Committee Reports > List of Committees > Dáil > 1962 > Committee of Public Accounts > Report - Appropriation Accounts 1960 - 1961

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 22 Márta, 1962.

Thursday, 22nd March, 1962.

The Committee sat at 11 a.m.

DEPUTY JONES in the chair.

Liam Ó Cadhla (An tArd-Reachtaire Cuntas agus Ciste), Mr. J. F. Harman and Miss M. A. Keily (An Roinn Airgeadais) called and examined.

VOTE 48—TRANSPORT AND POWER.

Miss T. J. Beere called and examined.

205. Chairman.—Miss Beere has come here this morning to assist us in our examination of the Vote for Transport and Power. Paragraph 74 of the Report of the Comptroller and Auditor General reads:—

“Córas Iompair Eireann.

Subhead F.2.—Redundancy Compensation.

74. Section 15 of the Transport Act, 1958 authorises the payment of grants from voted moneys to the Board of Córas Iompair Éireann to meet the cost of compensation paid by the Board to employees, including those of the former Great Northern Railway Board, whose services are dispensed with or conditions worsened under certain circumstances in the five-year period from 16 July, 1958. Including £245,533 charged to the subhead the grants issued to the Board under this section amounted to £390,229 at 31 March, 1961. Certificates furnished by the auditors of the Board’s accounts of the amount expended on compensation to that date have been made available to me.”

Have you anything to add to that, Mr. Ó Cadhla?

Mr. Ó Cadhla.—No. It is merely for information.

206. Chairman.—Paragraph 75 of the Report of the Comptroller and Auditor General reads:—

“Airports.

Subhead H.2.—Constructional Works including Furnishing of Buildings— Shannon Airport.

Subhead H.3.—Constructional Works including Furnishing of Buildings— Dublin Airport.

Subhead H.4.—Constructional Works including Furnishing of Buildings— Cork Airport.

75. Expenditure during the year on constructional works, including furnishing of buildings at Shannon, Dublin and Cork Airports amounted to £438,529, £242,680 and £342,237, respectively. The total expenditure to 31 March, 1961, excluding the cost of acquisition of land, amounted to £3,657,011 for Shannon Airport, £1,943,712 for Dublin Airport and £358,639 for Cork Airport. In addition to the sums expended from public moneys at Dublin Airport Aer Rianta Teoranta expended £265,224 on the construction of a hangar for jet aircraft. This work was financed from borrowings from sources other than the Exchequer.”

207. Deputy Kenny.—I should like some clarification of the final sentence of the paragraph which reads: “This work was financed from borrowings from sources other than the Exchequer.” What were those sources?—This is a hangar that was built by Aer Rianta with money borrowed from the Ulster Bank.

Chairman.—Aer Rianta operates Dublin Airport as agents of the Minister? What is the position of the Minister in regard to ownership of this hangar for jet aircraft?—It is vested in the Minister.

Solely?—Yes, and repayments will be made by hiring out the use of the hangar to the air company.

This project is a departure from the usual practice—borrowing money instead of voting it?—The reason was that the hangar was required urgently. There was a shortage of technical staff in the Department for the work in hand. With the staff we had we could not have finished it in the very short time we had to do it. That is why we departed from the usual procedure.

208. Chairman.—Paragraph 76 of the Report of the Comptroller and Auditor General reads:—

“Operation of Shannon and Dublin Airports.

76. I have been furnished with statements giving particulars of the cost of operating Shannon and Dublin Airports. Shannon Airport is managed directly by the Department and Dublin Airport is managed by Aer Rianta, Teoranta, on behalf of the Department.

The expenses and receipts under their main heads are as follows (the figures for the previous year being shown in brackets):—

I notice that—at Shannon—the catering, etc. receipts have dropped from £189,583 in 1958-59 to £87,236. What is the explanation for that?—There is an easy explanation for that. The catering services included catering sales to planes that came in and stopped. The transit passengers had a meal and bought things. Now with jet aircraft many are not stopping at the airport, or are coming in the mornings, or flying over, and there is not the same demand. Also, the piston engined aircraft used to stop and take on meals. I am glad to say that catering receipts are improving again.

Deputy Belton.—Have you found that catering receipts have improved recently by the catering establishment at Dublin Airport competing against private enterprise?—Dublin Airport as compared with Shannon?

Catering in general?—That is a matter of opinion, I think.

Deputy Belton.—People in private enterprise are very perturbed about the catering activities at Dublin Airport.

209. Chairman.—That is a question of policy which will have to be addressed to the Minister. We cannot expect Miss Beere to give an explanation for that. Paragraph 77 of the Report of the Comptroller and Auditor General reads:—

“Subhead I.4.—Shannon Free Airport Development Company, Limited (Grant-in-Aid).

77. Grants under section 8 (1) of the Shannon Free Airport Development Company Limited Act, 1959 to the company, including £177,500 charged to the subhead, amounted to £367,500 at 31 March 1961. Section 8 (2) of the Act limits the aggregate amount of grants which may be made to the company to £500,000.

The aggregate amount which the Minister for Finance may subscribe for shares is limited by section 2 of the Act to one and a half million pounds. Under section 3, £1,168,000, including £775,000 in the year under review, was advanced from the Central Fund to enable the Minister to take up shares in the company.”

Is the Shannon Free Airport Development Company making profits now?— They are getting in some rents but I would not say profits, yet.

210. Chairman.—Paragraph 78 of the Report of the Comptroller and Auditor General reads:—

“Subhead Q.—Appropriations in Aid.

78. A grant of £35,000 was allocated from the American Grant Counterpart Special Account towards the cost of establishing a development and research unit by Córas Iompair Éireann. Expenditure during the year amounting to £9,784 was charged to subhead M— Technical Assistance and recoupment from the Special Account has been brought to credit as an appropriation in aid.”

Deputy Booth.—The paragraph refers to the cost of establishing a development and research unit by Córas Iompair Éireann. Could we know how that is progressing? There is a grant of £35,000, but only £9,784 was required in the year under review?—That is progressing very well and the full grant has now been paid. I was told by the Chairman of Córas Iompair Éireann that the difficulty was in getting the suitably highly-qualified staff he required. That was the delay in getting started. The grant is for pilot schemes and for special equipment for use in this type of technical work.

Is it for computers?—No; it is for special technical work on questions like the mechanisation of beet handling, and better and cheaper ways of maintaining the permanent way—work of that type which is technical and experimental.

211. Chairman.—Paragraph 79 of the Report of the Comptroller and Auditor General reads:—

“79. The account of the management of Dublin Airport by Aer Rianta Teoranta for the year ended 31 March 1960 showed a surplus of £82,318. After charging £32,776 for interest payable to British European Airways, the deficit on the company’s General Administration Account amounted to £35,856. Provision had been made in the estimate to set off this deficit against the management surplus. The balance, £46,462, was surrendered to the Department and has been brought to account as an appropriation in aid.”

Deputy Booth.—In that paragraph there is a reference to a surplus in the account of the management of Dublin Airport of £82,318, but paragraph 76 shows a deficiency of £229,159?—That is just on management and it does not take account of any provision for depreciation or interest, or for air navigation services. If you look at the table on the preceding page you will see that air navigation services cost £122,932 and interest and depreciation cost £210,081. This is purely a management account.

We are taking only the figure of £232,853?—You take out the other figures.

212. Is it not somewhat illusory to refer to a surplus of £82,318. This is a matter which has aroused comment before. References are made to a surplus which, in the ordinary commercial way, does not exist at all. I wonder is there some way in which we could avoid that confusion in the overall picture?—I might clarify that a little. We had exactly the same view about the Aer Rianta accounts and we arranged to have a footnote to the accounts included, showing they were exclusive of the cost of the state service, interest and depreciation. At page 242 of the Estimates for Public Services 1962-63 there is a note which reads: “The Dublin Airport Management Account does not reflect the full cost of operating Dublin Airport since no account was taken of such factors as Meteorological and Radio Services, Air Traffic Control, Interest on Capital, etc.” I may say that the charges for Air Traffic Control and Meteorological Services are arbitrarily included. In a number of countries these services are not charged against the airport.

Deputy Booth.—The Committee might consider commenting on this position in its report.

213. Chairman.—Let us turn to the Vote on page 138.

Deputy Carter.—On subhead F.2.— Redundancy Compensation—was the redundancy higher than was foreseen?—It was higher than was estimated. We depend, of course, on Córas Iompair Éireann to make these estimates. They cannot pay redundancy compensation until an order has been made bringing the particular branch of their system under the provision. Several of those orders were made during the year and I may say that most of the increase was due to a large number of redundants electing to take part of their compensation by a commuted sum. They can commute one quarter of the value of their pension and I believe the total payments in the year amounted to £102,000. I think it was £102,000 that was paid in these capital sums.

214. Deputy Booth.—On subhead G.— Grants for Harbours—there is a reference in the Notes to arrangements not being completed in respect of a number of schemes. Are these schemes entirely under the control of the Department or has the Department to wait for arrangements from harbour authorities or outside bodies?—In most cases. In some cases the harbour authority is borrowing money from local authorities and there are arrangements to be completed in these cases before the grant is given. They have to have various investigations made which, sometimes, in the case of big dredging programmes, take a long time, perhaps stretching over several seasons of the year. There are quite a number of factors beyond anybody’s control.

Certainly outside Departmental control?—Quite outside Departmental control.

215. The note in regard to subhead H.2.—Construction Works including Furnishing of Buildings at Shannon Airport—includes a reference to excesses amounting to £48,000 on the provisions for major alterations to the terminal buildings and the erection of a hangar. Does the word “excesses” mean that the amount was more than was originally budgeted for or is it that the payments became due rather earlier than originally expected?—I think a lot of it is for works executed at the terminal buildings. I think it was a little of both. Sometimes when you begin a job you find you have to do more than you anticipated and, in this case, we got on quicker with the work. It was rather urgently required.

216. Chairman.—In regard to subheads H.2., H.3. and H.4., which deal with constructional works, including furnishing, at Shannon, Dublin and Cork Airports, could you give us a breakdown of the expenditure on runways, buildings and furnishings?—At Shannon Airport on the new runways and taxi-ways the expenditure was £265,000; major alterations to the Terminal Buildings cost £101,000; additional office, storage and other accommodation cost £1,000; freight buildings, new boiler house and some reconstruction work in connection with that on runways cost £10,000; the erection of a hangar cost £20,000 and other works, £42,000, making a total of £439,000 for Shannon. In the case of Dublin, the expenditure on the extension of a runway and widening of the apron —this was for jet aircraft operations— was £102,000; alterations to the Terminal Building, public passenger and catering staff accommodation and provision of boilers cost £35,000; in respect of hangar No. 2 Annexe the alteration of electricity and water services and other works expenditure totalled £45,680; and the extension of another runway came to £60,000. This makes a total of £242,680. At Cork Airport the construction of runways has cost £200,000 and the construction of Airport buildings, £106,000. Diversion of Electricity Supply Board lines cost £22,000 and the provision of electricity supply a further £1,000. Providing a water supply cost £9,000 and miscellaneous other works came to £4,237, making a total of £342,237. Of course, these sums are not the complete cost of some of these works. The works were continued in the following years. That was just the expenditure in the year of account.

217. Deputy Carter.—On subhead I.2. —re services at Shannon—the Note refers to claims of the Electricity Supply Board regarding the rates of charges. Has a solution been arrived at?—Yes. It is a new system of charging but, while this account was in progress the negotiations had not been completed so we had less to pay for electricity in that year and will have a little more this year. It is a reduced rate.

218. Deputy Kenny.—In regard to subhead I.3—Transport of Staff—could you clarify the position? Against whom is the charge made?—What happens is that certain staff members have to pay rather large fares, more than they would have to pay in the city. So we purchase sixday tickets in bulk from Córas Iompair Éireann—from where the people live to where they serve. It may be from Limerick or from Ennis. Then we make a charge against the staff equivalent to what is considered the average charge if they were residing outside Dublin. It was 7/- at this time. We pay for the ticket. On some routes the total would be only 12/6d., on others, 33/9d, according to the distance each way.

Deputy Treacy.—Is 7/- the maximum charge?—A flat charge—flat for them all.

Irrespective of distance?—Yes; a flat charge.

219. Deputy Clinton.—Coming back to subhead I. and this special rate from the Electricity Supply Board. How special is that rate? Have we any particulars about that rate?—I have not the particulars here because the final agreement was not reached during this year’s accounts and I have not got it.

Chairman.—It will come up on the Vote in the House. It will come up in the future.

Deputy Clinton.—I was wondering if the rest of the country is paying for it.

Miss Beere.—There is a very large use of electricity—an enormous use in the one place.

220. Deputy Booth.—In connection with subhead J.2.—Protective Equipment for Irish Ships—is the equipment of Irish ships nearly completed? This is equipment to counter magnetic mines?—Yes.

Chairman.—We had this question discussed before?—The equipment of our ships is now practically completed. At the present time there is something like £1,000 or £1,200 still to be spent. When new ships are being built or if an older, and unequipped ship undergoes major repair then the equipment is put in.

Deputy Booth.—Automatically?—It is automatically going in now.

221. The cost is always charged against this subhead on the Departmental accounts, is it?—When Irish Shipping, Limited, are having a new ship built it goes into the cost of the ship.

Of the new ship?—Yes, of a new ship.

What happens in the case of an existing ship?—In the case of an existing ship the cost is defrayed out of this subhead. In a few cases we store equipment until there is an appropriate time for doing the job so as to avoid queueing up of ships, as was necessary during the last war. Then there was a queue for our ships to be fitted out.

222. Deputy Treacy.—On subheads J.1. and J.2.—Marine Services—might I ask if there is any provision made for, say, a helicopter service which many people think necessary and desirable?—There is no provision in this Vote.

223. Chairman.—On subhead M.— Technical Assistance—the Note says that the provision included £35,000 for a grant towards the cost of a major research and development scheme of which only £9,784 came in course of payment in 1960-61. Could you tell us what scheme it is that is referred to?—This is the Córas Iompair Éireann scheme, the one that I have mentioned previously.

224. Deputy Booth.—Could I have clarification as to what is involved in items 19 and 20 of the Appropriations in Aid—Class B communications traffic and en-route communications between transatlantic aircraft and Shannon Aeronautical Radio Station. How are those charges made?—Charges are made to airline companies for the air to ground communication service which we provide for their aircraft on transatlantic flights. We supply weather information, traffic messages and miscellaneous company messages. We aim to get back the cost of the service, plus an agency fee for ourselves—about £70,000 in a year—and this is divided up according to the number of messages in each month and it is apportioned to the air companies. They contact us for the information if they want it. That is item Q.20. In regard to item Q.19., we got £2,278 from it and these are also charges to airline companies and are for the transmission of certain types of aeronautical messages which go over the teleprinter circuits to addresses mainly in the Netherlands and in Britain. The rates charged are the same as for public telegrams. The receipts, £4,556, are divided between the Department of Transport and Power and the Department of Posts and Telegraphs.

Does subhead Q.19 and subhead Q.20 relate to somewhat similar information but one refers to ground installation and the other to aircraft in flight?—Not necessarily. I think they can send all kinds of messages by the teleprinter—any kind of message. The others are more the kind of messages for safety, weather, and such like.

225. Chairman.—In regard to item No. 18—Catering and Sales Service—I notice in the Note that, while the actual sum due for appropriation was £93,870, only £70,020 was received in the year. Why?— There is always a gap because the company must keep some working capital and, of course, the end of the financial year coincides with a time of the year when very few planes are passing through Shannon. There is always a carry over, accordingly, into the next year.

It is normal procedure?—Yes. We get all the money in time but they have to keep some on hands.

226. Deputy Carter.—In the reference to crops—item 22—I should like to know how you dispose of them?—Hay, of course is our only crop and that is disposed of by public auction.

227. Deputy Booth.—In the note there is a heading “Cork Airport” and under it reference is made to miscellaneous receipts, including those from meteorological services. Surely that is a mistake. I can hardly imagine there would be much return from meteorological services at Cork Airport this year?—The heading should have been separated from the Cork Airport provision. Item No. 23 refers to all three Airports.

The witness withdrew.

VOTE 47—INDUSTRY AND COMMERCE.

Mr. J. C. B. MacCarthy called and examined.

228. Chairman.—Paragraph 70 of the Report of the Comptroller and Auditor General says:—

“Córas Tráchtála.

Subhead K.1.—Córas Tráchtála (Grants-in-Aid).

Subhead K.2.—Promotion of Whiskey Exports (Grants-in-Aid).

70. Grants to Córas Tráchtála, which under the provisions of section 16 of the Export Promotion Act, 1959 may not exceed one million pounds in the aggregate amounted to £363,000 at 31 March 1961 including £266,000 issued in the year under review.”

Paragraph 71 goes on to explain that paragraph and it is as follows:—

“An Foras Tionscal.

Subhead M.1.—Grant under Undeveloped Areas Act 1952 (Grant-in-Aid).

Subhead M.2.—Grant under Industrial Grants Act 1959 (Grant-in-Aid).

71. As explained in paragraph 70 of the previous report, the Industrial Grants Act, 1959 extended the functions of An Foras Tionscal to enable it by means of grants and guarantees to aid industrial development outside the undeveloped areas. Including grants issued prior to the passing of this Act, the aggregate amount that may be issued is limited to ten million pounds. Grants issued to 31 March 1961 were as follows:—

229. Deputy Kenny.—In what areas was this sum of £272,000 spent?—It is shown in the Report of An Foras Tionscal for that year. In it they break down the approvals on a county-by-county basis and show the actual expenditure in relation to the individual schemes approved. This is their report for the year ended March 31st, 1961. The Deputy may not have a copy with him but, in Appendix 2, on page 6, it shows the expenditure county by county.

I presume that we can get copies of that report. County Mayo is one of the underdeveloped areas and that is why I am interested?—I do not see anything for County Mayo in the particulars of payment for that year. Of course payments do not necessarily correspond with approvals. It could be there has been a grant in respect of some application in County Mayo but that no actual payment may have arisen.

Deputy Clinton.—This just deals with the undeveloped areas and does not go outside?—Areas outside the undeveloped areas are also dealt with.

Deputy Kenny.—We must remedy this in respect of County Mayo this year. I now have a copy of the report and I see that Claremorris is mentioned?—An Foras Tionscal are not, of course, a promoting body. They have no responsibility whatever for organising schemes. Their only job is to deal with people who have schemes and who come to them looking for grants. The promotional activity in relation to schemes is in the hands of the Industrial Development Authority.

230. Chairman.—In relation to the £2,660,000 which has been placed at the disposal of An Foras Tionscal, to what extent has that sum been disbursed?—I think it has practically all been disbursed. There are two separate divisions. Under the undeveloped areas section, the only balance left in the bank was £619, so you may say the total amount for those areas has been disbursed. In the case of the areas outside, the total amount which was left was £500, so again practically the total sum was expended. They do not take the money from us until the need for it arises.

In respect of the guarantees given, what is the liability of An Foras Tionscal in regard to these guarantees?—I do not think that power has been used.

231. Deputy Clinton.—This publication to which you have referred shows details of a number of schemes received and the amount approved and the amount rejected but it does not give the amount of the money paid out?—In the case of the approved schemes you would get the amounts of money under the heading of “payments”. I quite agree you cannot very well relate one to the other, but I am afraid that is the only way you could work it out. In the case of the non-approved schemes the amount is, of course, not relevant. There might not be a figure at all. People might apply for grants and the application would be thrown out. There might not be a definite figure.

What I was interested in was the amount expended in each county?—You have got that in the report, in Appendix 2, on page 6. That shows the actual expenditure in the year and the actual approvals. You will also find, in Appendix 4, on page 10, the corresponding information for areas outside the undeveloped areas. You would have to take all the reports and add them together to get the total, up to date, in any particular county.

232. Chairman.—We now turn to the Vote itself on page 132. In regard to subhead G.—Minerals Development— could you give a break-down of the figure as between the actual prospecting and the compensation?—In fact this is all compensation. I shall give the actual expenditure. It arises in two areas. We had a provision of £2,000 for payments in Slieveardagh coalfield. It was acquired in 1941 and the royalties were fixed by the Mining Board. The actual expenditure was approximately £1,600. In the case of the Mineral Acquisition Order of 1946, which refers to Cavan, Monaghan and Meath, we had an expenditure of about £2,500. We did provide, in a third case, for the copper deposits at Allihies, in County Cork, but the compensation there is not on a royalty basis. It is a percentage of profits, so that no payments arise until production starts.

233. Deputy Clinton.—Is compensation always by way of royalty?—That is a somewhat difficult question to answer. It is not always by way of royalty. The relevant Act provides that in certain cases, and these circumstances have not arisen in this case, compensation will be by way of a lump sum, but in all other cases where the matter is left to the Mining Board, compensation will be by way of royalty. There is nothing, however, to debar the Minister and the parties concerned, by agreement, from coming to a lump sum arrangement. Anything may be agreed, but failing agreement, the whole question of compensation goes to the Mining Board. The Mining Board must recommend a royalty payment except in very special circumstances, and I think the occasion for those has passed.

Is it on a quantative basis?—It varies. Normally it is, say 6d., 9d. or 1s. per ton and the evidence of production is sufficient to justify collecting the royalty. There are other cases, like Allihies, where we have, by agreement with the parties concerned, fixed it on a percentage of profits. There are other cases where it is related to sales rather than production. I am thinking of oil. The arrangement we have there is that we would get 40 per cent. of the value of the oil and the producer would keep 60 per cent. Our 40 per cent. must cover income tax and local rates.

234. Deputy Treacy.—Could we have an explanation of the situation at Slieveardagh?—These mines were acquired compulsorily during the war years. It was a very long drawn out business to establish the title which was frightfully obscure. The Mining Board took years at it and, in some instances, the title is not settled yet. We are now paying royalties. The Minister has to pay compensation to the original owners of the minerals. We had collected royalties on the actual production of the coal.

There was about £1,600 spent in 1960-61 and as yet compensation has not been finalised?—That is my impression. The compensation has not been finalised in the sense that the Mining Board has made an award but we cannot pay until the title to the original minerals is established.

235. Chairman.—On the subheads relating to the Institute for Industrial Research and Standards, is there any particular reason why progress on construction was so slow?—No particular reason at all but these are all scientists and they are fussy about having it done correctly. The building has been completed but we have not finished the equipment of the laboratories.

236. Deputy Burke.—On subhead K.2. —Promotion of Whiskey Exports (Grant—in-Aid)—that is one of my pet aversions. I should like to know how it is done?— This is a somewhat delicate matter because, as you know, there is now no provision. It has been dropped in the current year. There is a motion on the Order Paper of the Dáil and the Minister will, no doubt, deal with the matter on his Estimate. I think I should ask to be excused from going into any questions of policy. I can give a good deal of information but I think I should be excused so far as matters of policy are concerned. The scheme was in two parts. We gave grants to Córas Tráchtála for what was known as an institutional campaign, a general campaign to sell Irish whiskey as Irish whiskey. There was a condition that for every pound spent on that campaign the distillers, in advertising their own particular brands, would collectively spend on a pound for pound basis with Córas Tráchtála. The scheme had, I think, good results and increases were reflected in the sales of whiskey but as in all such cases, you can never be sure, of course, how far the increases can be related to the expenditure. It is very hard to relate one to the other. The institutional campaign took several forms. They engaged in publicity, and particularly in a series of articles, of a semi-humorous character, in the Saturday Evening Post. They organised competitions between bars for window dressing, and there was also the mounting of displays in the actual bars. They spent a lot on publicising Irish Coffee.

Deputy Belton.—I gather that this grant was for the promotion of whiskey sales in America?—That is so.

Deputy Belton.—I agree with what Mr. MacCarthy said about policy and so forth, but I should like to say that something should be done about Irish whiskey sales in England where we have a big market.

Chairman.—Matters of policy will come up on the appropriate Estimate.

Deputy Belton.—There is another comment I should like to make. In the Imperial Hotel in London, not so long ago, I asked for Irish Whiskey and I nearly hit the roof when I saw the label: “Old Irish Whiskey”. The distiller was ashamed to put his name on it.

237. Chairman. — On subhead N.— Export Guarantee Arrangements under the Insurance Act, 1953—in what circumstances are these guarantees given?— We have a scheme, known as the export credit guarantee insurance scheme, under which we arrange that exporters will be insured against both political and commercial risks which might either frustrate exports or, if the exports are made, frustrate payment. We do not, in fact, administer the insurance departmentally, but we have made an arrangement with the Irish insurance companies under which they provide insurance against the commercial risks such as the solvency of the buyer, and we, through them, underwrite the political risks that might arise. When there is a claim settlement is made by the insurance companies and we then reimburse them for that part of the claim which refers to political risks. There is also, under the same Act, a system administered by Córas Tráchtála which is known as the joint ventures scheme, copied from the British export credit guarantee scheme, under which Córas Tráchtála and the exporter share on a halving basis any loss they may incur either (a) in market survey, (b) in promotional activity, or (c) in the manufacture of trial lots of goods for a market which may not eventuate with the result that the goods may have to be disposed of at a loss. The case dealt with here is a straightforward one in the sense that the guarantee was given in respect of carcase meat which was consigned to the United States of America and refused admission on veterinary or hygiene grounds. It was alleged at the time, by the exporters, that the refusal was really politically inspired, in other words, that the meat people in the United States had organised some sort of lobby, and had got the United States customs authorities to refuse admission for some trifling defect. A great deal of consideration was given to the case which was obviously a borderline one. The meat had been examined by the Department of Agriculture, and had got a certificate that it was absolutely clean. It could not have become contaminated in transit and, therefore, on the face of it, it looked as if there might be something in the allegation. It was decided eventually to admit the claim. It was paid by the insurance companies and this is the reimbursement to the insurance companies.

Deputy Booth.—There was just one claim and that is why the estimate and expenditure are identical?—We knew in advance that there was no other claim that year. We had two claims, altogether —this one and a loss which is shown in an earlier year in the joint venture scheme. It was in connection with a fruit juice firm in Tipperary.

238. On subhead P.—Technical Assistance—there is a note which says: “… industrial consultancy schemes were not completed within the year and others were deferred or cancelled”. Is there any significance about cancelling some schemes or are there always a number which are deferred and subsequently not proceeded with?—This is quite usual. There is no significance at all so far as we are aware. It often happens. The normal procedure is that most consultants give preliminary reports for which there is no charge, containing an outline of what they hope to do. We may sanction a grant, and subsequently the firm may decide not to go ahead. This type of cancellation does not mean that we cancelled anything.

I was wondering if there was an unusual ratio. This is normal?—This is the normal.

239. Chairman.—In regard to the National Development Fund—as shown in the table on page 137—what is the position in regard to the projects under your control? Are they nearing completion?—There are only three: An Óige in Dublin, An Óige in Killarney, and An Óige in County Donegal. In earlier years we had others. In the future, these particular matters will fall to be looked after by the Department of Transport and Power which has taken over tourism. We have nothing else left. We were out of it at the end of the year of account.

The witness withdrew.

VOTE 46—AGRICULTURE.

Mr. J. C. Nagle called and examined.

240. Chairman.—Paragraph 47 of the Report of the Comptroller and Auditor General reads:—

“Subhead M.6.—Farm Buildings Scheme and Water Supplies.

47. The expenditure is made up as follows:—

Have you anything to add to that, Mr. Ó Cadhla?

Mr. Ó Cadhla.—That is for information.

241. Chairman.—Paragraph 48 of the Report of the Comptroller and Auditor General reads:—

“Subhead M.7.—Land Project.

48. The payments made in the year under this head are as follows:—

Have you anything to add, Mr. Ó Cadhla?

Mr. Ó Cadhla.—No.

Chairman.—On subhead M.7—Land Project—can we know the acreage that has been approved?—The expenditure of this amount in 1960-61 represents reclamation of about 118,000 acres. In the previous year the figure was 117,000, almost the same.

242. Chairman.—Paragraph 49 of the Report of the Comptroller and Auditor General reads:—

“49. An occupier of land who undertakes an approved scheme of reclamation work on his holding is entitled, when the work has been completed to the satisfaction of the Department, to a grant amounting to two-thirds of the estimated cost subject to a maximum of £30 per statute acre. Grants to farmers amounted to £1,616,240 in the year as compared with £1,662,111 in the previous year.”

243. Chairman.—Paragraph 50 of the Report of the Comptroller and Auditor General reads:—

“50. As mentioned in previous reports it was decided to discontinue section B of the project as from 13 November 1958 but to carry out work under agreements entered into by that date. Payments to contractors in the year amounted to £58,775 as compared with £185,332 in the previous year.”

How near are you to completing outstanding agreements under section B of the Land Project?—There are still small remnants but expenditure in the current financial year, we believe, will see the end of it.

244. Chairman.—Paragraphs 51 and 52 of the Report of the Comptroller and Auditor General read as follows:—

“Subhead M.8.—Lime and Fertilisers Subsidies.

51. The expenditure from this subhead is made up as follows:—

The reports of officers of the Department who inspected the records of the various firms to verify subsidy claims were examined by my officers with satisfactory results.

52. The subsidy paid from the vote to manufacturers of home produced superphosphate enables supplies to be made available on the home market at the world price. The basic rate of subsidy payable is the difference between the economic ex-factory price of home produced superphosphate as determined by the Department of Industry and Commerce and the landed price of imported superphosphate. In February 1959 the Department of Industry and Commerce determined the economic ex-factory price for the 1958-59 fertiliser season (i.e. 1 July 1958-30 June 1959) and appropriate payments in respect of subsidy were made from the vote for Agriculture in the financial years 1958-59 and 1959-60. After a review of certified financial accounts and final manufacturing costings for the 1958-59 season the Department of Industry and Commerce established in April 1960 that the economic ex-factory price had been overstated to the extent of 9s. 6d. per ton. As a result, overissues of subsidy were calculated to be £90,920 and as shown in the account refunds amounting to £86,519 were obtained by 31 March 1961 and credited to Exchequer extra receipts. I inquired regarding the adoption of more effective measures to safeguard against future overissues of public moneys under this scheme and I was informed that it has been decided to defer the estimation of the economic price for 1960-61 until the accounts of the manufacturers for that season are available.”

Chairman.—Have you anything to add, Mr. Ó Cadhla?

Mr. Ó Cadhla.—There were some questions and I have a long reply from the Accounting Officer. I shall read it:—

“The following information has been supplied by the Department of Industry and Commerce in reply to the queríes opposite:—

(a) For the fertiliser year 1956/57 (the first year in which the subsidy was payable) the economic price of superphosphate made by Irish manufacturers was taken at the figure recommended by the Prices Advisory Body and accepted by the Minister for Industry and Commerce. This price was determined by the Prices Advisory Body after a public inquiry in November, 1956.

The 1956/57 economic price as fixed by the Prices Advisory Body was taken as the basis for subsequent years, when adjustments were made by reference to figures, supplied by a certain firm, of their estimated variations in costs. At the same time the certified financial accounts of the particular firm for each year were examined. No specific profit margins were allowed in any of these years. The accounts and costings for 1958/59 were closely scrutinised by normal accountancy methods, as soon as they became available.

(b) The circumstances in which the economic price for 1958/59 was revised, were as follows. The particular firm estimated that their total costs would show a reduction in that year as compared with 1957/58, of 10/6d. per ton of superphosphate. The examination of these figures, which were based upon an estimated output of 120,000 tons of superphosphate did not indicate any overestimation by the company. However, when the company’s certified financial accounts and final costings for the year ended 30th June, 1959 became available it was found that—

(i) the possibility was that their costs had been over-estimated by perhaps as much as 13/6d. per ton, and

(ii) their profit rate on sales showed an increase to 7.3 per cent. as compared with the rate of 4.6 per cent achieved by the company in 1957/58.

In these circumstances it was considered by the Minister for Industry and Commerce that there was a prima facie case for re-examining the economic price determined for the 1958/59 season.

(c) When the re-examination of the economic price for 1958-59 was carried out, the firm in the course of discussions, established to the satisfaction of the Minister for Industry and Commerce that the appropriate reduction in the 1958/59 price was 9/6d. per ton. The earlier price, reduced by 9/6d. per ton, represents, accordingly, the price at which, in the view of the Minister for Industry and Commerce the manufacturers could economically sell superphosphate in the 1958/59 season, in accordance with the Government directive of 12th November, 1956.

(d) Because of changes in the fertiliser industry it has been decided to defer the estimation of the economic price for 1960/61 until the accounts of the manufacturers for the season are available. This should obviate the danger of over-estimation of the economic price for that year.

An alteration of the basis of the subsidy scheme for future years is at present under consideration.

245. Chairman.—That is a very full note. Any questions?

Deputy Carter.—I only want to observe that deferring the estimation of the economic price would, I suppose, remedy the position. That is the opinion—that it would remedy the matter if the calculation were deferred?—Yes. We, of course, have been guided in this matter by the advice of the Department of Industry and Commerce, which is the authority on the costings aspects of the fertiliser industry but, in view of this particular development, both Departments felt the best thing to do in future was to defer the final determination of the economic price until the commercial accounts of the firms for the year in question would be available.

Deputy Burke.—That is a sensible precaution?—Yes. Since then, I may perhaps add, as a matter of interest, that these two subsidy elements are being amalgamated in the coming financial year so that, in future, there will be only one subsidy, and not two different types of subsidy, which we think will also simplify the administration.

246. Chairman.—Paragraph 53 of the Report of the Comptroller and Auditor General reads as follows:—

“Subhead M.11.—Bovine Tuberculosis Eradication Scheme.

53. The expenditure is made up as follows:—

Receipts from the sale of cattle slaughtered under the scheme amounted to £1,869,526 for the year and were credited to appropriations in aid.”

Have you anything to add, Mr. Ó Cadhla?

Mr. Ó Cadhla.—I have nothing to add.

247. Chairman.—Paragraph 54 of the Report of the Comptroller and Auditor General reads as follows:—

“54. The gross cost of the scheme from its inception in September 1954 to 31 March, 1961 was £19,881,434 and receipts from the disposal of cattle for slaughter were £7,315,169. The net cost was therefore £12,566,265. Allocations towards the cost were provided from the Grant Counterpart Special Account (£700,000) and the National Development Fund (£653,000).”

Have you anything to add to the paragraph, Mr. Ó Cadhla?

Mr. Ó Cadhla.—No. The paragraph is merely for information.

248. Chairman.—Could we know what stage has now been reached towards the complete clearance of the country?—At the end of the calendar year, 1962, we have every reason to hope the entire country will be attested with the exception of what we call the six southern counties, that is to say, the Province of Munster excluding Clare, which is already attested, plus Kilkenny. The rest of the country, if our programme goes ahead as we think it will, will be attested by 1st January next. We hope these other six counties will follow within a few years.

249. Deputy Kenny.—Could you tell us what method of compensation have you in the southern counties for reactors?— Yes. In the six southern counties we have had, for some years, a special scheme under which farmers themselves deliver the cow reactors to the canning factories and the Department then pays a flat sum of £15 per head on these. In addition, when the farmers in these counties have a clear herd as determined by test, they are then entitled to a special bonus which, at their own choice, can be either at the rate of £4 per cow on the number of cows in their herd or £8 per cow on the number of cow reactors which they have removed. The £4 and the £8 are supposed to balance inasmuch as experience is that approximately 50 per cent. of a herd in these areas will eventually be removed as reactors. So, a man who has a clear herd will then get, first of all, the £15 for each reactor delivered and, if he gets a clear herd, he can then claim £8 on each of these reactors—a total of £23. Of course, if he does not achieve a clear herd status he only gets the £15.

Deputy Clinton.—Is there a time limit on that?—We had, I think, a three or four year time limit when it was introduced but I may add that the whole future of arrangements in the South is under consideration.

250. Chairman.—Paragraph 55 of the Report of the Comptroller and Auditor General reads as follows:—

“55. As indicated above guarantee payments amounting to £198,421 for fat cattle exported and £67,169 for carcase beef exported were made during the year. These payments relate to special export arrangements introduced in July, 1960 whereby a market was provided for uncertificated fat cattle which otherwise might have had to be sold at uneconomic prices or might have been retained in this country for an unduly long period thus increasing the risk of the spread of bovine tuberculosis.”

Have you got anything to add, Mr. Ó Cadhla?

Mr. Ó Cadhla.—I have nothing to add. The paragraph is for information only.

251. Chairman.—Paragraph 56 of the Report of the Comptroller and Auditor General reads as follows:—

“56. The average loss per cow reactor incurred in each year since the inception of the Bovine Tuberculosis Eradication Scheme on the purchase and sale of cow reactors was calculated by the Department to be as follows:—

In reply to my inquiry as to the causes for the increase in the rate of loss in the years 1959-60 and 1960-61 as compared with earlier years I was informed that, as clearance measures proceed towards attestation, cow reactors purchased include a higher proportion of good milch cows thus increasing the divergence between market value which takes account of their milk potential and canning value. The Accounting Officer has furnished statements to me showing the prices of cows at the Dublin Cattle Market and has suggested that reactor cows purchased by the Department’s officers in each of the years 1959-60 and 1960-61 were not overvalued. Also, supervising agricultural officers have been appointed to all district offices to ensure that valuations for the purchase of reactors are keen and uniform.”

Have you anything to add Mr. Ó Cadhla?

Mr. Ó Cadhla.—The paragraph is for information only.

Deputy Carter.—I notice that the rate of loss in the years 1959-60 and 1960-61 rose fairly steeply because of the purchase of a higher proportion of good milch cows, thus increasing the divergence between market value and canning value. It is clear enough, I suppose, that the rate of loss is due to that factor.

Chairman.—Is the Deputy putting a question?

Deputy Carter.—No.

252. Chairman.—At the end of the paragraph it is said that supervising agricultural officers have been appointed to all district offices to ensure that valuations for the purchase of reactors are keen and uniform. Had you some doubts as to the uniformity or fairness of these valuations?—Occasionally we had. Of course, this is a very big scheme and the numbers of cows purchased under it is extremely high. It would be foolish to pretend that everything was perfect. We think on the whole the arrangements were quite good but that does not mean that there was not some room for improvement. It was quite correct to say that in some cases we did occasionally notice some difference in valuations in different areas which could not be, we thought, accounted for altogether by the quality of the animals. I am not saying that these differences were very pronounced but they did seem to exist. We would be able to secure a better degree of uniformity which, I may add, does not necessarily mean reducing the overall price to the farmer; it is to get a uniform basis of pricing these animals. I did not know whether you wished me to say anything by way of explanation of the increase in the loss per animal?

Chairman.—I think Deputy Carter was just commenting.

Deputy Burke.—There is one point that I came up against recently in County Dublin. One of your valuers or inspectors went to buy cows and the dairyman concerned felt that the cost of replacing the same type of cow would be about £90. I shall just give a hypothetical case. The Department’s valuer offered £57. The dairyman claimed that in this case he should get at least £65. Just put it that way. What appeal is there in that case? Does the Accounting Officer deal with that?

Chairman.—That is something you might raise at another stage.

Deputy Burke.—I understand.

253. Chairman.—I now refer to paragraph 57 of the Report of the Comptroller and Auditor General which states:—

“57. Reactor cows purchased by the Department under the Bovine Tuberculosis Eradication Scheme in areas outside the six southern counties are disposed of to canning firms under contracts quarterly at competitive tender prices. In the six southern counties the canning firms purchase reactor cows direct from owners and compensation payments, related to the purchase price, are made from the vote to indemnify them against loss in respect of any meat condemned on slaughter. It was noted that the contract prices paid by certain firms to the Department for reactor cows were approximately 3 pence per lb. lower than the average price paid by these firms for cows purchased direct from owners in the same period. In reply to my inquiry I was informed that the Department has not access to any data as to the actual cost of transport which contracting firms, in undertaking to accept delivery of animals at various centres, must take into account in their quotations and consequently is not in a position to prove that the difference between the prices is attributable to transport costs but that it is obvious that transport costs must be a material factor. I was also informed that dairy cows from areas outside the six southern counties are sold by the Department to the processors at comparatively low prices because cows in milk are not really wanted by processors because of their relative unsuitability for the beef trade, whereas farmers in the south can choose their own time to dispose of reactor cows and sell them in the most suitable condition for the meat trade.”

The paragraph refers to canning firms under contracts arranged quarterly at competitive tender prices. Is not the Department in a position to judge whether they are really competitive?—I never remember our getting the same quotation, so to speak, from different firms. There is always a difference and the contract is placed with the highest bidder.

254. Deputy Clinton.—One thing that struck me about this scheme is that it seems a strange arrangement that cows have to be transported from as far away as Dublin to Roscrea because Roscrea got the contract. On the other hand you can have cows being transported from close to Roscrea to Leixlip because Leixlip got a contract. Is there any way in which the cost of transport could be overcome?

Chairman.—That is a comment which you could make on the scheme. It is policy, I suppose.

Deputy Carter.—There is one point in the paragraph where it refers to contract prices paid by certain firms to the Department for reactor cows and it mentions a price of 3d. per lb. lower than the average price paid by these firms for cows purchased direct from owners. Would the transport element enter into that?— Really there are two elements involved in that. One is the transport element. In the case of these contracts with the Department the canners are responsible for the cost of transport to the factories. What the actual cost of the transport is we do not know. The other element is really related to the difference in type or character of animals purchased on a contractual basis quarterly in advance in large numbers—the bulk purchase of cows or reactors—and the individual purchase of cows by factories from day to day on a purely commercial basis. In the case of the Departmental contracts we ask the tendering firms to quote a firm price for three months in advance, to include the transport, and among those cows are a number of good class dairy animals, some of them perhaps in milk, some of them even in calf. These animals, while very valuable as dairy animals are less valuable for canning than a lean old cow which has been dried off. We believe that accounts in part for the difference in the two levels of prices to which the Comptroller and Auditor General has rightly drawn attention.

255. Chairman.—Paragraph 58 reads as follows:—

“Subhead M.12.—Grants for Pasteurisation of Separated Milk etc.

58. Grants to creameries towards the cost of approved pasteurising plant and can-washing equipment amounted to £38,643 in the year. This amount was recouped to the Department from the American Grant Counterpart Special Account and credited to appropriations in aid. (See paragraph 68).”

256. Chairman.—Paragraph 59 reads:

“59. I referred in my previous report to certain refunds in respect of grants which are credited to a suspense account. I understand that the matter is still under investigation.”

Mr. Ó Cadhla.—I have a query regarding this paragraph and a memorandum from the Accounting Officer of the Department which reads as follows:—

Under the scheme of grants which provides for the payment of 50 per cent. of the delivered cost of separated milk pasteurising plants to creameries and separating stations, this Department last year found evidence pointing to certain irregularities in regard to applications for grants for a number of the plants supplied. It appeared that with the connivance of certain creameries a particular supplier inflated the actual cost of the plants in the various documents (quotations and receipts) with the object of securing for the creameries higher grants than they were properly entitled to, the difference between the true cost and the cost as represented to the Department being (a) the cost of other items of dairy equipment supplied to the creameries and not qualifying for grant purposes, and/or (b) the cost of erecting the pasteurising plant, which is also ineligible for grant. These irregularities related both to grants that had been paid and to cases where applications were being considered for payment.

The matter was reported by the Department to the Attorney General who arranged for an investigation by the Gardai. It is understood that the investigation has now been completed and that the matter is being considered by the Attorney General.

The refunds in question were made voluntarily by some of the creameries concerned during the course of the Garda investigation and were sent to this Department either direct or through the supplier of the pasteurising plants.

257. Deputy Booth.—Was this becoming a widespread practice or was there only the one contractor involved? Had anybody else the same idea?

Chairman.—Is this question still sub judice?—Actually proceedings were taken last December and the case has been disposed of.

Deputy Clinton.—Is it a single case? I thought I heard Deputy Booth remark that it was widespread?—There was only one supplying firm involved but there was more than one creamery.

Has it been shown to be deliberate or was a certain amount of it due to ignorance?—The case was dismissed under the Probation Act on the defendant undertaking to pay a sum of money towards defraying the cost of the prosecution. Actually we do not expect to have any losses in respect of it. The amount outstanding at the moment is about £1,400 but we have no reason to think the creameries concerned will not pay up this sum.

258. Chairman.—We now come to paragraph 60 which reads:—

“Subhead M.14.—Payments to Pigs and Bacon Commission.

60. The scheme introduced in April 1956 to support the price of Grade A bacon exports is administered through the Pigs and Bacon Commission and is financed out of the proceeds of a levy on bacon pigs purchased by curers together with a State contribution. It was found necessary during the year to increase by a supplementary estimate for £300,000 the original provision of £550,000. Since May, 1960 the scheme includes a new grade—“A” Special— for bacon of very high quality.”

Deputy Kenny.—Could you tell us how the levies are collected? I see here you say the Bacon Commission is financed out of the proceeds of a levy on bacon pigs. How are they collected?—A levy of 15/-a pig is imposed on all pigs received into the factories. It is due under a statutory order and has to be paid over to the Pigs and Bacon Commission. To the sum realised by the levy is added the Exchequer contributions and the total is then available to pay the export subsidies.

259. Chairman.—Would you have the average rate of subsidy paid during the year?—The realised price for extra-select bacon—the bacon exported from Special A pigs—was 271/- on the average over the whole year. That was, of course, the price realised in Britain. As against that the guaranteed export price was 347/- so the difference between the two represents the rate of subsidy. In the case of A bacon the average realised price was approximately 258/- in Britain and here the guaranteed price was 327/-.

The Pigs and Bacon Commission was reorganised in the 1961 Act. Is the new body now administering the subsidy?— Yes, they have taken over the marketing of bacon generally.

260. Chairman.—We now turn to paragraph 61 of the Report of the Comptroller and Auditor General:—

“Subhead M.15.—Losses on Disposal of Wheat.

61. The expenditure under the subhead is made up as follows:—

261. Deputy Clinton.—Does this payment towards the loss of An Bord Gráin arise from the 1960 wheat crop—£800,000 —represent a big increase on the previous year?

Chairman.—I think that what the Deputy wants to know is whether the figure was an increase over what it was for 1959?—In 1959 we had a very good wheat crop. There were no losses on the crop which was all millable but in 1958 we had a bad crop and part of the cost of the guarantee arrangements made for the 1958 crop was charged in 1960-61. The simplest way to put it is to say that the total net loss to the Exchequer on the 1958 wheat crop was just under £300,000 so it is perfectly clear, as Deputy Clinton suggested, that the loss on the 1960 crop was far and away higher. It is only fair to state that the £800,000 is only part of the loss on the 1960 crop. The remainder is being paid in the present financial year.

262. Chairman.—We can take paragraphs 62 and 63 of the Report together. They read:—

“62. Reference was made in previous reports to the arrangement under which An Bord Gráin would purchase and dispose of 230,000 tons approximately of the 1958 wheat harvest which was not millable into flour. The accounts of An Bord showed losses at 31 August, 1960 of £383,518, towards which £350,000 had been advanced in previous years.

63. In regard to the 1960 wheat crop it was arranged that An Bord Gráin should purchase and dispose of so much wheat as was not utilisable for milling into flour. I understand that 150,000 tons were purchased by 31 March, 1961. £800,000 was paid on account to An Bord towards the anticipated losses arising from the disposal of this wheat.”

263. Deputy Kenny.—Are we to understand that the losses on 230,000 tons of unmillable wheat were £383,518 and that the losses on 150,000 tons were £800,000? Is that the explanation of these two paragraphs?—Of course the circumstances in 1960 were far different from what they were in 1958. In 1958 the total crop was very small—the total yield of the crop —whereas in 1960, there was a considerable crop. The levy which is imposed to finance the disposal of wheat surplus to stated milling requirements, which in this year were 300,000 tons dried, was not required in 1958 for that specific purpose because there was no surplus of wheat over 300,000 tons. This levy was, therefore, used instead to help to support generally the price and disposal of the wheat on terms which would give a reasonable return to the growers generally. To summarise, in 1958 the gross expenditure was about £850,000 or thereabouts, and allowing for a customs duty of £2 a ton imposed on imported wheat at that time, we had credits of about £557,000, leaving us with something under £300,000 of a loss. In 1960, we had a very large crop. The total crop was about 350,000 tons as compared with a total crop of only 255,000 tons in 1958. The milling industry took for milling purposes about 110,000 tons of the 1960 crop. The balance was disposed of for animal feeding and so forth. The gross loss on the 1960 crop, because of the large quantity of wheat involved, which was higher than it was in 1958, amounted to about £4½ million. Against that we had, first of all, the proceeds of the levy in 1960 which yielded £765,000, and we also had a sum of £1,820,000 contributed by the milling industry in order to wipe out the financial advantage which would otherwise accrue to them from being in a position to buy imported wheat instead of home grown wheat. Those two contributions, the levy contribution and the milling industry contribution, totalled roughly £2½ million, so the net loss will be about £2 million.

264. Chairman.—Paragraph 64 of the Report of the Comptroller and Auditor General reads:—

“Subhead P.—Subsidies on Dairy Produce.

64. The expenditure from this subhead is made up as follows:—

Have you anything to add to that, Mr. Ó Cadhla?

Mr. Ó Cadhla.—It is for information only.

265. Chairman.—Paragraph 65 of the Report of the Comptroller and Auditor General reads:—

“65. Consequent on an increase in the price of creamery milk as from 13th April, 1960 it was decided to make good to manufacturers the increased cost of the milk content in exports of chocolate crumb and certain milk products by subsidy payments. A subsidy towards freight costs was also paid on exports of chocolate crumb to Britain and the Six Counties.”

Have you anything to add to that Mr. Ó Cadhla?

Mr. Ó Cadhla.—That likewise is for information.

266. Chairman.—Paragraphs 66 and 67 of the Report of the Comptroller and Auditor General reads:—

“66. The loss on butter exports by the Butter Marketing Committee in the year ended 31 March, 1960 was £30,727 and one-third of this is met from the Dairy Produce (Price Stabilisation) Fund.

67. The loss on butter exports by the Committee in the year ended 31 March, 1961 is borne mainly on the vote and partly on the Fund and payments on account amounting to £2,375,000 are charged as follows:—

What would be the average loss per cwt. of butter exported?—Taking the financial year 1960-61 the average realised price in the export market was 256/7, that is, after allowing for transport to Britain. In the same year the average cost of the butter was 466/3 per cwt., so the loss was 209/8 per cwt. over the whole financial year.

267. Chairman.—Paragraphs 68 and 69 of the Report of the Comptroller and Auditor General are as follows:—

“Subhead R.—Appropriations in Aid Recoupment from American Grant Counterpart Special Account in respect of grants to certain rural organisations, pasteurisation of separated milk and technical assistance.

68. The amounts allocated and the recoupments from the American Grant Counterpart Special Account of expenditure incurred up to 31 March, 1961 on projects sponsored by the Department of Agriculture are shown in the following statement. The amounts recouped were credited to appropriations in aid.

The allocation to the Agricultural Institute is accounted for in the accounts of An Foras Talúntais.

Dairy Produce (Price Stabilisation) Fund.

69. The income of the Fund, derived from levies on creamery butter, amounted to £475,738 as compared with £646,421 in the previous year.

The payments from the Fund were as follows:—

268. Chairman.—The Vote is on page 114. On subhead E.2—Veterinary Research—to what extent was veterinary research affected by this saving?—That was really a difficulty in recruiting staff. It was not a financial difficulty. Of course, undoubtedly the shortage of staff in the veterinary laboratory had an effect on the amount of work that could be done. We were rather worried about that. The position is still not back to normal because of the well-known shortage of veterinarians at the moment but we hope that within a couple of years we may be able to fill all the vacancies.

Deputy Clinton.—The situation is improving?—It is improving gradually.

269. Deputy Booth.—On subhead E. 4— Miscellaneous Investigations, Inquiries and Reports—there is a note on page 119 which states that: “Certain proposed trials were not commenced or were discontinued.” Were the ones which were not commenced postponed, and were the ones which were discontinued completed or found to be of no prospective value?— My recollection is—but I should like to check it—that there was some shortage of staff at the time and that that had a bearing on the result. If I may, I should prefer to look into the matter after the meeting.

Chairman.—Perhaps you would send us a note at your convenience.*

270. Deputy Clinton: On subhead E. 5.—Livestock Progeny Testing—are the milk recording costs included or is it progeny testing of bulls only?—Subhead E.5. covers testing of pigs at the Cork Station. It also covers cattle progeny testing schemes we are operating in conjunction with the creameries.

Deputy Booth.—I think there may be a typographical error in the explanation of subhead F. 5 which says that excess was due to the recoupment of expenses incurred “on the equipment of new teachers.” I do not know what that means. Is it a typographical error?—I am afraid that is what is known as civil service jargon. What we intended to convey was that expenditure by the veterinary faculties of the two universities on equipment which the teachers required in order to teach properly is allowed as a charge against the grant. I quite agree the way it is put is not too clear.

It really means new teaching equipment?—Yes.

271. Deputy Carter.—On subhead F. 10.—Educational Tours for Instructors in Agriculture—apparently this is only a token amount?—Actually, we have been charging such tours to subhead Q. in recent years, that is, Technical Assistance. We have retained a token provision in subhead F. 10., perhaps out of official caution, in case by any chance sufficient funds did not prove to be available under the Technical Assistance Allocation.

Deputy Clinton.—Are we referring to instructors employed by the County Committees of Agriculture or to Department instructors?—This subhead applies only to county instructors.

I thought they were normally paid for by the county committees in question?— We found it more convenient to finance this type of expenditure from subhead Q. —Technical Assistance, but the County Committees pay one-third of the cost.

272. Deputy Booth.—On subhead G.3. —Improvement of Poultry and Egg Production—the note of explanation refers to the purchase of additional equipment for the white turkey unit at Athenry. Does that mean that the project has been better than was anticipated when the estimate was prepared?—The turkey unit has been developing in a satisfactory way and it was found necessary to spend rather more on installation, equipment, and so forth, than had been anticipated at the time.

Chairman.—White turkeys are becoming more popular?—That is right.

273. Deputy Carter.—Is the special scheme under subhead G. 4. making progress? It relates to a specific area?— The scheme was introduced because of the prevalence of eelworm in the area and it was thought advisable to have a change of cropping to get rid of that rather serious pest. The area which is sown to these various crops instead of to potatoes is about the same every year. It is what we might call the danger area. We are inclined to think that at this stage perhaps the risk of infection in the soil has been very much reduced but experts, of course, are never prepared to give you 100 per cent. clearance until they are perhaps 200 per cent. sure. So, we are carrying on the scheme for the present.

Are they in doubt as to the utility of the scheme for the purpose of clearing the soil? They have not succeeded in establishing the fact that retention of the system would, in fact, clear the soil?— It was certainly felt that less concentration on the potato crop would be bound to bring about a great deal of improvement and I think that is the position but this is a very elusive pest, this eelworm, and has been known to linger on land for long periods. We hope to get rid of it altogether but I would not like to estimate when that will be.

274. Chairman.—One question in regard to subhead I—Special Agricultural etc., Schemes—I notice from the note that it is proposed to transfer the glasshouse units under the Gaeltacht Glasshouse Scheme to co-operative societies. Have you any information about the proposed transfer?—There were considerable negotiations with the local co-operative societies but I regret to say the transfer has not yet taken place. I understand that certain legal complications have now arisen which are delaying the transfer further. Of course, in the meantime we are carrying on as in the past.

275. Deputy Treacy.—In regard to subhead K.4.—Grants to certain Rural Organisations—might I ask for the names of the organisations concerned?—There are three in the subhead—the Irish Countrywomen’s Association, Macra na Feirme and Muintir na Tíre. The grant to the Irish Countrywomen’s Association and to Muintir na Tíre was £2,500 each and to Macra na Feirme, £2,000, giving a total of £7,000. I should explain that that is, of course, for that particular year.

Might I ask which were the organisations that were paid less than the moneys estimated and which was the one overestimated?—The excess occurred, if we may call it such, in the case of the Irish Countrywomen’s Association. The excess there was about £224. In the case of Macra na Feirme there was a saving of £345 and in the case of Muintir na Tíre a saving of £945. I should have added that, of course, this is not a grant-in-aid. These grants are related to the actual expenditure of these organisations as it unfolds during the year.

276. Deputy Clinton.—In the case of subhead L.—Botanic Gardens, Glasnevin —in respect of this £35,000, is it a grant-in-aid or does it represent the total cost of keeping the gardens?—It represents, I would say, all of the current loss of running the gardens. For example, it includes all salaries and wages, the purchase of seeds and plants, incidental expenses and the horticultural course which is given at the Botanic Gardens.

There is no contribution at all from the Corporation towards the Botanic Gardens?—No. The Botanic Gardens have always been national.

277. Deputy Booth.—In regard to No. 22 of the Appropriations in Aid the note refers to an excess realised over the amount estimated due to the fact that certain receipts of approximately £4,400 due in respect of semen supplied in the previous year. Is that a common practice or is it unusual that there should have been so much outstanding from a previous year and will there be anything carried forward to the following account or do we get up to date at that stage?—Certainly, these amounts would normally have been received in 1959-60. These were sums due by the Dublin District Milk Board and some A.I. bodies operating in the Ballyhaise area of Cavan and for some reason some delay occurred in the collection of these sums. Possibly there may have been some discussion as to the actual amount due. So, they were not brought to credit until the succeeding year but, normally, of course, they should be credited in the year in which the service was given.

278. Chairman.—In regard to the Account of Receipts and Payments in respect of the Marketing of Agricultural Produce Account, on page 129 of the Appropriation Accounts, I notice that the contribution towards the cost of a turkey publicity campaign in Britain was £5,000. What form did that publicity take?—It took the form of the normal type of advertising by the British Turkey Federation, that is to say, in the newspapers and the commercial television, and so forth but the turkeys were not given any nationality. In other words, I think largely because of our contribution, the publicity was not directed towards “British turkeys” but towards “turkeys”. We felt it would be desirable to give this contribution in the circumstances.

Might I ask in regard to this substantial balance which is available here would you venture any opinion as to when it is likely to be used?—I think that at the moment discussions are being opened with An Bord Bainne and the new Pigs and Bacon Commission because these two bodies will have very important marketing responsibilities and it seems clear that at any rate a substantial part of these moneys should be allocated to them. I hope that will be arranged in the near future. That was really the reason why the money was held. We were awaiting the establishment and functioning of the two new marketing bodies.

279. Chairman.—On page 130 there is the Account of the Dairy Produce (Price Stabilisation) Fund; on page 131 a Statement of Receipts and Payments in respect of the National Development Fund and then there is an appendix, the Balance Sheet of the Dairy Disposal Company Limited and Associated Companies,* of which Deputies have already received a copy.

The witness withdrew.

The Committee adjourned.

* See Appendix XVIII

* See Appendix XIX.