Tuesday, 14 February 1984
Dáil Eireann Debate
Mr. Naughten: It is my pleasure to welcome this Bill which extends the duration of the State guarantee for borrowings by An Bord Bainne for a further six years to December 1989. This Bill will give a much needed boost to the dairy industry which is experiencing major problems, many of which are not of our making but have been imposed because of the policies pursued by various Governments in the EEC.
The problems relating to our dairy industry are twofold. Some have developed as a result of ever-rising inflation during the past five years which has increased substantially the cost of inputs. In addition there are massive problems with regard to disease control and substantial losses have been faced by many farmers who have been badly affected by outbreaks of disease in their herds.
As well as these internal problems there is also the difficult problem regarding the proposed super-levy. I compliment the Minister on the tremendous efforts he has made to fight the farmers' case in Brussels. It is vitally important to get a derogation from the super-levy. Unlike other economies in the EEC,  agriculture is the motor of the Irish economy. It is around agriculture that the whole economy revolves and if agriculture is not thriving our economy will stagnate. It is extremely important that the Minister should continue to pursue the line he has taken and resist any attempt to impose this super-levy. We have a greater percentage of dairy exports than any other EEC country. We depend more on agriculture and dairying than any of our EEC partners. We have not caused this glut which is flooding the European market with milk and butter. These problems are caused because of factory farming carried on by some of our EEC partners. The sooner the better our partners face up to that fact and realise that we are not causing the problems and should not, therefore, be expected to contribute to solving it. Our total exports are a very small percentage of overall EEC production and the implications of the super-levy would be devastating, not alone for the farming community but for the whole economy and for employment.
The way our partners have treated us vis-à-vis the super-levy is very unfair. It is in breach of the principle of the Treaty of Rome whereby the weaker partners should be helped in the developing of a united approach throughout the whole of Europe. We are all behind the Minister in his efforts to defend this country from the effects of this levy. We cannot look on this levy in isolation but must also examine other aspects of agricultural production which are under attack from the EEC Commission. I speak of decisions taken recently regarding intervention payments and subsidies which we enjoy on exports to Third World countries.
We are getting a very raw deal from the EEC. They should recognise the vital importance of agriculture to our economy and to the livelihood of a large section of our people. We depend basically on our exports, whether dairying or beef, because such a large percentage  of our output is exported. I deplore the response we are getting from the EEC. When one looks at this Bill and talks about the dairying industry one cannot but wonder why, at a time when we are finding it exceptionally difficult to get rid of our butter mountain, our industry does not diversify into other areas.
I welcome the money invested by An Bord Bainne in research and examination of other products which can be manufactured. A far greater proportion of our milk production should be diversified into cheese, milk powder, chocolate crumb — for which there seems to be a market — cream casein — for which there is an excellent market in the USA — yogurts and liqueurs. It is important to examine what can be done in those areas. Milk is being manufactured into butter and this causes two problems, a butter mountain and a skimmed milk powder mountain. If we do not diversify I do not see any hope of reducing those mountains.
I welcome the decision taken recently in regard to the reintroduction of the farm modernisation scheme. I would like to compliment the Minister for reintroducing this. It is important to encourage the removal of cattle from land and their housing during the winter. They do untold damage on the vast majority of our farms. I also welcome the decision by the Government to appoint four Ministers of State with direct responsibility in the food processing area. This is one area where we can create a large number of new jobs. I believe we should be processing a far greater percentage of our food, whether dairy produce or beef. It is in the national interest that we do this and try to create the maximum number of jobs for our young people in downstream industries. I appeal to the Minister to reduce the amount of imports from third countries. I am very disappointed that while on the one hand, our producers will be penalised if the Commission get their way with the super-levy, on the other hand, we are importing dairy produce from third countries. This is very unfair and it is difficult to understand why those imports can be the cause of our farmers being penalised.
 The MCAs are creating major problems for our farmers. The Minister should do everything possible to alleviate the major problems which those subsidies are creating for our producers. It is in the interest of everybody that everything possible be done to stimulate agricultural production. We are having a very difficult time in relation to the discussions which are taking place in the EEC and the threat this could be for many of our farmers. I am sure the Minister will do everything possible to protect our vital national interest. I compliment him on the stand he has taken so far. It is vital that we get a derogation from this levy. I welcome the Bill and I consider it appropriate that it be introduced at this time.
Mr. E. O'Keeffe: I support the Bill. I want to pay a tribute to the great success of Bord Bainne. This organisation was founded as a semi-State body before our entry into the EEC and has sold the name of Ireland right around the globe very successfully. If the present trend continues Bord Bainne will become an intervention agency. We have lost some of our largest markets. I refer specifically to the Mexican market which we have been priced out of. It is very bad to lose that market and other markets at this time because of the oversupply of dairy products. Those problems have been caused by the expansion of agricultural production in the USA, possibly under the Carter policy, and in a more recent change in policy by President Reagan the world market is now flooded.
The Minister should communicate with Bord Bainne on a very regular basis and he should get the Government to make money available to Bord Bainne to enable them to retain the markets they have. They should be given money for promotion and possibly transport subsidies which are not in breach of any of the EEC regulations. If we are not able to compete in relation to intervention, the countries which will get in now will be there for the brighter days. They will retain those markets and will reap the benefits of the substantial increase in prices which will come in the future.
We have been very successful with the “Kerrygold” brand but we have got ourselves into deep water in the UK market. We have practically lost all that market. We are a disadvantaged nation as far as our EEC membership goes in relation to exports. We must look at a more co-ordinated approach in our marketing. Córas Tráchtála on the industrial side have done an excellent job. We have the PBC for which support was expressed here last week and we have An Bord Bainne. There may be other bodies also but we must co-ordinate those three. We as a small exporting nation cannot afford to be fragmented. The three bodies frequently have gone in separate directions and that has not happened without notice in the various trade fairs around the world. That is not good. We should be able to harness the three together and then we will be able to make a major success of our agricultural exports.
Mr. E. O'Keeffe: That must be our way forward. In recent years we have come into a strong position with five or six large co-operatives who have their own brand image, but it should be possible for an organisation such as An Bord Bainne to permit more extensive use of that brand image if advantage is to be gained thereby. In centralised markets incentive very often can be killed because all are equal and lack of competition can kill our marketing in terms of quality and of sales. Bord Bainne have protected their “Kerrygold” franchise. They should have broadened it and allowed some if not all of our major co-operatives to sell “Kerrygold” on their own. Any of them might have a vital market which could have been doubled in the last ten or 20 years before An Bord Bainne were founded, and we are aware that that board have not total co-operation from the dairy industry. The will is there to give them support and the outlook must not be narrowed. I appeal to the Minister, the Government and the people for a more co-ordinated marketing approach. We should be able to incorporate all the brands. France, a very big agricultural  country, has a number of brand images and is not confined to one or two. There are many which anyone going to the Continent will notice and I am sure the Minister has seen them on his table in the morning in Brussels.
We must look at the super-levy. The Government have failed to alert all other European countries to the grave and serious implications that this levy will have for this country. The Taoiseach has visited many European capitals but he was late in the day. He should have made those visits and alerted the people of this nation to those implications early when the super-levy was first announced. We have seen the milk-and-water approach of the Ministers to defending our farming and our dairy farmers. The first effort to educate the EEC Commission was the intervention adjustment by our Government which meant a substantial loss to our dairy farmers and to our economy. After that came the EEC decision to add another 30 days to that. We are entitled to a special deal inside Europe. We are one of the most disadvantaged members of the EEC. If we produce a pound of cheese, beef or anything else it takes an extra 1p to get that on to the British market and another 1p again to take it to a continental market. That is our position vis-à-vis the mainland countries of Europe and our small volume of production. We must have a major case in Europe.
We are strategically well positioned. We must admit that the influence the US has on the market in Europe has given New Zealand its advantage because the US are prepared to defend New Zealand and give them a concession as a friendly nation. We should use our bargaining power in that area to get what is best for our people, especially for our farmers.
The Minister in his speech last week said that milk would be in deficit in 1988-89 and we would have the right to apply for an increase in quota. If there is an increase to be adopted in the quota we should have a right to a higher percentage increase in that quota than any other nation and any new agreements being drafted must have that written into them.  We have accepted that 1983 will be the base year. We should not have shifted on that. We should have retained the argument that 1981 would be our base year for the super-levy and that it would be open-ended until 1993. That would have taken care of what I have spoken about and we would have no problem. As I have said, we are a totally disadvantaged area in every way. No part of this country has the advantages which Brittany, Normandy, the Dutch in spite of their factory farming, the Danes or the Germans possess. We have not argued our point or made our case strongly enough in Europe. Up to now we have lost approximately £100 million because the Government have not the commitment to put in that £1 to get back the remaining £s to support us. While the Government lack that commitment our agriculture can go in only one direction, continue to contract rapidly. The farm modernisation scheme, which is relevant to any dairy expansion, has suffered interference, and that has eroded the confidence of our agricultural community. Farmers had plans and they assessed that they would be entitled to £5,000, £6,000 or £7,000 grants. What happened? Overnight the stroke of a pen of the most uncaring Government ever in office eroded that.
Reference has been made to the four Ministers of State dealing with food. How in the name of God can they be serious when a promise was made on the floor of this House that £1 million would be made available to set up co-operative type producer groups, and then we got a paltry £100,000 in the budget?
Mr. E. O'Keeffe: That was the commitment. That is what we got. A great deal of blame has been laid on cereal substitutes coming into the EEC from Thailand and, more recently, China. The one most frequently referred to is manioc, or tapioca as it is better known. We should seek a concession for new articles of association similar to those drawn up in Europe in 1958 when the coal and steel agreements were being drawn up. At that  time manioc was unheard of as also was maize gluten which was a substitute for or a by-product of maize. Those are the commodities that are harming us now and it would be in our interest if an embargo or a very high levy were placed on them coming into the EEC. We should seek this embargo and we should look for new terms and agreements to be drafted to take care of this situation. These commodities are produced cheaply outside the EEC and it suits the Dutch, the Germans and the French in the north of their country to have those substitutes as cheap feed. That is to our disadvantage because we as a peripheral nation in Europe are totally disadvantaged and often we are left with the rubbish, the residue in the boats which transport these commodities. How often have we seen that in the loads dumped in the yards of our provender mills? Therefore, I appeal for new articles of association and that our case be made in Europe regarding this.
I tell the four Ministers of State to whom I have referred that they must start with the right approach to getting concessions for us and then our agriculture will develop. Lack of commitment is our problem. In this Government we need someone like Deputy Cluskey who, when he was not getting his own way, was honourable enough to resign. That is what the farming community are looking for because they are totally disillusioned. We have seen levy piled on levy. The provisions in this budget for 1984 will cost the dairy industry and our food industry a figure which I will round off at £10 million. They are the losses I am concerned about. Many of our dairy co-ops and those involved in the food sector are financed in this manner. I have no doubt that somebody involved in the production of the Telesis report was able to convince the civil servants in the Department of Finance that this should not continue. While we have a Minister for Finance who is more a civil servant than a representative of the people we will have more of this piled upon us.
If we are serious about developing our food industry we cannot ask people to operate with expensive finance. The  problem is that the Government do not have a policy on food production and the Left in the Government do not know what the Right are doing. The Government do not have any commitment. I have no doubt that when the demand is put to a Minister like Deputy Barry Desmond to cut the Health Estimate by £2 million he passes on that demand to Agriculture. Agriculture is on its knees in this recession. I appeal to the Government to have another look at section 84 and make an effort to develop the industry.
There has been talk of a levy to develop Bord Bainne and I should like to know who will be expected to pay that levy. I have no doubt that the Government will ask the farming community to pay it. Last week the Minister referred to a report in a newspaper to the effect that 10p per gallon would be dropped off milk because of intervention regulations in regard to acid test, moisture content and low fat levels. We have been told that there is a reluctance by intervention agencies to purchase milk and that will hurt our economy. Our problem is that the Government are not prepared to fight our case in Europe.
There is practically no butter surplus. In regard to this we should be leading the way and making butter available at a cheap price to old age pensioners and social welfare recipients. That would amount to a commitment by the Government that they are determined to remove the surplus in Europe. In the Community about eight million people are employed in agriculture directly while in Ireland the figure is in the region of 231,000.
I should like to know what has happened to the school milk scheme. Consumption has dropped from 45 per cent to 27 per cent but the Government are not doing anything about that. The Government should make a decision to provide fridges in all schools. That would not be expensive. The quality of the milk delivered to schools is often questionable and we should look at the quality of bottled milk and insist on high quality. The Department should initiate a research programme to discover the flavours children would like in their milk. That would  help solve our dairy surplus and it would not cost the Exchequer a lot of money.
We have the cheapest method in Europe to produce milk although climatic conditions can often present difficulties. There are 70,000 full-time dairy farmers here and our average herd number is 22 cows giving an average yield of 700 gallons. The average yield in the Community is about 950 gallons. If present trends continue I have no doubt that 20,000 farmers will be forced off the land thereby creating greater social problems in urban areas. That will happen if the Government do not change their attitude to agriculture. They do not have the will to defend that industry and the dairy industry is under attack from them. Massive unemployment will occur unless the Government change their tactics. We must remember that agriculture is not fully developed. Where will the 20,000 farmers move to? I have no doubt that there will be more pressure on housing and schools in urban areas. The Government should produce a policy for agriculture similar to that operated under Fianna Fáil. They should not run away from agriculture.
Mr. E. O'Keeffe: The Deputy should not bother about the resource tax or the 2 per cent levy. He will get his own resource tax and levy when he returns to Meath. All newspapers have criticised the Government over their attitudes to agriculture. The monthly bulletin produced by the ICOS and the Farmers Journal, the Government's own paper, have been critical of the attitude of the Government in recent weeks. They have highlighted the likely losses farmers will suffer. The Minister should do something positive for the industry and not adopt a shortsighted approach because the economy is in recession. There will be brighter days again. The Boston report on the dairy industry compiled by Bord Bainne was issued recently. As a native of one of the most influential dairy towns in the country that has a great history of  cheese-making, I am anxious to know why Bord Bainne compiled such a report. In my view they did so because of the pressure on the cheese-making business. We must have some protection in regard to that section of the industry. If we do not fight our case in Europe we will not have any cheese-manufacturing unit here. That is a warning I hope the Minister will heed.
There is a lot of talk about diversification. Diversification is not of much use to us because we do not have the population to sell to. We have been involved in skim milk powder, whole milk powder and butter and skim. The Minister should return to Brussels with a heavy hand and make demands of the Commission. If he has the support of the Government he should use it in his negotiations for the benefit of the country. We have been let down on too many occasions. I believe that as far as agriculture is concerned we are the most disadvantaged state in the Community. I understand the position of the Fine Gael Members because the social side of that party does not have any time for or commitment to agriculture. I advise the three Ministers responsible for agriculture to adopt the Deputy Cluskey attitude. If they threaten to do as he did the Government will realise how serious the problem is.
I wish Bord Bainne well and I accept that they have a difficult task ahead. They should try to retain their markets so that we do not become an intervention agency. Existing markets are vital for the farming community and the economy in the years ahead.
Minister of State at the Department of Agriculture (Mr. Connaughton): Members of the House will by now be very familiar with the purpose of this Bill and I am sure that like me, they will fully support its objectives. The Minister has fully explained the necessity for a State guarantee for Bord Bainne's borrowings for a further six years. During this period, it is hoped that the board will further increase their own resources, thereby becoming less reliant on State backing for a proportion of their borrowings. In the meantime, however, I think it important  that Deputies on all sides of the House should recognise that quite apart from the tangible support which the provision of a State guarantee affords Bord Bainne, it is vital at this present time that the symbolic value of the guarantee be fully appreciated.
No Member of this House needs to be told by me of the central importance of the dairy industry to the whole agricultural industry in Ireland. Over the past six months or so since the EEC Commission published their proposals for reforming the CAP, with particular emphasis on the milk sector, we have all been made to realise the importance of dairying in the context of the overall economic and social development of this country. I am not talking simply of an industry which would maintain its present position. Rather, I am referring to a progressive and imaginative industry which, given the opportunity, would expand further and I know that Irish dairying has the potential to fulfil this role. I am confident that the Government's negotiating efforts in Brussels will secure a climate in which continued, profitable expansion of milk output will be possible, but increased output, vital though it is, is still only half the story. For the industry as a whole to prosper, we must maximise efficiency in processing and marketing.
I should like to refer to all this diversification we have heard so much about in this debate and in others in the House. It has become a cliché in the mouths of many people. I will bring a number of things to the notice of the House. First, I suggest that research and development are very important in every walk of life and in most industrial projects. Some of this has been done here with very good results, which I will refer to later, but it is a huge area in which our dairy co-ops and An Bord Bainne for many years seem to have been fighting shy of getting deeply involved.
Of course there are good reasons for this and I will outline them in a few moments. At the same time, any businessman with an eye to future markets must see that unless a great deal of time, thought and effort are put into products many years before they are expected to  hit the shelves in the shops or the tables of the consumers, time will overtake such products and somebody somewhere else, with a more modern approach earlier, somebody who has back-up facilities in research and development, will push us out of particular markets. I am informed reliably that it can take as long as five to ten years from the inception of an idea on diversification of milk into other products before these products will appear on supermarket shelves and try for themselves the rigours of competition. By any standard that is a long time.
First of all, such new products will have competition on the home market, a small market, according to Deputy O'Keeffe, of three million consumers, not enough by any standards to ensure the success of a new product. Such new products would have competition on our shelves here from foreign producers because of free trade. We are confined to the small consumer base.
Another militating factor that has created a problem for us here is that our taste changes very slowly. People in chemistry will tell you that it takes a long time before we accept what would have been accepted in Europe long before. An example is yogurt. It came on the market but many people here at first said they did not particularly like it. We here do not seem to have an aptitude to change our tastes quickly. I think we are overcoming that now.
The biggest problem of all about the introduction of any new product in Ireland is the long time that intervenes from the inception of the idea and its introduction to the market as a competing product. Any Irish concern in the dairy processing industry must have great foresight to be able to say that any product, irrespective of how good it is, would have a future by the time it would reach the market or that a market would be there for it.
We must be realistic about this. We have known for many years in this House and in the creamery industry that we would need diversification. Deputy O'Keeffe a few months ago — because he is an Opposition spokesman he apparently has the answer to everything — made a number of points, some of which I agree with and could see some sense in, but it is true that because the total amount of milk one could expect to put into a diversification programme in the years to come compared with out total production would be so small, diversification would not make an impact, if we take what has happened in the last ten years. Deputy O'Keeffe forgets that all the other avenues have been choked because of intervention. There is a jam in Europe.
Mr. Connaughton: The only reason we have a problem is that intervention stores in Europe are jammed because we were producing a product that we could not sell anywhere else. The Deputy's Government have been in power far longer than mine since we joined the EEC and there has been no reduction in production. The Deputy's kind of talk will not do anything for the Irish dairying industry.
Mr. Connaughton: Do not let anybody be under an illusion as to what the real causes are. The two practising farmers opposite know what the real reason is. It is because we have a huge mountain of butter and other milk products in the EEC and we paid billions of money to try to get rid of it. Speaking as a farmer, I  know that we must be assured of a return and the only way to do it is to produce something the consumer wants.
Mr. Connaughton: Everyone understands the problems. What we must do now is ensure that Ireland comes out of this unscathed. The Minister's policies are correct and we will see proof of that in a few months' time.
Mr. Connaughton: At the last Summit in Athens we saw eight or nine big countries all thinking the same way — if the CAP is to survive the huge milk surplus will have to be contained. The only country which was not of the same mind was Ireland.
Mr. Connaughton: I did not interrupt the Deputy. This is of vital national interest. It does not only affect the farmers who are involved in milk. We have total opposition to the milk super-levy and no matter how many circles Deputy O'Keeffe draws he will not prove otherwise. The Deputy made reference to the late negotiations, particularly by the Taoiseach——
Mr. Connaughton: That has a very hollow ring, as well the Deputy knows. We contribute less than 5 per cent of the total output of milk in Europe. We have also been late starters and because of developments we now find we cannot compete with other countries. At the same time we have done sufficient work. The Taoiseach had a long hard slog to put our view across to all the heads of Governments. Everyone in the EEC knows of our problems. To say that we are selling out is utter ráiméis.
Mr. Connaughton: The Taoiseach, the Minister and the Government will stand up for every Irish farming family. I have no doubt that Fianna Fáil will confess openly that they are not for derogation or what goes with it. They have their own ways of doing everything but Deputy O'Keeffe knows that when they were in Government our agricultural output dropped.
Mr. Connaughton: If the previous Government had watched their p's and q's in 1977 we would have a different story today. At the Paris Summit we will bring the whole story to the table. We will tell them of our dependence on milk and milk products and that because of our slow start, we need all the help we can get. A ceiling on production would be very bad news for us.
Mr. Connaughton: I like the sound of the Deputy's name. As regards the diversification programme I have seen important developments take place. The Tipperary Co-operative in conjunction with a German interest have gone into the cheese manufacturing area. This type of venture involving an Irish co-operative with its shareholders and board of directors doing business with a German interest is to be recommended. In the heel of the hunt we would like to pilot our own aircraft all over the world but we might be better off to use an international vehicle to carry our products.
Mr. Connaughton: We will have to give a lot more thought to this kind of a link-up as we will be going into markets which are many times bigger than our own. On one occasion I had the good fortune to  be in County Cavan and saw Virginia Milk Products Limited. They are a shining example of what can be done. That is a local County Cavan co-operative and together with Baileys they produce what has become a world renowned cream liqueur. There were many reasons why they were fortunate in that respect but one of these was their linkage with a great marketing arm. That is another example of a local Irish co-operative succeeding by way of a link-up with a group who had a foothold in a far bigger market. Likewise, Waterford Co-operative in conjunction with a French interest are selling their product in Britain.
When one has access to a market the task of selling another product on that market is made much easier. I would advocate that the various exporting agencies, and particularly Bord Bainne, pay even greater attention than they have been paying in the past to this aspect of exporting.
I do not intend taking up the time of the House in talking on matters that have been dealt with many times before but I should like to refer to the dairying industry. We have particular problems, financial and otherwise, in regard to our supply pattern of milk, and that can have repercussions on our production of cheeses. Perhaps there is a case to be made for a massive co-ordinated approach among the interests in cheese manufacturing for the purpose of arriving at some type of loose arrangement which would involve a commitment to cheese production all the year round. This is a matter that is being pursued actively at the moment and I hope that there will be a satisfactory outcome.
I recall that in the pre-EEC days of the sixties there was great interest being expressed in finding some kind of market leader. We came up with Kerrygold butter, a product that has brought the name of Ireland to many communities throughout the world. However, in the context of research and development we must ask ourselves why our share of the British market has been reduced to 7 per cent especially since Britain is our nearest customer and one with which we have done business in many respects for many years.  Having regard to the success the Danes have had with the type of unsalted butter they produce I am surprised that we did not change over much earlier to lactic butter.
Mr. Connaughton: If the Danes could do it, there is no reason for our not being able to do it. The Kerry Co-Operative's involvement in the US market with caseine is a very good development. I am hopeful that other societies, working in conjunction with Bord Bainne, will adopt this type of pioneering role in the near future.
On the question of the review taking place in Europe, I should like to put on record our exact position in so far as our dairy industry is concerned. Anybody who would suggest that we do not have a problem could not be said to be conversant with the facts. We have a problem in that there is a huge milk and butter surplus in the EEC which is becoming very difficult to sell off, no matter how low the price — and low prices are always at the expense of the taxpayers of Europe. On the other hand, we are arriving at a situation where we must insist on something being done. This is something that the Commission will have to take a lot of responsibility for. Four or five years ago the danger signals were already flickering in Brussels. Each year at price-fixing time everyone thought of the problem of the CAP and of the future financing of the Community, but because there were easy options then for all Governments a blind eye was turned. The only situation that ever brings a group or an individual to their senses is when the money runs out, and that is exactly what has happened. We now have the situation in which big industrial nations such as the Germans who, unlike us, put more money into the Community than they take out of it, have decided now to call halt. Therefore, before we have anything to do with own resources in the future we must make sure there is light at the end of the tunnel.
Mr. Connaughton: There must be a declaration that each member is prepared to put its house in order first. Only then can the question of the level of own resources arise. When one considers that this nation is a net beneficiary — for every £1 we pay into the EEC we benefit to the extent of £5 — one realises that our EEC involvement is very important to us as a nation. When the finances are being put in order in Paris in a couple of months time we can only hope that the big industrial nations, having regard to the spirit of the Treaty of Rome, will see fit to treat small nations as we believe we should have been treated when we joined the Community. We have done enough on a diplomatic and political level to ensure that we have persuaded the big nations that it would be suicidal for us to do what everybody wants everyone else to do. This is the problem from a negotiating point of view. The Minister will be going to the table on the basis of the importance of the restricted production of milk in the EEC while on the other hand he will be asking for special concessions for Ireland. That will be a very difficult job but anyone who followed the proceedings at Athens will agree with me.
Mr. Connaughton: It is very important on an occasion like this that one shows the need there is for a balance. One would have thought that anyone who took an interest in the Athens summit would have realised that we were resolute, dedicated and that above all else we were able, in a balanced way, to put a particular proposal to our EEC partners, most of whom are much stronger than we are but who must all understand that we have an important commitment on the European scene. If that were not the case, we would not have been admitted in the first instance. As a nation we have much to offer. Our dairy industry is important and if certain things are done at EEC level this country will progress.
There has been much talk of doom and gloom with regard to the agricultural industry and perhaps I should inform the House of certain figures recently released by the EEC. Our farming income has increased by 3½ per cent, 11 per cent before one takes inflation into account. That increase was the largest in Europe last year. All of us would like all farmers to do much better but it is important that we put the position of farmers in proper perspective from an EEC point of view. In relation to other farmers in the Community, we have made considerable progress.
I hope that after the successful conclusion of the Paris summit, Irish agriculture will get the shot in the arm that is needed. The market for cereals and sheep is bright. There have been dark clouds over the whole area of milk production in the past two or three years and particularly  in the past 12 months but when those clouds disappear Irish farmers will see that it is in their interest to ensure we have top quality milk products. Because of the favoured position we will have then vis-à-vis other countries, Bord Bainne must see to it that we produce as much milk as is possible. I should like to commend Bord Bainne for their recent announcement that they were considering a small levy on milk for the promotion of research, development and marketing. I understand they are talking at the moment about 0.5p per gallon.
Mr. Connaughton: As I said a few moments ago, Bord Bainne should have done this years ago. Perhaps they are a little late in the day with their action but it is never too late. We have to realise that we must use whatever facilities are available in Europe, such as intervention and other measures, but after that we are on our own. We must be competitive. We must use the best marketing expertise. If Bord Bainne carry out a worthwhile development and if that means we can have new products, the future is bright for Irish agriculture and for milk products.
Taxpayers may ask why we do not send butter to starving people in view of the fact that we have a butter mountain here and elsewhere. Many Deputies have considered this matter and I should like to see a greater interest shown in it. It does not make sense to overproduce a certain product so that we get to the stage where we cannot sell it. As the House knows, it is more costly to store butter under refrigerated conditions than it is to manufacture it. It should not be beyond the capacity of a sophisticated EEC Community to adopt some system to ensure that some of this butter is sent to starving people. This will not solve all problems but if we have to subsidise it at least we  will know the product is being put to good use.
While the nation waits with bated breath for the Paris summit, it is important to point out that this Government have shown resolve, enthusiasm and dedication in pointing out our difficulties. It has finally got across to our EEC partners that under no circumstances can we have a ceiling on production. We have made that very obvious. When the summit is over I am confident they will accept that we have problems but I cannot let the occasion pass without putting it on record that this is the toughest fight for any Irish Minister for Agriculture. We have had very good Ministers in that post since we joined the EEC but previously we have had the benefit of a devaluation of the green £. Usually when a Minister for Agriculture came to the Dáil after price fixing negotiations there was always some good news. During the years we were able to tag on important aids such as a subsidy on lime or an AI or a calf premium. The problem now is that the oversupply of milk was not tackled four years ago or in the intervening years. Now we have a huge problem to face. I do not think anyone should be under any illusion about the task facing the Minister for Agriculture and eventually the Government in the negotiations that will take place. Following the Athens Summit enough has been done and said in the way that counts, behind closed doors, with the people who wield the power. I believe the Taoiseach and the Minister got it across to the people who count that there are certain things we could live with and others we could not, and the super-levy is something this country cannot live with.
I hope that this year once again we will top the income league of European farmers. That was a great achievement for our farmers last year under difficult conditions, but they have the type of resilience and dedication that is necessary. The Minister, in my view, will be able to negotiate the type of opportunity our farmers are looking for when he goes to Paris in two months time. Whether a country is big or small, the spirit of the  Treaty of Rome means all countries are treated equally around the negotiating table. I believe Ireland is particularly lucky to have a Minister for Agriculture with the negotiating skills of Deputy Deasy. No matter what the odds may be, he will ensure that Irish farming gets the recognition it deserves.
We support the Government's opposition to the super-levy. Anything I or my colleagues say will be in the best interests of our farmers and in the genuine belief that if our economy is to get off its knees we must have a sound and solid agricultural industry. It is very easy for me to support this Bill which provides for the continuation of the guarantee for £90 million for Bord Bainne because it is my contention that Bord Bainne is one of Ireland's success stories and must be supported. Bord Bainne, under severe pressures from time to time, have done a tremendous job. This is recognised by all, certainly by my party. In his speech the Minister supported and commended Bord Bainne. That company cannot be commended often enough.
In my view the Government support can only be regarded as lip service. The Sunday Tribune dated 5 February 1984, had an article headed “Bord Bainne and co-ops hit by Section 84”, written by Des Crowley. It said:
The abolition of tax-based lending in the budget could pose major problems for the co-ops and Bord Bainne, which use Section 84 loans to a greater degree than most other businesses. The abolition of the Section 84 facility could lead to an increase of 5% in the cost of loans from now on.
It may be that the Minister and his two Ministers of State agree that Bord Bainne  have done a tremendous job, but they are not getting support from their colleagues in higher places, or from the real Taoiseach, Deputy Dukes. He is the person from whom the commitment or the congratulations must come. Only by financial support will these commendations be seen for real.
Much play has been made about diversification but there seems to be differences of opinion on the Government side. Deputy E. O'Keeffe would not favour diversification as much as I would, but I believe that some of the answers to our problems lie in the diversification of dairy products. I was interested to hear the Minister support this idea on many occasions. There were many successful projects throughout the country and last week Deputy Walsh of Cork outlined a number of these projects.
In this month's issue of “Co-Op Ireland” I noticed an article headed “Town of Monaghan Co-op launches new range of Irish-made yogurt”. They are to be complimented. I would like to quote from that article which says:
Town of Monaghan Co-op this month announced the introduction of a new range of top-quality dairy products which are being manufactured in a new factory at Coolshannagh, Monaghan by its subsidiary company, TMC Dairy Products Ltd.
Cecil Henderson, Chairman of Town of Monaghan Co-op said “This is the most significant development in the Irish dairy industry for many years. It should be noted that all Mona products are being made in Ireland, from Irish milk, and by Irish labour.
“We intend to establish ourselves as a leading supplier of an extensive range of fresh dairy products to the Irish market. By so doing we will be unique in Ireland and will offer the Irish food  trade and the Irish consumer an Irish-made alternative to the ever growing number of imports in this market.
From that we can see that this can be the answer to some of our problems. Like the Minister and his Ministers of State, I believe grave difficulties are facing us. The initiative taken by the people of Monaghan is a step towards solving our problems. We import a great deal of dairy products and it is obvious that the Irish dairy industry must diversify to take up some of the existing market. That is one argument but another is that many jobs can be created. This is vitally important. That small co-operative in Monaghan created 67 jobs. That is not something to be sneezed at in these very difficult times when we take into account that there are 225,000 unemployed at present.
There has been a yogurt-making plant in County Wexford which has been quite successful. I think Monaghan has followed that lead. There have been many other types of initiatives taken such as that at Waterford Co-operative with their cream liqueur. Despite the amount of strawberry growing in County Wexford the strawberries used for yogurt-making are imported from France. I am asking the Minister to take up this matter with his Department. Since it has been proven over the years that this is a good country for the growing of strawberries the Minister should insist that Irish strawberries, or a particular type of Irish strawberry, be grown which would be suitable for yogurt-making.
Mr. H. Byrne: An Foras Talúntais are in the process of doing so and are making progress. I am asking the Minister to ensure that we get quick results. I know that strawberry importation amounts to approximately 40 per cent only but any imports are costly, particularly bearing in  mind that we have the wherewithal ourselves. I am asking the Minister to have An Foras Talúntais speed up that process and come up with a suitable strawberry within the next year.
From time to time it has been said that our butter is sold abroad, particularly to the Russians, for a very small amount. Yet our old age pensioners, some of whom are on the poverty line, must pay the full amount with possibly the odd pound being subsidised here or there. There is a market for our butter at home. If some of it were given to our old age pensioners at a reduced rate then that would diminish somewhat the butter mountain about which we hear so much. We could not eliminate totally the butter mountain but such a step would be another milestone on the road to eliminating the tremendous surpluses obtaining. I think it was Deputy Joe Walsh who said last week that the idea has got abroad that butter is bad for one. Despite the great work done by An Bord Bainne they do not seem to have been able to change that public perception. I would ask them to take up this aspect more strenuously, reassuring people that, as I believe to be the case, butter is not bad for one. The same might well be done with regard to milk. I understand that there will be an effort in this direction in the bar of Dáil Éireann very shortly which will hopefully encourage more sales of milk in bars henceforth. This type of effort must receive full support. While there are greater markets here for our butter and milk let us go after them in an effort to eliminate the difficulties confronting us.
In regard to the diversification and sales of more dairy produce on the home market I have been very disappointed to learn that in recent times the Minister for Finance, and apparently the Minister for Agriculture, have agreed that the colleges of home economics are to be closed in June next. Those colleges have provided courses for the training of young girls in particular kinds of cheese-making, as well as other courses. I remember the Minister for Agriculture pointing out that in France and other European countries there are cheeses  and wines produced in different town-lands and areas. We have the same opportunity available through the training of young people in the art of cheese-making which they might eventually produce themselves, cheese of a particular brand. For example, I can well see the name “Wexford cheese” taking on were it only given a chance. I appeal to the Minister to request his colleague, the Minister for Finance, to provide £100,000 to keep Ramsgrange College in my constituency open. That college takes on approximately 60 girls annually. From a survey carried out over the past ten years, it has been ascertained that 60 per cent of all girls trained there found their way back to farms. Another important aspect to be borne in mind is that the remaining 40 per cent are all in employment, which speaks well for the type of training these young girls received at Ramsgrange and other such colleges.
I do not know whether the Minister is aware of the vital importance of the farm wife to the family farm unit today. Going on the old adage that two heads are better than one, I can assure him that it is a worth-while combination and one that should and must be supported. From a survey carried out of Wexford farms it was found that where the farm wife had attended a college such as Ramsgrange invariably those farms were the better ones. The Minister will be aware that some farm families put in 100 hours a week and are given little or no recognition therefor.
The tremendous input of the farm wife is about to be reduced or eliminated by this decision to close these colleges. About a fortnight ago a deputation from Wexford met the Minister of State at the Department of Agriculture, Deputy Hegarty, who expressed his dissatisfaction with the proposed closure of these colleges and promised them a meeting with the Minister himself and with the Minister for Finance, a meeting that has not yet been held. In the interests of agriculture, of successful investment in education I am asking the Minister to ensure that that meeting takes place in the very near future. Any viable project should and must be supported in these  times. I believe the Minister's decision to close these colleges is a short-sighted one and the excuse being offered, that the curriculum is outdated, is insufficient. The curriculum may well be outdated in some aspects. However, the Sisters of St. Louis at Ramsgrange have agreed to change the curriculum to suit the Minister's ideas. Even at that, the Minister does not seem to have been satisfied.
For many reasons confidence in Irish agriculture at present is very low, the Minister himself being the cause of some of this. Indeed, some of the Minister's strongest supporters, such as the Farmers' Journal, to date, and the ICOS Magazine — which supported the Minister in earlier times — are beginning to scuttle the ship because they see the situation for what it is. I might quote now from this month's issue of the ICOS Magazine in which, under the heading “Farmer Confidence Further Eroded” it says:
ICOS President John Barry says that the EEC Commission should stop its piecemeal interference with the price support system for dairy products. Following proposals to implement more stringent policy standards for skim milk powder sales to intervention which were discussed in Brussels, Mr. Barry said that these proposals are the latest in a long line of changes which have been proposed or implemented since proposals for rationalising the common agricultural policy were announced in July last year.
The importance of the dairy industry to this country has been spoken of in this House on many occasions, particularly on this Bill. For the record, there are 67,000 milk producers here, with some 10,000 employed in the ancillary industries and some 5,000 in the beef industry, meat factories and so forth. Many more jobs could be created in this sector. Some EEC nations, I understand, have a ratio of one to one. That is the target which we should set ourselves. That would eliminate part of our enormous unemployment problem. The importance of our  dairy industry can be gauged by the value of dairy exports which in 1982 amounted to £374 million — an enormous amount of money. If anything were to affect those exports it would spell disaster. From January 1983 to end October 1983, the value was £350 million. Taking the full years into account, the figures for both years would be more or less the same.
We are very worried about the outcome of the Paris talks. It has been said time and again that our dairy industry have contributed about 4 per cent to the present butter mountain. Our level of production is approximately 700 gallons per cow, but I understand the EEC average is over 1,000 gallons per cow. When we entered the EEC first we were given to understand that the EEC would be a great leveller and would encourage our farmers to produce as much as their European counterparts. There is an obvious discrimination against Irish farmers at present. I dearly wish, as the Minister of State Deputy Connaughton does, that the forthcoming Paris talks will bring about a satisfactory solution.
I assure the Minister that anything we of the Fianna Fáil Party can do to help that to come about, we certainly shall do. We have no desire whatsoever to scuttle the Government or harm them in any way. At the same time, we must let it be known pretty clearly that we are not satisfied with their performance to date. It is my contention that the Minister for Agriculture, aided by the Minister for Finance, brought about the suggestion of the super-levy once again. As every Member knows, the idea of this levy has not just arrived, it has been with us for some years now. The Minister's predecessors have fought off the super-levy in other years, particularly Deputy MacSharry and Deputy Lenihan. The Minister has said in the House that times were not so tough then, but times are always tough when you go to Europe and when all the EEC nations are anxious to ensure the best for themselves. The Minister's weakness has reintroduced the subject of the milk super-levy. This was caused by the complete lack of commitment on the part of the Minister and his Government to our farmers in the dairy industry and  as a whole. In the budget of 1983 you allowed £156 million to be taken out of the agricultural industry and you scuttled the farm modernisation scheme almost in its entirety——
Mr. H. Byrne: ——showing quite clearly that you had little or no commitment to it. It was very shortly after that, early in April, that the idea of the super-levy was put on the table. It is our contention that it should not have travelled beyond that room. It was clearly shown in July that they meant business. You were not taking it seriously at that stage because, immediately after the summer recess, the Taoiseach told me in answer to a question that he did not think it necessary to tour the European capitals to tell the other heads of state of our special position. Yet, just before Christmas, he found out that our advice was correct. Unfortunately, he left it too late.
Mr. H. Byrne: Please forgive me. The Minister has not been addressing the real enemies of this country or of the EEC and does not appreciate the necessity to eliminate this butter mountain. What has caused the butter mountain? Obviously, over-production — we all accept that. However, our over-production can hardly be treated as a crime when Britain are importing 80,000 tonnes of butter each year and when an enormous amount of cereal substitutes is being imported every year into the EEC. Obviously, the cost of milk production on the part of our European counterparts will be far less because of the cheap cereal substitutes. When the Minister goes back to Paris next month I ask him to make an all-out attack on the imports of cereal substitutes  and of New Zealand butter. While I have heard him from time to time speak here in the House about New Zealand butter imports, we do not hear much about that in Europe. He should attack the real enemies and not be as much on the defensive as he appears to be. If you tot up the figures saved by the elimination of New Zealand butter and cereal substitutes you would find that we would be in a relatively comfortable position in which our farmers could continue to produce and increase production without the fear of this disastrous milk levy. That is why the Minister should attack nations who import great numbers of substitute cereals. They are the cause of the terrible problems facing us.
The Farm Modernisation Scheme was scrapped last year and when the Minister reintroduced a very limited modernisation scheme this year the EEC withdrew their support immediately. It was on the Minister's prompting that this happened and I should now like to ask him if the Farm Modernisation Scheme will be continued, even with the measly £26 million allocated to it. I believe that the Government have lost all credibility in Europe and especially among Irish farmers. What is the Minister's policy in relation to the forthcoming Paris talks? What input has the Minister made since Christmas after the failure of the previous talks? Could he outline in detail what steps he has taken since to protect our position in the dairy industry? Have any steps being taken? I do not think so, because Deputy Connaughton told us today of what he would like to see and what he hopes will happen. Pious platitudes or hopes will get us nowhere. We want action.
The Minister had an opportunity of taking action since last Christmas but I very much doubt if he has done anything. Of course, it is very hard for the Minister to try to make a case abroad for Irish farmers when other Government Ministers are scuttling his plans behind his back. What interest have the Government or the Minister shown in farmers in financial trouble? There may be 6,000 or 7,000 in that position at present and in 90 per cent of cases they are classed as good  farmers. In 1976 to 1979 the banks and the ACC had been almost forcing farmers to take finance. They were supported, in turn, by our agricultural advisers who were telling farmers that it was a good idea to invest and borrow. When interest rates rocketed the Government, the banks and the ACC scuttled the farmer and left him holding the baby.
Will the elimination of 6,000 or 7,000 of our best farmers and the enforced sale of their land help the economy? The Minister should address himself to that question as he has just sat idly by while the farmers in financial trouble go deeper and deeper into debt. The ACC give the impression that they are doing their utmost to help farmers and to negotiate with them. This is pure deception. I know farmers in County Wexford who have done their utmost to accommodate the ACC and who have suggested that they are prepared to pay them back over a 15 year period. However, the ACC are moving in receivers behind their backs. The Minister must take this very seriously. Is it a good idea to take land off farmers? Who buys the land in these instances? The banks are putting off sales of farms from day to day but in the end it is the non farmers or bigger farmers who will buy them. Unless drastic measures are taken in this regard it will be disastrous for agriculture.
Land leasing would help the dairy industry if a suitable system was adopted. The Minister of State, Deputy Connaughton, has preached about land leasing. I agree with many of his ideas but, unfortunately, it is still only an idea. What is happening in the meantime? The Land Commission, who have been dealing with the business of taking over land and making it available to the smaller farmers, are not being given any more money, so when land comes on the market they cannot buy it. The big farmer is buying more land. I know of instances in County Wexford where big farmers are becoming bigger and have gone from owning 200 acres to 400 acres. This is caused by Government policies. If the Minister has ideas on land leasing it is no good floating them here unless he is prepared  to allocate money to implement them. The Land Commission have not been as successful as was hoped. Many of their activities are questionable and I can give examples. However, they were serving a purpose——
Mr. H. Byrne: I know you are aware of the problems in agriculture and I am making a case for the small dairy farmer and how he might increase his land holding to increase production. If the Minister for Agriculture and his Minister of State come back with a great deal from Paris there will be scope for an increase in land holdings. Land leasing is a good idea, but it is quite useless without the money to support it. The Minister should immediately start funding the Land Commission until such time as his famous scheme gets off the ground.
The commitment of the Government is and has been questionable. This has been noted by all agricultural commentators. Everybody supported the Government during their first period in office. I was quite surprised that some people well acquainted with agriculture supported them but at this stage they have scuttled them. Last week's edition of the Farmer's Journal reports that 2.3p per gallon is to be slashed from the price of milk and they lay the blame on the Minister and the Department of Agriculture.
The Minister of State says that there are answers to our difficulties. I do not share his optimism but we would all be delighted if he could put that optimism into action. We support the complete negation of the milk levy. Anything less would be disastrous. Now is the time for the Government to work on this matter. They must not wait until the Paris talks but must draw up a programme of action and follow it diligently. This may enable us to escape the disastrous effects which would follow the introduction of the milk levy.
Bord Bainne have taken on a tremendous task and have done great work over a number of years. They have undoubtedly  been very successful and are probably the greatest success story in Irish marketing.
Mr. Farrelly: I welcome the opportunity to speak on this Bill. I congratulate Bord Bainne on their excellent work for the dairy industry in the promotion of dairy products in Europe and elsewhere. Agencies such as Bord Bainne, CBF, CTT and the Pigs and Bacon Commission are selling different Irish products and all these agencies are doing an excellent job. I believe that in 1984 they should be united under one flag. This would ensure better results for the producer than can be achieved while they operate individually and would probably give a better return for money.
Bord Bainne have done an excellent job and their work has contributed to the fact that less than 1 per cent of our dairy produce is in intervention. We are causing less than 1 per cent of the dairy mountain about which all the argument is taking place. There are areas where Bord Bainne could become more deeply involved. They have introduced milk flavours in a small way but there is wide scope for this product. I had the opportunity a few years ago to visit the United States and every second advertisement on television was related to milk flavours. We should think seriously about developing this aspect of the dairy industry.
Successive Governments have failed disastrously in regard to food processing, though they have paid lip service to it. Only recently has there been any real progress in helping co-operatives and individuals to set up a proper food processing industry which can produce products acceptable to the Irish housewife. If this had been done in the mid-sixties we would have no problem in competing with our European counterparts. We now find ourselves competing even in regard to the potato. Growers have been receiving very poor prices. One year in every four is excellent but the other three years are a disaster. I must emphasise the work of the Minister of State at the Department of Agriculture, Deputy Hegarty, by——
Mr. Farrelly: I must make reference to some of the points made by Opposition colleagues. In discussing this Bill many Deputies have referred to the period from 1976 to 1979. I was one of the people at that time who took the initiative that all the politicians in this House and throughout Europe were talking about, to develop and increase output to help the economy. We did that with the assumption that Bord Bainne would be available to help sell our products and on the assumption that we would be able to borrow money at about 12 per cent. A large percentage of the 7,000 farmers who are in financial difficulties at this time did likewise to ensure that they could provide a better living for their families and increase their overall output. The value of exports in the dairying industry in 1983 was £735 million, which is approximately 12 per cent of the total exports for that year. At that time we did not realise that we would have a Government who would help to increase inflation and interest rates to the tune of 20 per cent and 22 per cent, which nobody  in any industry could afford to pay. This gets us back to the real problem of where the decline in agriculture was and the reason so many farmers have got into financial difficulties.
I could not let this opportunity pass without referring to some of the points which were thrown across the House today about the Government running away in regard to their commitment to agriculture. At the time I am talking about we had a Government who presided over a decrease in family farm incomes by 52 per cent in three years. This, as well as a high inflation rate and high interest rates, is the root cause of the problems we have today. There is a very good case to be made by our Ministers in relation to the financial problems those people have today. While I am totally against putting receivers into any of those farms I must say that where co-operation has not taken place those people have not any other option. If there are people doing their utmost to make a living on family farms and make their repayments but because of high interest rates over years of high inflation they are unable to repay they should be listened to. I hope something can be done to increase the number of years they are allowed in which to make their repayments and also do away with some of the increased interest rates charged by the financial institutions over the last few years. With regard to Bord Bainne helping different co-ops, Deputy Wilson will be able to verify that Monaghan and Virginia have been mentioned. We could not let this opportunity pass without mentioning Bailieborough.
Mr. Farrelly: Killeshandra is a little nearer to the Deputy than it is to me. Those co-ops have done great work in relation to food processing, having our raw products processed and left on the shelves for our consumers. Over the years we have fallen down in that area. The farmers and the co-ops cannot be blamed for this. We must blame the Governments who were in power over  the last 15 years. Now, when there is a problem in Europe and when there are mountains of butter and milk products, we realise that this is where we could have done something constructive to get those products available for sale within the EEC and outside it. We have gone a little way in the last few years because of the increased incentives which co-operatives have because they are nearly all farm-owned. Those people have done a wonderful job. I am delighted the Government have shown the initiative to help those co-ops along the way. I hope help will be provided in the areas where it is still required.
Mention was made earlier about the development of the increased amount of land which will be made available to small farmers by the Land Commission in order to help them increase their output. We know that in the last five years the land made available by the Land Commission was so dear that the small farmers who were being helped out were unable to make the repayments. I welcome the introduction of the land leasing system by the Minister of State, Deputy Connaughton. I was interested to hear one of the Opposition speakers referring to this as the phoney scheme of the Minister and say that when it was introduced it would not be sufficient. At least it is going some way towards getting land for young farmers. It is going much further than the Opposition junior Ministers did during any period of the long time their Governments were in office.
I believe the most serious problem facing all of us, whether we are in farming or in industry, is the proposal coming from Brussels about the introduction of a super-levy. I do not believe what some of the speakers have said about the Minister for Agriculture or the Taoiseach not having made the other Ministers for Agriculture aware that we were totally against this proposal. It is not very helpful for anybody to come into the House and say that the Ministers pre-empted the proposal for a super-levy in Europe. We are all aware that there was a proposal before the different Ministers for Agriculture over the last five years to do something about the inevitable high proportions  of dairy products which would be in Europe in a few years time if something was not done. We have the use of the green £ to help our farmers in regard to devaluation but it is not right to say that other Ministers ensured a good deal for us.
D-Day has come and it is essential that we beat this super-levy proposal. It is our major partners in Europe, the Germans, Dutch and British, who have caused it. Britain has been importing 90,000 tonnes of New Zealand butter and the Dutch and the Germans have been using cereal substitutes for their factory farm systems. Our milk production is only 700 gallons per cow compared with 1,300 gallons in Europe.
We have got to ensure that this super-levy will not be imposed. Three or four years ago, when the problem was comparatively remote, we said that if the problem was not tackled then we would have this dilemma. In those days the Government took the easy way of putting off consideration of it and letting somebody else try to solve it. That is what the party opposite did when they were on the job. The Ministers for Agriculture and Foreign Affairs, and the Taoiseach, must be complimented on the efforts they have been making. We did not threaten the veto, but I have been in business and in politics for a while——
Mr. Farrelly: I have been around a little while and I know that you do not show on day one what you will do on day nine. The Government have done a good job in this respect despite the disbelief of the Opposition that they would. I welcome the opportunity to speak on the Bill. I suggest that soon the agencies working in this field should be amalgamated to give Ireland better representation in the market places of Europe and further afield.
I compliment An Bord Bainne on the work they have done, but they have a lot to do. All parties here should have a firm commitment to our food processing industry because it has great potential for  job creation. An Bord Bainne should see that all consumer goods on the Irish market will be manufactured at home instead of being exported and imported later in English and European packets.
We have been accused of introducing levies in the last 12 months but despite this allegation Irish farmers have had the best year since 1978. They have benefited from the reduction in inflation for which this Government are responsible, and consequently their real incomes have been improved. I wish to remind the House that a few years ago the Government imposed a 2 per cent resource tax on farmers, who suffered a 52 per cent reduction in incomes in a three year period. That is when the damage was done, and we know who presided over our affairs at that time.
I hope An Bord Bainne will continue their excellent work, but I repeat that there should be amalgamation of all the agencies selling our produce wherever they can find markets. It has been said that Governments here have hindered these agencies. It is time for us to get out into world markets to sell our processed food products and to give ourselves a proper structure at the end of the day.
Mr. Wilson: I welcome the Bill which is framed to guarantee the continuance of the State guarantee for Bord Bainne borrowing. Anent what Deputy Farrelly said, that it is appropriate to compliment An Bord Bainne who have not had to call on their full borrowing authority, the Minister has told us that from the time An Bord Bainne were set up they have not had to call on Government money.
Deputy Farrelly suggested that we should get all of these agencies together. That looks to be a rational suggestion but it should be pointed out that An Bord Bainne are practically unique because they have not been running to the Government for money. Indeed I would be dubious about whether the Government, under EEC regulations, would be allowed to give them money.
I emphasise, with my fellow Opposition Members and Government speakers, how important it is to resist the  imposition of what has come to be called the super-levy. I had discussions with the leaders of the co-operatives Deputy Farrelly mentioned in my own area, namely, Bailieborough, Killeshandra and Virginia. Lough Egish, Monaghan, are also in my constituency. They are convinced — they do not say this for propaganda reasons — that the industry would be beheaded by the imposition of this levy in its original form or in any modified form. I should like the Minister of State to confirm that the average gallonage in Europe is 1,050 or 1,075. Deputy Farrelly said it was 1,300 but I do not think it is that high. In my area there is an average gallonage of 800. We had been making progress towards achieving the European level of production. Not only would this movement be stopped in its tracks but the production we had was to be cut back.
In general the Minister for Agriculture understands the importance of the super-levy. I would not be surprised if the Government or his colleagues were not as convinced nor am I sure that other people in Government have exercised the muscle they had at the various councils to try to fight this at European level. It does not merely affect agriculture. The Taoiseach has a responsibility as Taoiseach. The Minister for Labour is also seriously involved from the point of view of employment arising directly from the milk industry. The Ministers for Industry, Trade, Commerce and Tourism are equally involved. For that reason it is undesirable that Ministers should fight their own corner and leave the Minister for Agriculture on his own to fight this very serious attempt to curb production.
I cannot help thinking that the new standards imposed for skimmed milk powder is another European device to cut production. They demand less moisture and less acidity. Have the Commission in the past marketed skimmed milk powder with a good conscience when it contained too much moisture and acidity? Will they tell the people who are asked to purchase the skimmed milk powder which is stock-piled in intervention that there is too much moisture and  acidity in it? It smells to me of sophistry. It seems to be a gimmick to cut down on production.
Commentators on the milk scene have stressed time and again the importance of research and development. It is a truism that research and development in all facets of industry and of agriculture are of paramount importance. Today I was speaking to someone who told me there may be some difficulties in marketing but one of the successes of the marriage of the results of research and development in the dairy industry has been the cheese which was developed for export to Greece, Crete and the Middle East. The Dairy Science Faculty in University College, Cork, was asked to examine chemically and bacterically the cheese that sold well in that market. They did an excellent job. They linked up with the co-operative that produced the cheese. I was very pleased to see in the huge cruciform market in Kania Irish cheese on sale with a Greek label. I understand there may be some marketing difficulties in this regard. Here we had market research and scientific application. Close attention was paid to what the customer wanted to buy. All the information was used in the creamery to produce this cheese. I could not buy any of the cheese in Greece because they would only sell a huge cartwheel of it. When I came home I had an opportunity to taste it. It is not exactly our taste in cheese but — this may sound like a commercial — it is well worth tasting. I mention that because it is an example of how scientific research can be applied and market research and production interwoven to produce something worthwhile. I discussed it afterwards with our Ambassador in Athens. It is important to realise that, if there is an argument about importation now that Greece is a member of the EEC, we contribute substantially to the Greek economy. Thousands of people go on holiday to Greece. We have a quid for their drachma.
In guaranteeing the loans for Bord Bainne, due to the peculiar system we have we are also involved in beef production. For that reason Deputy Farrelly was relevant when he discussed the processing  of our agricultural produce and how important it was for the future. Thanks to a man who at the time did not know the business end of a cow from the other end, Mr. Tony O'Reilly, we had a remarkable success in marketing Kerrygold butter. It is a household name in many areas. Along the coast of the Mediterranean and in the Canaries one can get salted or unsalted Kerrygold butter but one will look in vain for tins of beef from this country. We produce great meat. We kill early. I remember a former head of Siemens-Schukert, the electrical engineering firm, telling me we did not know how lucky we were to have the meat we have. He told me that when he came out of his office he could buy a steak, take it home and cook it in less than ten minutes. He said he would have to beat the meat in Germany around the kitchen before he could do that. Why we cannot process our excellent beef and lamb and sell it as the Germans, the Dutch, the Danes and the French do, I do not know. If one searches on a supermarket shelf in any of these countries where tourists have been crowding for the past number of years, one will look in vain for an Irish product so that Deputy Farrelly was touching on something that I feel very strongly about. I shall not continue on that line since it is specifically the Bord Báinne guarantee we are dealing with here but the area I am talking of is one that requires research and development and hard application on the ground. I hope that we will see more action in that regard in the future.
If we take forestry, for instance, something I regard as one of the school heresys, we find that there is no processing of our timber but likewise there are serious questions in the whole area of the processing of food. Erin Foods made an effort in this direction but were not successful. However, that is another story. So far as diversification is concerned, the people involved in dairying have addressed themselves to this question. If manufacturing industry had achieved the percentage increase in production that our farmers have achieved we would read about it in every magazine and newspaper. This House should be prepared to commend  our farmers on the magnificent increase in production they have achieved in a very short period. I might add that in a recent assessment of productivity my area came second to south-west Cork. Farmers in general have shown the way in increased production and they have done so to an extent that we have not commended them properly for.
In my constituency Virginia Milk Products are involved in the production of Bailey's Irish Cream. I do not have an up-to-date statistic but I understand that approximately 35 million gallons of milk are processed for that production alone. It has been a wonderful commercial success. Developing also under the aegis of the Bailieborough Co-Operative is Emmets Liquor Cream. A large extension has been made to the factory there and exports of the cream are very high. These are not the only cream liqueurs on the market but they are the only ones I intend mentioning since they are produced in my constituency.
All the prestigious journals in the world —Paris-March, Der Stern, Time and so on — are carrying advertisements for those creams and in particular for Bailey's which was the first on the market. It is very important for our dairying industry that we have that kind of demand for those products in so many countries. This is the most successful diversification of products in recent years. The quality is rated very highly so one hopes that the standard will be maintained. I know that it will be maintained in the case of the two I have mentioned and I have no reason for not believing that the other people involved in the same type of product will not also maintain these standards. However, as is the case sometimes with Hollywood film successes, three or four versions are made subsequently, one worse than the other and all spoiling the original worthwhile production. This sort of situation has developed in relation to the export of lamb and so on. Marketing and market research are very important in terms of the export of any product.
A number of people have mentioned New Zealand exports. Long before this question became so acute, I had the  opportunity of talking for a long time with the Minister for Agriculture in New Zealand. He could not see any logic in our position on the question of imports from that country. Anyone who has examined the Articles of the Treaty of Rome will realise that long ago UK imports of New Zealand butter should have been stopped. That is the iron logic of the Treaty of Rome. Admittedly when bargains are being made many factors have to be taken into consideration and the UK has a market in New Zealand for some of its products. Consequently, the UK is gaining something apart from the old Commonwealth idea. Sometimes in the market place the whole grá-mo-chroí attitude dies a sudden death but in this case Britain gains considerably from its importation by having a market in New Zealand for its own products. An ex parte advantage to one member of the Community is a situation which is not desirable. As of now the importation to the UK of New Zealand butter and lamb is affecting us very badly. Even pro tem we should say that there should be some advantage not only to one member state but to others, particularly the weakest, in any such situation.
We on this side of the House are adopting a very strong position with regard to imports from New Zealand. I understood — and the Minister may correct me if I am wrong — that the late seventies were to be the deadline for permission to import from New Zealand but the UK with New Zealand have succeeded in having that deadline extended. For one reason or another the EEC collectively have not invoked the guillotine. However, they intend doing so in respect of this country and in terms of an industry that is vital to our economy. I refer to the super-levy. Therefore, there are double standards being applied: the letter of the Treaty of Rome is adhered to in some instances but not in others. In this case we should fight to the death rather than have the super-levy imposed on us. We have strong moral grounds for doing so.
To buttress that I wish to refer to the section 84 ban which is envisaged as costing producers a half penny per gallon on  milk. Together with the intervention delay which will cost them 2p per gallon, and the various levies which will cost them 5p per gallon, one is talking of 8p per gallon and that would be a very serious situation.
In my area there is constant talk in the context of another but allied fear, that is, the question of the MCA's. There is a whole area that needs revolutionary action in so far as monetary systems are concerned. I have spoken already in another place and in this House, too, about the unsatisfactory state of international exchange. I will not go into that now. The UK did not join the EMS but I think that was a great mistake on their part and it was detrimental also to the EMS as a whole. I will not go further than that. It is imperative that order be brought into the monetary system with regard to the marketing of all produce but particularly the produce of the dairying industry.
There were arguments by some of those who were importing cereal substitutes in Europe — speakers from both sides of the House mentioned this as the big problem in relation to factory farms — that they were buying cereal substitutes at least in part from under-developed Third World countries. That was specifically in relation to one cereal substitute. Subject to substantive denial, I say that the people who were advancing the argument that they were helping poorer, Third World countries by these imports were involved in the big business of producing cereal substitutes and importing them. I do not want to expand further on that but there is a slight immorality in that if that is the case.
The Minister also has a problem directly related to the milk industry with regard to calf premiums. There is a proposal to abolish them but as far as we are concerned that will have to be fought with persistence.
Some time ago The Economist made a survey of the butter industry. They were not talking about commercial butter purchase and usage but they indicated that if one day's consumption of butter in the ten countries of the EEC were destroyed by fire the total butter mountain would  disappear. I do not know if this is true now but when The Economist made the survey some time ago that was the case. The butter mountain cannot be all that big even now. The question of factory farming and cereal substitute imports will have to be hammered out at EEC level. In the proposal there was a 4½ per cent impost on large factory farms but that is not sufficient for our purposes.
With regard to the farm modernisation scheme, the Minister made a grave mistake on 9 February when he decided to suspend the scheme. In the context of my constituency, farm modernisation means modernisation for dairy production and that is relevant to the Bill before the House. People, including myself, have referred in this House to what I regard as the immorality of that decision on 9 February. It was an immoral action on the part of the Minister to cancel that scheme without warning. Throughout the country many farmers, particularly small farmers who were ambitious to improve their holdings and the production and the quality of their farms, had been working on schemes under the guidance of agricultural advisers throughout the winter of 1982 and up to the time the Minister spoke about the scheme. They were convinced that the scheme would continue and they accepted the advice of the agents of the Minister. I put it to the House that if those people came together, instructed counsel and sued the Minister, because his instructors and advisers were acting as his agent, they would win a case in any court. I would advocate and advise them to do so. Farmers expended considerable sums on the small dairy farms in County Cavan on the advice of instructors. They did not know the Minister was going to pull the carpet from under the feet of the instructors. The Minister and his Ministers of State should face up to this. If they do not I hope the farmers will join together, take a case to court and see to it that they are paid for schemes upon which they had embarked under the guidance of agricultural advisers. I do not think any judge could hold otherwise than that the advisers were acting as agents for the Minister.
I am glad the Town of Monaghan Co-operative  announced recently a scheme for the production of yoghourt and various flavoured milks. In the context of a small town this will provide substantial employment in the future. For a while I had great hopes butter oil would be a profitable substitute for butter. The Minister and his Minister of State, our spokesman for agriculture and I have mentioned that diversification is important. However, from consultation with managers of co-operatives I am afraid that butter oil, which held out such great prospects, is not now so regarded. We had a market in Mexico but the Mexicans had serious financial problems in the recent past and that may be one reason why the market that was established there has died. Another reason may be what the Minister referred to in his opening speech, namely, that the United States is under-cutting dairy products in Mexico and in other places. That is a problem that has to be faced but it is one about which we can do little on a national level.
Deputy Walsh mentioned the importance for the dairying industry of promoting early calving and he gave the House some statistics. He mentioned the figure of 25 per cent on 1 April and if one could bring that back to 1 February it would mean substantial gains for the dairying industry. We can rely on the agricultural advisory service — both that for which the Minister is responsible and the very important educational service being provided by individual co-operatives — to concentrate on this matter. However, it all hinges on not being shackled or inhibited by this crazy idea of blocking development in the most under-developed dairying area in the EEC.
I would like to say a word of praise for the agricultural advisory and educational service. Nowadays it has become almost a tradition to knock various professions, to be cynical about large fees for court appearances and so on, but I do not think anybody could criticise the commitment, the almost missionary zeal, of the majority of those involved in agricultural education almost since the war. It would be to our advantage if we could find out who  instilled this into them because it is the purest form of practical patriotism and the results on the ground have been remarkable, particularly with regard to increased productivity.
In my area special newsletters are sent out by the agricultural advisers to the co-operatives, and I am sure it is the same in other areas. The gradual spread of ideas by this means has incalculable benefit for the farming community. The fact that these advisers make themselves personally available to the farmer to give advice so that the written word in the education sheet is matched to the personality of the person who produces it is one of the great efforts in education. They are doing for agriculture almost the same as the múinteoirí taistil did for the Irish language at the beginning of this century, and they show the same kind of commitment and love of their job.
Mention has been made in this debate of assessing milk not merely for its butter fat content but for its protein and lactose content. Many years ago I put down a question to the then Minister for Agriculture, Mr. Clinton, about the possibility of assessing protein for the payment of farmers. He was very sharp with me; it was not his usual form. He more or less indicated that he knew nothing about protein and neither did I. I do not think that was a fair remark and I said so to him. He was a fair-minded man. I see that now payment for protein content is under way in some areas, in some progressive co-operatives. The idea that people should be paid on gallonage alone is one I would be a little chary of because it would take the concentration away from the production of quality milk and that might be dangerous.
I am glad people have interested themselves in the IDA's role with regard to milk and milk products. I cannot understand how this did not happen long ago. Over the years the IDA have garnered considerable expertise. Because our agricultural industry is so important and we have the raw material for the development of processed food, the IDA should be encouraged to take action as soon as possible.
 Some time ago I was asked by the then Minister for Agriculture to speak at a Bord Bainne function honouring some of the founder members. I made a reference to the butter and health link. In an increasingly urbanised society this has caused people to be scared of butter. The simple fact is that people who take enough exercise or who work physically very hard have nothing to fear from a love of butter. It is in the sedentary occupations that experts say damage may be done, but there is a very easy remedy. People should be encouraged to develop physical fitness and at the same time use the natural food of the country. The marketing people have missed an opportunity of linking healthy wholesome butter to the campaign under way in most countries for more physical exercise and fitness. This would in some way counteract a certain amount of propaganda of dubious merit from the manufacturers of butter substitutes who have been praising their own products with regard to calories, fitness, health and so on.
There is serious worry about farm modernisation which in my area is a dairying problem because the whole area is committed to dairying. I would like to reiterate what our spokesman, Deputy Noonan, said with regard to the fight re the super-levy, calf premiums and so on. We totally support him. We are critical that the Minister has not gone in fighting as hard as we think he should have. I am dubious about the support he gets in Government and I have mentioned specific Ministers who have a direct involvement in this. I mentioned Labour, because there is a high employment content here, and Trade, Commerce and Industry. We are appealing to the Government collectively and individually to hammer this point home as far as the as not yet fully developed dairy industry here is concerned. When we reach the level of development of other members of the EEC, we will not be making any béal bocht.
I want to reiterate the importance this House should attach to the information that Bord Bainne did not have to call on the Government for any money and to voice our admiration for them and hope  that will continue because there has been a tendency to do what the Americans call the laid back act, that is, have the Government pick up the chit later and the company does not have to make any effort. Bord Bainne and the dairying industry deserve our praise in this regard.
I am in full support of this Bill. I hope that the points made in the course of this debate will be taken in the right spirit by the Minister as an indication of how committed all sides of the House are to the potentiality for development in the dairying industry remaining with us.
Mr. Sheehan: Representing a dairying constituency, South-West Cork, I congratulate the Minister on his foresight, wisdom, courage and capability in extending the provisions of the Dairy Produce (Miscellaneous Provisions) Act of 1973 which will safeguard the future of An Bord Bainne until 1990. As we are all aware, An Bord Bainne have played a most important role in the development of our agricultural industry. Whenever I travel abroad it is a great source of pride to me to see their products being marketed perhaps more predominantly than any of their counterparts in Europe. The board are due a considerable amount of praise in this respect because they have got Irish milk products into valuable outlets in countries other than those in Europe, places like the Canary Islands and the Far East. Anywhere one wishes to go one will find their products taking pride of place.
It must be remembered that competition, especially from the USA and New Zealand, is very keen and we must become more efficient if we are to maintain our place on international markets. There is an ever-growing need for diversity of dairy products. This is a must if we are to succeed. We have seen the impact of that dynamic Beare Island man, Bernie Cahill, on our agricultural industry. I refer to the managing director of Carbery Milk Products in Ballineen, who has made this produce immensely popular worldwide. His break-through there in the conversion of whey into alcohol, resulting in a superior cream liqueur, has vast potential on international markets.  The USA have called on his expertise and the New Zealanders were quick to seek his advice also. It is men of his courage and capability we need today in this country and in western Europe generally. We are especially dependent on the expansion of our greatest industry, dairying.
Agriculture is the cornerstone of our economy. I congratulate the Minister for Agriculture in having created this new group of four Ministers of State, giving more impetus to the marketing of our agricultural produce. This is a step in the right direction, relieving our hard-pressed Minister, who works day and night for the promotion of our agricultural industry. I feel certain this new group will play their part in helping him out in a very difficult situation.
There is also vast potential for our bacon produce. There is demand for a special type of ham that could quite easily be produced here for southern European outlets, in places like Spain, the Mediterranean Islands and in Italy in particular. I believe there is a lucrative market for our bacon produce in the USA also. Anybody travelling through the major cities of the United States will have found that their bacon products are not as good a quality as ours. We need to do a “Tony O'Reilly” on “Bord Bainne” exercise on our bacon industry which will then flourish in world markets. The quality of our rashers and sausages is second to none. All that is needed is aid, encouragement, greater dedication and more drive on the part of the people responsible for marketing our agricultural produce to make our bacon products as successful as have been our milk products. There must also be a market for Irish veal products, another on which we failed to capitalise or impress on foreign markets. I have no doubt that the quality of our veal is better than a lot served in high-class European restaurants today. There is scope for the improvement of our veal exports also.
It is well known that today we skim the surface only so far as sheep production is concerned. Coming from a mountainous terrain in south-west Cork I know only too well what could be done to improve  the sheep population in that area. It is a well known fact that our mountain ranges, from Donegal to West Cork, are denuded of fertiliser and lime and that, if we are to improve the quality of our sheep production, we must begin at source, that is, the improvement of the fertility of mountain pasture. In this day and age surely it is not impracticable to have those mountain ranges treated with lime and fertiliser? That would improve the stocking capacity of the mountains and benefit that very considerable asset of the nation, the sheep industry.
Commonages work against the advancement of this industry. The day will soon come when they will have to be divided, even if only from the animal health point of view. There is a growing need to have these commonages divided as quickly as possible. If every farmer in the west and along the western seaboard could have this mountain commonage divided, he could there and then get his land fenced and do his best to bring back the fertility of the mountain soil. In the lowland areas of the west commonages are also a curse to farming. The sooner the Minister of State, Deputy Connaughton, tackles that problem, the better for our agriculture. It is well known that our sheep industry has been treated as the Cinderella of the agricultural sector. I appeal to the Minister to devote as much attention as is possible towards improving that industry.
On my journey from my home in south-west Cork to Dublin, I travel through the greater part of the country during an almost five hour trip by car. When I leave Cork city and strike the plains of Kildare coming near Dublin, I can see a vast amount of land under-utilised. If that were in south-west Cork, south Kerry, west Galway, west Donegal or west Clare, I guarantee that it would be utilised. In those areas, for generations the small farmers played an important role in the development of our agriculture, eking out an existence, winning back land by reclamation. In the fertile plains of the midlands, hundreds of thousands of acres could produce more. One-third of our agricultural land is lying  dormant, completely unproductive. Our future agricultural plans must incorporate that potential acreage in full production. It would thus play the part in our economy which it is not playing at present because it is certainly not stocked to capacity. It is not paying to the Irish Exchequer what it should be paying.
I listened last week to the chief Opposition speaker, Deputy Noonan, criticising our Minister for not tackling the agricultural problems. What other Ministers had the guts to tackle the agricultural problems in the way that the Fine Gael Ministers have since the foundation of the State? Was it not Paddy Hogan who thought up the slogan “One more cow, one more sow and one more acre under the plough”? That slogan swept the headlines in the early days of the State. Was it not Jimmy Dillon who, as Minister for Agriculture with the first Coalition Government, had the lime lorries rolling into the Irish fields which had been starved of lime and fertilisers until he took over? Was it not Mark Clinton who piloted this country into the EEC? Was it not he who brought off the greatest deal which Irish farmers have enjoyed in the past decade?
Mr. Sheehan: Was it not Alan Dukes who, when Minister for Agriculture, gave the stimulus to Irish agriculture? Today, it is Fine Gael's Austin Deasy on whose shoulders this mantle is falling to pilot Irish farmers through one of the most serious difficulties — the milk super-levy.
I say to all my friends on the opposite side of the House that instead of trying to earn political kudos they should be standing behind our Minister and giving him every possible encouragement to  help him to bring back the best possible deal for our dairy industry. That is what I would expect from my friends in the Opposition.
Fine Gael as a party have always stood behind the farmers since the foundation of the State and now do so as the major party in this Coalition Government. They have played their part in formulating successful agricultural policies. I have no doubt that if given the chance they will play their part now in these difficult times.
One of the Opposition speakers said that more milk should be drunk locally and I agreed with him. Our GAA, golf and other sports clubs, some with their recently installed luxurious lounge bars, should make milk bars available to their patrons. That would be a big help towards reducing the surplus stock of milk produced here. Ireland has been impeded from raising its milk yields to EEC standards. Among the serious impediments to the development of our agricultural industry is, firstly, that 23 per cent of our farmers are over 65 years of age, as compared with 7.6 per cent in The Netherlands. Until such time as our young farmers have the chance to play their part in the development of agriculture, the future will not be as bright as it should be.
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