared to leave the interests of the bacon producers to his colleague, the Minister for Industry and Commerce, who shows mighty  little interest in the farmers who are supposed to be looked after by the Minister for Agriculture as their champion, spokesman and defender.
Dr. Ryan: It is hard to be what I might call positive with Deputy Dillon, as I think he has made the most nonsensical statements I ever heard. Deputy Dillon read some extracts from the debate that took place about the creation of the hypothetical fund.
Dr. Ryan: It was agreed that the hypothetical price would be what the curer should pay, taking into account the price of bacon and other things, and that the appointed price would be the price the producer should get, taking into account the cost of feeding stuffs; and if the hypothetical price was higher, the difference went into the fund, and if lower, the curer would draw from the fund. Now Deputy Dillon, in order to get away from that, says that the board was acting illegally and fraudulently. I suppose he looked into the matter since this morning and found that he was wrong but, he is not manly enough to say that he was wrong. Now, in order to create a smoke screen, he talks about taking money from the farmer. Why did the Deputy agree to the scheme at all?
Dr. Ryan: He was, and he will be honest enough to admit that practically all the provisions of that Bill were agreed. There was no dispute about them and it was agreed that there would be a hypothetical fund and that at certain times of the year money would be collected from the curers to put into that fund.
Dr. Ryan: Now the Deputy comes along, and in order to get away from the accusations he made to-day of acting illegally and fraudulently—these words were used quite freely by the Deputy about everybody concerned— talks about money being taken from the farmer and not from the curer.
Mr. Dillon: No. I agree up to the point of having the money in the hypothetical fund. My complaint is that when the money proceeds to flow out of the fund, instead of flowing to the farmers in summer, it is flowing to the curers.
Dr. Ryan: Let us wait and see where the Deputy will shift to before he finishes. It was always provided in this Act that the money would be collected from the curer, put into the fund and then paid out to the curer. I am not so innocent as to imagine that the curer pays it out of his own pocket. I know that it comes from the farmer or from the consumer eventually, but the machinery of the Bill was that the curer would pay into the fund and would take from the fund, and that is what is being done. There was nothing illegal or fraudulent about it, although the Deputy to-day said there was.
Dr. Ryan: If the Deputy knew a little more than he does, he would not make these accusations. The board were in the position that they had not the funds. It was not their fault. They told the curers that next spring they would get this money out of the hypothetical fund. A circular was sent to the curers—I did not expect this debate to come on until 10.30, but I have sent for the circular—in which the whole position was explained and stating that out of the hypothetical fund—it was very hypothetical at that time because the money was not there at all—they would be paid on the production of bacon during the months of March to May last as soon as the money came in. The money has been paid out in pursuance of that promise for last year's debt and they expect to have more money in in order to pay in respect of the coming year.
Dr. Ryan: I wish the Deputy would tabulate his objections when he comes to raise these matters, because he shifts his ground every time. His last objection was that they did not get it for last spring, and when told that they did, he objects that they did not pay a particular price.
Dr. Ryan: The Deputy's objection was that this hypothetical fund was not used as outlined by me during the Committee Stage of the Bill, that is, to give a bigger benefit out of the fund during the spring months and to collect in during the autumn months. That is exactly what was done, but, of course, when told that, the Deputy goes on to some other objection.
Mr. Haslett: ——was that it should have been in use now to compensate the people who persevered in the keeping of pigs in face of the high price of feeding stuffs. I gather that the real point is that the price should have been higher on account of the hypothetical price last year for those who have persevered in face of the dear feeding stuffs.
Dr. Ryan: That is what the board did, as a matter of fact. They said last spring: “We want you to pay a higher price than you can afford to pay and we promise to pay you out of the hypothetical fund.”
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