Committee Reports > List of Committees > Dáil > 1963 > Committee of Public Accounts > Report - Appropriation Accounts 1961 - 1962

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 7 Márta, 1963.

Thursday, 7th March, 1963.

The Committee sat at 11 a.m.

DEPUTY JONES in the chair.

Mr. E. F. Suttle (Secretary and Director of Audit), Mr. L. V. O’Neill and Mr. J. R. Whitty (An Roinn Airgeadais) called and examined.

VOTE 42—ROINN NA GAELTACHTA.

Mr. S. Ó Braonáin called and examined.

359. Chairman.—Paragraph 39 of the Report of the Comptroller and Auditor General reads:

“Subhead D.—Scéimeanna Feabhsúcháin sa Ghaeltacht

39. The charge to the subhead comprises:—

I notice that the expenditure on the Heat and Light scheme is much smaller than in previous years. What is the reason for the reduction?—The scheme has really finished. That scheme applied to the islands only and they have all been done.

360. Deputy Clinton.—In regard to the figure of £2,251 for the Glasshouse scheme, is that for new glasshouses or is it for the repair of old houses or the repair of houses that proved unsatisfactory?— I do not think there is anything in that for repairs. I might have the information here but it has nothing to do with the repair of the damage that was caused by the storm about 12 months ago.

Deputy Clinton.—That comes in again somewhere, does it not?

361. Chairman.—I think we will be dealing with it later. Paragraph 40 of the Report of the Comptroller and Auditor General reads:

“40. A number of new glasshouses under construction in Connemara and in South Mayo under the Glasshouse scheme sustained considerable damage as a result of a severe storm in September 1961. I understand that the question of their rehabilitation and completion is the subject of discussion between the Office of Public Works and the contractors.”

Have you anything to add, Mr. Suttle?

Mr. Suttle.—The following is a summary of the position regarding these houses: In 1959 contracts were placed by the Office of Public Works on behalf of Roinn na Gaeltachta for the erection at a cost of £29,636 of 32 aluminium framed glasshouses—20 in Connemara and 12 in Tourmakeady. A further contract in the sum of £7,765 was placed for the installation of heating in these houses and boilers for the heating plants were supplied at a cost of £4,768. When the houses were virtually completed in September, 1961, a severe storm damaged them to an extent that it would apparently be uneconomic to repair them. A settlement was negotiated with the contractors erecting the houses whereby the contracts were regarded as having been completed and the contractors would forgo £3,000 of the sums due under the contracts. The contracts for the heating had been satisfactorily completed. The total payments to date in respect of these houses was £39,837 and I am not aware of the amount of any possible salvage.

362. Deputy Clinton.—This reveals to me a serious situation. It is normal for a building contractor to have his building covered by insurance in the course of contruction. How was it that these contractors were not covered in that way and how is it that it comes back to the Department? Does it point to the fact that our plans and specification and materials were inferior or could be blamed in any way for this storm damage?— That is really a matter for the Office of Public Works because they did the negotiations with the contractors. When it was decided to go ahead with this scheme, and having got Department of Finance approval, we then went to the Office of Public Works and asked them to proceed with the execution of the scheme. They then advertised for tenders, got the tenders, made their contracts and the contractors proceeded with the work under the supervision, of course, of the Office of Public Works. We did not come into the negotiations with the contractors.

Deputy Clinton.—Have we an opportunity to raise this matter with the Office of Public Works? It does not appear as an item that we can deal with with that Office, does it?

Chairman.—Of course, we can recall the accounting officer for the Officer of Public Works at any time. Any accounting officer may be recalled if the Committee feel that there are further questions to put to him. I presume there was some advice taken before these things were settled, or was this settled within your Department? Was there legal advice taken in regard to it?—Which particular matter?

This question of the write-off of the faulty construction or the non-completion? —We did not enter into that side of the matter.

You did not have anything to do with it. Then you had no advice?—No. The Office of Public Works looked after it.

Deputy Clinton.—Could we have the figure of total payments again?

Mr. Suttle.—The total payments to date in respect of these houses was £39,837 but there may be some salvage out of that. I do not know.

Deputy Booth.—This loss falls to be borne under this Vote—is that right?

Mr. Suttle.—It does.

Deputy Booth.—Would it be correct to raise it at this stage in so far as the Office of Public Works were only acting as agents? It was not Office of Public Works property at any stage. So, it would not have to come up, would it, on the Vote for the Office of Public Works?

Mr. Suttle.—No.

Deputy Booth.—So that we have no alternative but to raise it here.

Deputy Clinton.—That is my concern, that we have no alternative way of raising it if it is not accounted for here.

Chairman.—Mr. Ó Braonáin says the Office of Public Works was acting as agent for his Department. I suggest that Deputies might care to recall Mr. Mundow on this matter.

363. Deputy Kenny.—I brought up this matter last year. I understood that before any storm at all occurred the framework of these glasshouses was not strong enough to hold up the weight of glass. That is what I understood in regard to the district of Tourmakeady. The framework either contracted or expanded, thus cracking the glass. We could easily verify that by having the date of the storm because there was a storm some time around that period. From local knowledge, I understand that the framework was not strong enough to withstand the weight of the glass; that it either contracted or expanded, thus cracking the glass; and before the storm occurred at all, I think the Office of Public Works did some alterations buttressing up the sides of these glasshouses to withstand whatever weight was on the frame, which was an innovation, an aluminium framework, not the usual wood.

Mr. Ó Braonáin.—On that point, I cannot tell the Deputy anything very definite but I can say this much, that we have never been informed by the Office of Public Works that any complaints were made to them. They did keep us informed, as the scheme proceeded, of developments, just for our information, but they made no reference to that particular matter.

Deputy Kenny.—This is purely local information?—There were two storms. One storm occurred in November, 1960, which was not unusual as a storm, and it did some damage. That damage was repaired by the contractors. The big storm occurred just as the houses were finished in September or October of 1961.

Deputy Clinton.—The point I was trying to make was that a storm should not be our concern, that it should be covered completely.

364. Deputy Kenny.—Was there ever a crop taken off those houses?—No, not off the new houses.

So, economically, to the applicant, it is a dead loss?—A dead loss, yes.

365. Chairman.—You would not know whether there were any steps taken to prevent further deterioration of the structures due to exposure?

Deputy P. J. Burke.—I do not know of any insurance company that would cover this work against potential loss or damage due to storm. It is a very difficult matter to get insurance cover for glasshouses and even then the insurers would inquire as to whether they were erected in a sheltered spot. It is very doubtful that a contractor erecting glasshouses would get any insurance cover in respect of them, except at a considerably increased premium.

Chairman.—I do not think that we would be concerned with that.

Deputy P. J. Burke.—My colleague here raised the question that the contractor should be covered against such damage.

Chairman.—At last year’s Committee, on 22nd March, 1962, Deputy Kenny, at Question 320, raised this matter. The answer given on that occasion was that the Office of Public Works had allowed for a gale force of something up to 100 miles per hour. Mr. Ó Braonáin is not able to give us any further information in regard to this matter at the moment and there is nothing we can usefully do beyond recalling Mr. Mundow, if the Committee so wishes.

Deputy Clinton.—I think we should have a definite explanation from some source.

Chairman.—We will arrange for Mr. Mundow to come here again on this matter.

Deputy Booth.—Would Mr. Mundow be coming in to give evidence on foot of this particular Vote simply as a contractor to the Department of the Gaeltacht?

Deputy P. J. Burke.—I suppose that is the only way he could come in. It would be better to keep this matter within Vote 42 rather than extend it into the Office of Public Works Vote.

Chairman.—I take it it would be confined to the Office of Public Works as acting for Roinn na Gaeltachta.

Deputy Booth.—Exactly. I think that would be better.

Chairman.—Mr. Ó Braonáin might get an explanation for us and send it to the Committee. The Committee could decide then, on seeing the explanation, what further action they might wish to take.

Deputy Booth.—That might be a better way of dealing with the matter.

366. Chairman.—Mr. Ó Braonáin could obtain an explanation from the Office of Public Works in regard to this matter and submit it to the Committee. Then the Committee could see whether or not they would need to recall Mr. Mundow.

Mr. Ó Braonáin.—The Clerk will transmit the questions to me?

Chairman.—Yes.

Deputy Booth.—The basic question, surely, is, was there any question of insurance against storm damage during construction and if there was not, why not; and was there any proviso in the contract clearly setting out that it was the Department that was going to be liable for storm damage and not the contractor.

Deputy Clinton.—And was there any defect in the specification of materials?

Mr. Suttle.—The information we have was that, as Mr. Ó Braonáin has already mentioned, there was a storm earlier on and some of the houses were damaged and as a result of that a certain amount of redesigning of the houses was carried out and they were strengthened to stand up to storms of 90 to 100 miles per hour. The storm in September, 1961, was completely exceptional, with a wind speed apparently up to 120 miles per hour, which was never known in this country, and these houses just could not stand up to it and the frames were all twisted; the glass was broken; and once the glass broke everything went. With regard to the contractors, the contractors apparently had no insurance against this type of damage and it was a question of negotiating between the Office of Public Works and the contractors as to what would be done. The whole position was discussed backwards and forwards and the final result was that the contractors agreed to, if you like, pay up £3,000 out of their own pockets towards the damage.

Deputy Clinton.—Towards a loss of around £40,000.

367. Deputy Booth.—That brings us back to the question of the form of contract which was constantly commented on. It seems to me most unsatisfactory that when a situation like this arises, which is not completely unpredictable, it should be a matter of negotiation at that stage as to who is going to bear the loss. I agree that the actual speed of the wind in this particular case was practically unpredictable but the whole question of storm damage during construction is something that I would have thought would have been covered in a contract saying the liability for damage would rest either with the contractor or with the Office of Public Works. It seems to me quite intolerable that that should be left a matter of subsequent negotiation.

Deputy P. J. Burke.—In regard to the building of an ordinary house, the contractor is liable for damage caused by the wind. He is responsible.

Chairman.—This matter of form of contracts has been commented on by the committee on various occasions.

Deputy Lalor.—It has been mentioned that as a result of the first storm which has been described as an average or usual or standard type of storm it was necessary to carry out certain repairs to the glasshouses and there were adjustments in the specifications as a result. That would give the impression that there was certainly something faulty in the original specifications. From that point of view it is very necessary that the matter be considered.

Chairman.—Now that the committee has decided that Mr. Ó Braonáin will obtain an explanation from the Office of Public Works and that, if so desired, Mr. Mundow will be recalled, I think we can leave the matter until we return to it on another occasion.*

Deputy P. J. Burke.—The local knowledge, according to Deputy Kenny, is that the framework was not strong enough to bear the weight of the glass.

Deputy Kenny.—That is the local knowledge.

Chairman.—Would you bear in mind, Mr. Ó Braonáin, that the committee is scheduled to finish hearing evidence by the end of the month and let us have the explanation as early as possible?—I shall do that. I understand that the Clerk will put the specific points to me.

368. Chairman.—Yes. Paragraph 41 of the Report of the Comptroller and Auditor General reads:

“41. The expenditure on secondary schools included grants totalling £2,411 towards the travelling expenses of day pupils attending secondary schools in the Gaeltacht.”

Have you anything to add, Mr. Suttle?

Mr. Suttle.—I have no comment to make. It was an extension of the scheme already in existence with regard to national schools. It is extended for the Gaeltacht to secondary schools.

Chairman.—How many schools avail themselves of that travelling grant?— Nine.

369. In regard to subhead C.—Tithe Gaeltachta—I notice there was provision made for four brúnna and only one of them came to be completed within the financial year. What caused the others to be delayed?—We find that the promoters under the scheme are a bit too optimistic. They do not anticipate some of the difficulties that they are likely to meet with and in some cases they do not begin work as early as they anticipated being able to do so.

370. Deputy Kenny.—Must an applicant for a chalet build to the specifications of the Office of Public Works?—I do not think it is absolutely necessary but we do supply a plan. Our inspectors —they are architects by profession and there are one or two engineers among them—would have to approve of the design before we accept it.

Does the grant vary according to the design?—No. There is a certain minimum limit of accommodation, of course. It must provide accommodation for four or five people—I forget which it is. In other words, the size of the chalet is taken into consideration.

This scheme does not operate outside the Gaeltacht, then?—No.

371. Deputy Lalor.—In regard to the Appropriations in Aid I am not too clear as to whether our questions may cover an inquiry into Gaeltarra Éireann or must be confined to the allocation of money.

Chairman.—Questions may be asked on any matter for which the accounting officer is answerable.

372. Deputy Booth.—On subhead N.— Appropriations in Aid—the note on item No. 2—Repayment of Loans—refers to loans in respect of glasshouses. What is the position in respect of the glasshouses that were destroyed? Presumably no loan was made and no liability attaches to the person who was going to become the owner of it? The actual amount realised is in respect of loans granted in respect of glasshouses which did not fall down, which were completed? —That is correct.

373. Chairman.—In regard to Extra Receipts payable to the Exchequer— Deposit received on sale of teacher’s residence—what is the reason for the sale?—This is a very old scheme, started in the 30’s. The idea was to provide accommodation in very remote places for teachers because difficulty was found in getting teachers to go in there for the main reason that suitable accommodation was not available. The Seirbhísí na Gaeltachta Section of the Department of Lands at the time built six houses, some in Donegal, some in Cork, and we took them over. They were let at a rent to the teachers. It was decided about two or three years ago to get rid of them. They were getting a bit old and costing a lot to keep in repair. We decided to sell them to the occupiers. Three have been sold and we are negotiating for the sale of the other three.

The witness withdrew.

VOTE 43—AGRICULTURE.

Mr. J. C. Nagle called and examined.

374. Chairman.—On this Vote, paragraph 42 of the Report of the Comptroller and Auditor General is as follows:

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

42. The expenditure is made up as follows:—

375. Deputy Clinton.—Could we have a break-down of that figure of £805,762 for grants for the construction and improvement of farm buildings, etc.?— Would I break them down on a percentage basis? Would that be the most convenient?

A percentage of the money?—Yes.

Yes. Quite?—First of all, we had byres. That was 15.23 per cent; stables were very small—0.22 per cent.

What are described as stables?—That is accommodation for a horse. The next one is piggeries, which represented 14.38 per cent. Then we have other kinds of livestock houses, that is, excluding horses and pigs—1.32 per cent.

Deputy P. J. Burke—What would they have been?—They might be loose boxes or calf houses and so forth. Grain lofts represented 0.32 per cent and haybarns—a big item—27.89 per cent. Then we had machinery houses, 3.92 per cent and silos 3.55 per cent. We also had a small omnibus item described as produce houses. These would be, stores other than grain lofts which I have dealt with separately, and finally repairs to buildings.

Deputy Clinton.—What is the percentage for produce houses?—3.20. Finally, we had repairs to buildings, 11.98 per cent and there was a miscellaneous heading described as “other works” which were 17.99 per cent. These miscellaneous items would probably cover such items as the concreting of yards.

Outside?—Yes.

376. As a matter of interest, is there any grant for housing for mink?—I do not recollect any specific scheme of grants for the housing of mink but it is possible that if the question was raised it might be included.

Included under some heading?—Yes.

377. Deputy Kenny.—I should like to ask a specific question regarding a particular instance. You now pay £9 per animal under the byre grant, is that not right?—That is right.

You used to pay £12?—I think the position was—

Chairman—We are moving away from fact to policy as to why this was changed.

Deputy Kenny—I am only dealing with a specific instance. I just wanted to find out for my own information. Would a person who had applied before the change was made but did not build the byre be eligible for the £12 grant?—The £12 grant was what was described as the double byre grant. The normal grant was £6 but the normal £6 grant was increased to £9 a couple of years ago. The double byre grant arrangement, that is to say. the £12 grant, was terminated in February, 1958 but applications which had been received prior to that date would be allowed subsequently provided that they were completed within a reasonable period. In some cases that has been the case and in other cases the applicants, for one reason or another did not go forward with their works of building or reconstruction.

What would you term a reasonable period?—I would say that if nothing had been done within, say, the past year one would be inclined to think that nothing was going to be done.

I understand that perfectly but suppose your inspector called to this applicant and said he could not get the grant for which he applied—supposing he called some time ago—would not that put the applicant off building?—I suppose it might be—

378. Chairman.—If it is a specific case the Deputy had better see Mr. Nagle at a later stage. Paragraph 43 of the Report of the Comptroller and Auditor General is as follows:

“Subhead K.7.—Land Project

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

379. Deputy Clinton.—The salaries, wages and allowances and travelling expenses appear to me to be a very high percentage of the total grants paid. Would the Accounting Officer like to comment on that aspect? These items amount to approximately £374,000 on an amount of approximately £1½ million?—Of course, it is rather difficult for me to make a very positive comment on that point but I think I should add that the Land Project by its nature requires a very considerable outdoor staff. Most of the expenditure on salaries, wages, and so forth, is for the salaries, not of what I would describe as very senior people, but for the very large number of men whose salaries I would say, individually. are not very high.

Very low you may say, perhaps?—Yes —who actually do the day to day work on the project under the supervision of the senior people. We have between 250 and 300 of these fieldmen continually occupied on the project and I suppose it is a matter really of balancing between economy in staff and ensuring that the field work goes ahead efficiently and is properly carried out. Of course, opinions might well vary as to where the correct balance may be struck at any time. The Land Project work is rather difficult by its very nature and we find that quite a number of repeated visits are necessary on the part of our outdoor staff and of course that does, naturally, raise the labour cost and content. A similar explanation would apply to the travelling expenses.

380. Deputy Lalor.—The figure of £2,954 for advertising and publicity is a peculiar figure. I have been checking and I find the figure for the previous year was £1,888. This figure shows an increase of over £1,000 while the amount of money paid out by way of grants to farmers dropped by about £90,000 on the previous year and that, again, represented a drop of £50,000 on the previous year. I am wondering how the advertising and publicity expenditure had gone up to such an extent. What was the necessity for it? How did it arise?—I should say, first of all, that this item includes stationery and other office incidentals as well as advertising and publicity. I would admit that the description here is rather a misnomer but I understand that a substantial percentage of this figure is for the stationery used in the Land Project and other office requirements of that kind and I do not think the actual expenditure on advertising showed any appreciable increase but, of course, if the Deputy wishes, I will get the exact figure and send it to the committee.

Yes. My argument would still hold in so far as the expenditure of an additional £1,000 on your normal paper requirements covering the issue of a smaller amount in grants?—Of course, it is true that if we assume that there was the same expenditure on stationery in the two years then there would have been an increase in the cost of advertising and publicity but what the exact breakdown of the figures is I should not like to say categorically yet. May I add this point, that the actual expenditure on grants in a particular financial year may not quite represent the actual intensity of the work in that year because a good deal of the work in a particular year will not show results until a subsequent year? So, comparisons, for that reason, are rather difficult.

Could we have a break down?— Certainly.

Would it be possible to include the break-down on the £1,888 for the year before?—Yes, certainly.*

381. Chairman.—Paragraphs 44 and 45 of the Report of the Comptroller and Auditor General are as follows:

“44. 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 £1,528,115 in the year as compared with £1,616,240 in the previous year.

Subhead K.8.—Lime and Fertilisers Subsidies

45. 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.”

382. Deputy Clinton.—I would be interested in this subsidy on delivery cost of ground limestone and other suitable forms of lime. In what way is that arranged? Is it a per ton per mile subsidy or in what way is that arranged and checked?—The principle behind this subsidy is that we pay the full cost of the actual transport. We do not subsidise the manufacture of the produce itself; we subsidise only the cost of the transport. Transport is generally handled by CIE and we cover that bill now in full. At one time we charged 4/- per ton to the user of the ground limestone but that imposition, so to speak, was removed a couple of years ago. We do, of course, limit the distance on which we pay subsidy. For example, there is a limit of 35 miles in Wicklow and Wexford and 30 miles in most other counties, that is to say, 30 miles from the actual manufacturing plant. Within that radius the State takes on responsibility for paying the actual cost of transport. If it is a matter of interest, the average cost of the subsidy per ton in 1961-62 was 11/2d.

Have you a figure for average distance hauled, by any chance?—I am afraid I have not but my recollection is that the average distance hauled would be, on the whole, considerably less than the maximum radius of 35 miles and 30 miles which I mentioned.

383. Chairman.—To what extent has the subsidy on fertilisers increased the use of fertilisers by farmers?—We think that it has worked out quite well. I have some figures here, if I may read them out, which compare 1962-63—if I may use the current year—with 1957-58. First of all, may I say the subsidy was introduced in 1958, so I think I may take the financial year just prior to that for purposes of comparison. In 1957-58 the total consumption of phosphatic fertilisers of all kinds was 27,100 tons in terms of phosphorous content and in 1962-63 we estimate the figure will be 42,000 tons phosphorous. Then, if we take potash fertilisers in terms of K, consumption went up from 43,500 in 1957-58 to 70,000 tons in 1962-63. That gives an increase in the use of phosphates of well over 50 per cent and an even higher increase in the case of potash.

Deputy Clinton.—That is a satisfactory result, in any case, whatever it is due to.

384. Chairman.—With regard to the last sentence of the paragraph:

“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”,

would you say the profit margin in the fertiliser industry has altered in any way since the subsidy lowered the price?— This aspect of the matter is really looked after by the Department of Industry and Commerce. The rate of profit being earned by the industry is investigated annually by the Department of Industry and Commerce who, I understand, have satisfied themselves that the position is reasonably satisfactory. That is my understanding. It is the work of another Department.

385. Paragraph 46 of the Report of the Comptroller and Auditor General reads:

“Subhead K.11.—Bovine Tuberculosis Eradication Scheme

46. The expenditure is made up as follows:—

Receipts from the sale of cattle slaughtered under the scheme amounted to £1,787,664 for the year and were credited to appropriations in aid.”

386. Deputy Clinton.—In regard to the compensation for reactor cattle, how does the loss per reactor compare with the loss in the previous year? Have we any comparative figures on that?—Yes. For cows, the loss—that is, the difference between the price we paid and the salvage value—was £29 1s. 8d. per head in 1961-62 and in the previous year it was £28 1s. 4d., that is, an increase of roughly £1. On the other hand, in the case of reactors other than cows, the loss went down from £20 5s. 3d. to £18 14s. 5d. per head.

387. Deputy Lalor.—According to the paragraph last year the average loss per cow reactor was £25 19s. 11d. Would that be an average? That was the figure given to this Committee last year?

Deputy Clinton.—Mr. Nagle gives £28 1s. 4d. as the loss in last year.

Deputy Lalor.—£25 19s. 11d. was the figure given, I understand, when this question arose last year?—The correct figures, I am now advised, are those I have read out. Maybe there was some revision at the end of the financial year.

Chairman.—I take it Deputy Lalor is going by what was quoted at Question 251, on page 59 of the report of the Committee of Public Accounts for last year?

Deputy Lalor.—Yes. That is the figure given for average loss per cow reactor.

Chairman.—On that occasion the average loss per cow reactor for a number of years—1954-55 to 1960-61— was quoted by Mr. Nagle. The figure for 1960-61 was quoted as £25 19s. 11d. I take it that is the figure you are referring to, Deputy Lalor?

Deputy Lalor.—Yes.

Chairman.—Mr. Nagle says it may be a revised figure that he is now giving us. Is that a revised figure?—It certainly is a figure which has been recently computed for the two years 1960-61 and 1961-62.

388. Deputy Lalor.—That would show an extraordinary jump. The figure the previous year was less than that. The figure for 1959-60 and 1960-61 had shown a big jump on previous years. That was commented on. The figure now given would show a jump of £2 1s. 5d. from the figure mentioned at that time.

Deputy Booth.—Is this figure governed by the market price ruling from time to time? I presume it is, in which case it is possible, I suppose, that there was a sudden drop in the British market price.

Chairman.—Deputy Carter referred to this matter last year. He said that he noticed that the rate of loss rose fairly steeply because of the purchase of a higher proportion of good milch cows. I presume that would have had something to do with it?—Yes.

389. Deputy Kenny.—How is the value of a reactor assessed?—That is provided for in the Bovine Tuberculosis Eradication Act. By law, the valuer must value the animal as a going concern and as if he had no knowledge of the fact that it is a reactor. I think that is what the law states on the matter. So, he values the cow for its value as a dairying animal and he must put out of his mind the fact that the cow is a reactor. I would, of course, be very glad to re-check these figures subsequently but certainly, the figures of net loss of £28 1s. 4d. for 1960-61 and £29 1s. 8d. for 1961-62 are figures which have been taken out for me quite recently. I will certainly enquire about the apparent discrepancy*

Chairman.—Yes.

390. Deputy Kenny.—In regard to the fees to veterinary surgeons, would these fees be for examination and tagging of reactors?—They cover the two visits a veterinary surgeon must pay in connection with the testing. First of all, the veterinary surgeon goes out to the farm and injects the tuberculin and then has to come back in 48 hours to do the readings. So, there are two visits covered in the fee. Also, the fee has to cover any travelling expenses of the veterinary surgeon. There is no separate allowance for travelling expenses to the veterinary practitioners and if the veterinary surgeon requires, as he might occasionally, some help in marshalling the animals together for tests—sometimes it is a troublesome kind of business—he has to look after that together with the assistance of the herd owner, of course, and if he requires any clerical assistance in keeping his records right, because naturally we have to demand quite a good deal of paper work from the veterinary practitioners, the fee is regarded as covering that also.

391. The veterinary surgeon does not tag calves?—He does, yes.

I understood it was the parish agent that did that—not the parish agent—? —The lay inspector, or someone?

Yes?—That might be at a different stage. That might be at the time of the purchase of a reactor, or removal.

I am speaking about calves?—Calves.

The veterinary surgeon does not tag calves now, does he?—He does, yes. It is his general responsibility to tag the animal on testing it. There is a whole lot of other tagging arrangements which have to do with the purchase of the animals by the Department where we come into the picture, naturally enough, but in relation to a tuberculin test, the veterinary surgeon has to identify the animal by tagging. The Deputy may remember that originally tattooing was relied on as the main method.

Deputy Kenny.—I understand but I understood that the calves were tagged by your agent from the Bovine Tuberculosis office. The young calves are tagged and recently a circular issued from the Department stating that in future the calves would be tagged by the veterinary surgeons.

Chairman.—I think we shall have to confine ourselves to the details for which Mr. Nagle is accounting, that is expenditure. We are verging too close to the line of policy. The Deputy will have to pursue that matter at a later stage. Mr. Nagle is here to account for the expenditure and we will have to confine ourselves to that.

392. Deputy Lalor.—On the question of accounting for expenditure, in respect of fees to veterinary surgeons, did the fees go up during this year, 1961-62, or has it remained a standard fee?—There has been no change in the amount of the fee since it was introduced in 1954 at the beginning of the scheme but, of course, the expenditure on fees has naturally risen quite a lot. The actual fee has never changed.

Deputy Lalor.—There again I notice the comparisons. You have already set out fees to veterinary surgeons during the year under review at £1,477,432. That has gone up by £200,000 whereas the amount of money spent by way of compensation for reactor cattle has dropped by that figure. I take it that that covers a lesser number of cattle than the same amount of money would have covered in the previous year in view of the fact that we are paying a bigger price per head.

Deputy Clinton.—As least, the figures indicate that there was a much smaller number of reactors in a particular area but a much bigger number tested by the veterinary surgeons?—Actually, the number of tests did increase in, of course, exact proportion to the increased cost because the rate remained the same.

393. Chairman.—Paragraphs 47 and 48 of the Report of the Comptroller and Auditor General are as follows:

“47. The gross cost of the scheme from its inception in September 1954 to 31 March 1962, including expenditure charged in this year to subhead K.K.11, was £30,605,891 and receipts from the disposal of cattle for slaughter were £9,102,833. The net cost was therefore £21,503,058.

48. Under the headage grant scheme in operation in the Six Southern Counties the Department pays a grant of £15 on each cow reactor sold by a herd owner to a licensed cannery or to a canner’s agent. The Department’s officers at the licensed canneries were unable to confirm the receipt and slaughter at the canneries of 850 of the cow reactors disposed of to canners’ agents. In view of the terms of the scheme it was decided, with the approval of the Department of Finance, to pay headage grant in respect of these cows on condition that they are not in the herds of origin and that documentary evidence of their sale to canners’ agents is available. The consequential charge (£12,750 approximately) is included in the subhead.”

Have you anything to add, Mr. Suttle?

Mr. Suttle.—This is unvouched expenditure in view of the fact that the animals could not be traced. The scheme provided for the payment of a grant on the animals being sold and slaughtered in the canneries but the animals could not be traced in the canneries. There was evidence that they had been sold to agents but they could not be traced in the canneries. The Department is satisfied that the owners had disposed of the animals.

394. Deputy Clinton.—Does this indicate that the Department’s officers at the licensed canneries were not doing their job efficiently? It seems a biggish number of cattle to be completely lost sight of. If they check every beast that comes in there as a reactor it seems strange that there should be a discrepancy of 850 cattle. Are we completely satisfied with the evidence that we have got that they did in fact reach the canneries and were sold as reactors?

Deputy Booth.—Following on what Deputy Clinton has been saying, as I understand it, the position is that a certain number of cattle were sold to agents. Is the position that nobody knows or nobody can now prove what the agent did with the cattle? If that is correct, does that mean that there is a danger that those cattle were bought for slaughter and had not been slaughtered either in a cannery or anywhere else and are back in circulation again?—May I say, first, not indeed by way of palliation of this matter, but just as a fact, that the 850 cows, while it may seem a large number, must be regarded against a figure of the best part of 100,000 cows handled.

Deputy Clinton.—Even so?—Why the payment had to be made was simply as follows: We were advised by the legal advisers that where a farmer could produce the correct documentary proof that he had parted with a reactor, we were under contract with the farmer to pay him the £15 headage grant which seems reasonable enough from the farmer’s point of view. In these particular cases we were satisfied from documentary evidence that the farmer in fact had parted with these animals. He was expecting the £15 and, of course, when it did not come, he naturally inquired from us as to what had happened. Our people then made inquiries from the factories and, unfortunately, in these cases we could find no positive proof of the arrival of these cows. There are various possible explanations. First of all, there might have been a question of indistinct tattooing by the veterinary surgeon. There might have been failure by the agent to apply properly the scissors mark which he was supposed to apply to the cows when he took them over from the farmer or there might possibly on occasion have been a mix up of papers, for example, the wrong reactor card might have been forwarded with the animal to the factory. We do not think there is any possibility here of, so to speak, double payments because we can only pay the owner of the cow and we have full particulars of the owner and we have his documentary proof of parting with the cow. As to what happened these 850 cows, it is very difficult to say. It is possible that quite a number of them in fact reached factories but were, maybe, recorded as ordinary cows and not as grant cows. There was also a suggestion that certain irregularities may have been going on in some quarters, that for some reason or another it might have suited a person to take the cow from the farmer, giving him the necessary receipt, but not send the cow to the cannery, perhaps retain the cow, if she was a good animal, apart from tuberculosis, and get a calf from her. Certain rumours to that effect did circulate and the police were asked to look into all such cases because even though we did not believe there was a financial aspect involved directly for the State, there would have been a rather important breach of the regulations, in fact, an abuse of the regulations. In one case a conviction was secured and a man was fined £2,000, which was quite a hefty fine, and our general rule in such cases is that where sufficient evidence is found prosecution will follow automatically.

395. Deputy Booth.—Is there any way in which there can be greater control over the canners’ agents? That appears to be the loop-hole at the moment or appears to have been the loophole which existed up to now?—In fact, further precautions were taken as a result of these occurrences. For example, we arranged to have all reactors tagged with specially numbered tags and discs so as to facilitate identification. Then we notified farmers and canneries, in October, 1961, that the reactor cows received in the canneries which were not ear punched, tagged and disced would not be eligible for headage grants. We believe that this had satisfactory results though I think it is only right to say that a small number of similar cases have turned up subsequently—very much less than the 850.

Could it be that if we were going to get an absolutely 100 per cent check the expense involved would be quite uneconomic?—Yes, I think you could reach a stage where that would certainly be the case. Of course, this headage scheme was terminated last autumn. We are now directly purchasing all these cows ourselves.

Deputy Kenny.—And the matter does not arise?—At the moment, no.

396. Chairman.—Paragraph 49 of the Report of the Comptroller and Auditor General is as follows:

“Subhead K.K.11.—Bovine Tuberculosis Eradication Scheme—Guarantee Payments in respect of Export of Fat Cattle and Carcase Beef.

49. The guarantee payments made in the year are as follows:—

As mentioned in paragraph 55 of my previous report guarantee 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. Payments to exporters varied weekly in relation to the level of guarantee payments in Britain. A rate of 13s. 6d. per live cwt. on eligible fat cattle in early April 1961 increased to 44 shillings per live cwt. towards mid July. But from 31 July 1961 it was decided to limit the guarantee to a maximum of 20s. per live cwt. and from the end of September the rate payable was below this maximum.”

In regard to this scheme, designed to provide an outlet for farmers with uncertificated fat cattle, I notice that the subsidy was paid to the exporters. How was the Department satisfied that such payments to exporters are fully incorporated into the market price level at which these exporters purchased these cattle?—The scheme was to an extent an emergency one because, in 1960, we were confronted with quite a difficult situation due to the closing of the British market to all except attested or 14-day tested cattle. Our tuberculosis scheme at that stage had not advanced far enough to enable us to have very large numbers of either class of cattle and we knew that considerable numbers of cattle, which would probably be reactors, would be turning up that year for which no export market apparently was in sight and at the same time we were tending to close the home market for such store cattle by developing the attestation of the West and the midlands. It was decided that some kind of a general support should be given to these cattle and for a limited period it was not considered practical to work out any other scheme than payment at the export point. It is perfectly true that except in the minority of cases where the owner of the cattle, the farmer, would be the exporter, the payment went to persons other than the original owners, the farmers, but there is a fair amount of evidence that, in fact, the subsidy scheme did help to maintain the price at farmer level. In that particular year, and especially, I think, in 1961, there were serious falls in the price of beef and cattle in the British market and a comparison of the trend of market prices in Britain at that time would indicate that this scheme had an appreciable effect in preventing a catastrophic decline in farmers’ prices here, particularly, I would say, from about the month of May or June, 1961, until the autumn of that year. Of course, there are a great many exporters of cattle in this country and it is a rather competitive trade and I think the competitive element should have helped to disseminate the subsidy payments down to the producers themselves.

That is the point I want to get at, that the Department are satisfied the subsidy did pass down to the farmers?—Yes. Generally speaking, we think it did.

397. The rate of subsidy increased to 44 shillings and from 31st July, 1961 it was decided to limit the guarantee to a maximum of 20s. per live cwt. Were there any particular considerations that led to that decision?—It was very largely in consideration of the enormous cost of the subsidy, which I must admit was many times greater than we had visualised at the outset, and that cost was due to the slump in Britain which, again, we had not anticipated nor had the British themselves.

Deputy Clinton.—There were very heavy exports, I think, also?—Tremendous exports that year.

Chairman.—You could not give us an estimate of what was charged to the subhead as well as that?—Not offhand but I could get the figure.*

398. Chairman.—Paragraph 50 of the Report of the Comptroller and Auditor General is as follows:

“50. In reply to my inquiry concerning irregularities in regard to guarantee payments I was informed that overpayments arising from irregular claims by certain exporters under the scheme amounted to £7,287 and that unpaid claims to a face value of £30,000, approximately, are retained by the Department pending investigation of all doubtful claims.”

Mr. Suttle.—The procedure under this scheme required that cattle for export be weighed at approved weighing centres under the supervision of the Department’s certifying officer who entered on a claim form submitted by the exporter particulars as to numbers, weight, etc., and put an identification mark on each animal. The claim form was then handed back to the exporter or his agent for tendering to the Department’s portal officer when the cattle were presented at the port for shipment. The portal officer endorsed the form indicating that shipment had taken place and submitted the form to the Department so that payment of subsidy could be made. Apparently when the claims forms were handed back to the exporters after the weighing of the cattle alterations were made in the weights shown on the forms. These alterations were not discovered by the Department at the time of payment but came to light in November, 1961. All claims from 1st May 1961 onwards were then re-examined. Where an irregularity was detected in any claim, all claims by that particular exporter from the inception of the scheme were checked against weighbridge dockets.

399. Chairman.—What is the position in regard to these irregularities now?—The position is as stated here. We believe we have sufficient information to indicate that there are irregular claims amounting to that amount of money by certain exporters and we have held up payments to the same exporters of a value several times that figure, on legal advice. We have been advised that we are entitled to withhold the larger sums which would otherwise be due to these exporters because of the fact that they apparently indulged in these irregular alterations of the forms. I may add that all these cases were notified to the police for action if they could find legal evidence. There will not be any financial loss to the State here.

Deputy Clinton.—You can state definitely that there will be no financial loss? —Yes, because of the difference between the amount represented by the irregularities and what our total indebtedness to these exporters would have been if there had been no irregularities.

You owe them sufficient money to cover it?—A great deal more than they owe us.

400. Deputy Clinton.—Have these people been brought to court?

Chairman.—Mr. Nagle has said that these cases have been submitted to the police for appropriate action.

Deputy Clinton.—Have any of them in fact been brought to court already? Have you caught up with any of them?—I do not think any of these cases has yet reached the court stage. There was, of course another prosecution involved in the port of Dublin but that was in respect of the passing off of cattle as attested, which is rather a different thing.

401. Deputy Kenny.—How many such cases would there be?—The number is not enormous really—something like 13 or 14 exporters, in all, concerned.

Deputy P. J. Burke.—What would be the number of licensed exporters altogether?—Anybody is free to export cattle. There is no licensing provision but the number of exporters who submitted claims under the scheme was 241.

402. Chairman.—Paragraph 51 of the Report of the Comptroller and Auditor General is as follows:

“51. The scheme requires that documentary evidence of export should be furnished in support of claims for exports of processed meat. It was noted that some payments were made in respect of such meat prior to export and I have inquired whether proof of export is now available.”

Have you anything to add, Mr. Suttle?

Mr. Suttle.—The scheme of Guarantee Payments when first brought into operation in July, 1960 did not apply to processed meat but following representations by the Irish Fresh Meat Exporters Society Ltd. amendments were made in the scheme in September, 1960 and processed meat then became eligible for guarantee. The scheme required that each claim for guarantee on carcase beef must be supported by documentary evidence of export. The Department however decided to pay on processed meat at the time of processing and putting into store rather than at the time of export which might be several months later, as it was considered that it would inflict a hardship on processors to be out of pocket for the interval pending sale. In reply to my inquiry seeking evidence of export of this meat, the Accounting Officer has informed me that there was no sale in this country for boxed boneless beef which constituted the vast bulk of the meat processed; and that the records which the Department required to be kept at the factory and which were supported by certificates from the Company and the Department’s Veterinary Officer indicate that none of the processed meat on which payment was allowed was subsequently sold on the home market. In other words, it was negative evidence of export. There was no direct evidence of export but none of it was sold on the home market.

403. Deputy Clinton.—Is it not possible to have an arrangement whereby positive evidence could be obtained?— If I may try to explain this matter, the inclusion of this processed meat, which to all intents and purposes was this boxed boneless deep frozen meat, in the scheme was agreed to as a result of representations from the meat exporters to the effect that as we were subsidising live cattle and carcase meat in the form of quarters and not paying any subsidy on the same kind of meat, that is, bullock or heifer meat which was being packed in a special way for processing, we were therefore hitting that export trade, which was quite an important one so far as the German and other markets were concerned. It was agreed that it was reasonable to include this processed meat in the subsidy scheme and then the question arose as to how you would check the export because in this case the usual practice is that the meat is processed, boned out, put into these boxes, frozen very hard but not exported, maybe, for months after the time it has been processed. For example, a factory may be fulfilling a long term order from America or Germany which says, “You will send us so much every month but no more.” and would buy at the market time it suits it to buy and can, of course, hold this meat indefinitely because it is hard frozen. If we had held up all payments on this until export the man would have been out of his money for maybe up to three or four or five months. But, there was another point which I should like to mention also, if I may, and that is that there is another form of boxed boneless meat exported in large quantity, namely cow meat. The subsidy was applicable only to bullock and heifer beef and my Department felt that relying on export proof months after the processing had taken effect would be quite a ticklish problem. It would have meant asking customs officers to distinguish between different boxes as to their contents, as to whether they were processed cow beef or processed bullock and heifer meat. The matter is a bit technical and it was felt that, provided our own veterinary man and his assistants in the factories followed through the actual processing in the factories, which they were instructed to do, and provided the factory owner was compelled to keep detailed records, which he was, and those records were inspected by the veterinary examiner, and because of the way in which our Department is intimately associated with the running of every meat factory—we have to have a man there all the time, as you know— that probably would be a better proof of export, even though some of it, admittedly, related to future export. There is no home market for boxed boneless meat. I do not think it is in demand at all. That is the other point.

Deputy Clinton.—That is a very good explanation.

Deputy P. J. Burke.—A very good explanation.

404. Chairman.—Paragraph 52 of the Report of the Comptroller and Auditor General reads:

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

52. Grants to creameries towards the cost of appproved pasteurising plant and can-washing equipment amounted to £38,922 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 61).”

Deputy Carter.—How many creameries, roughly, availed themselves of these grants?—I think the lot. I have a figure here that the total number of applications was 553 and eight of these were for can-washing equipment.

Deputy Clinton.—Pasteurising was compulsory?—Was made compulsory. So, every creamery is now equipped.

405. Chairman.—Paragraph 53 of the Report of the Comptroller and Auditor General reads:

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

53. 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. The original provision of £550,000 was revised in a supplementary estimate to £1,550,000. But it was found necessary to pay a contribution of £1,850,000 in the year. The Pigs and Bacon Commission was reorganised under the Pigs and Bacon (Amendment) Act, 1961.”

406. Deputy Clinton.—There are a number of changes here in the estimate. The original provision was for £550,000 and that was revised to £1,550,000. I was just wondering why the original estimate was so far short of requirement? —I am afraid the fact is that we were too optimistic in our forecast of prices on the British market which showed much weaker tendencies during the year than we had thought possible at the beginning. That was the main explanation. Also, I think, pig production remained rather buoyant during this year and these two factors accounted for the fact that we certainly made a very, very poor estimate of the cost here.

Have you a figure for the contribution from the levy towards this export loss?— To date the proceeds of the levy would at this stage be, I should think, somewhat less than half the gross total cost. The original intention was that they should meet the cost 50-50, that 50 per cent would come from levy and 50 per cent from the Exchequer but in the past year the amount falling on the Exchequer has outpaced the amount falling on the levy.

407. Chairman.—Paragraph 54 of the Report of the Comptroller and Auditor General is as follows:

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

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

Have you available as yet the overall position in regard to the 1960 wheat losses?—The figure is not quite finalised but it will be very, very near the figure mentioned in paragraph 55, probably about £2,000,000.

408. Chairman.—Paragraph 55 of the Report of the Comptroller and Auditor General reads:

“55. Reference was made in paragraph 63 of my previous report to the arrangement under which An Bord Gráin would purchase and dispose of so much of the 1960 wheat crop as was not utilisable for milling into flour. I understand that the total quantity purchased was 243,628 tons. The accounts of An Bord showed net losses at 31 August 1961 of £1,953,304 towards which £1,950,000 has been advanced.”

Deputy Clinton.—What exactly is meant by these ex-gratia payments in respect of the 1958 wheat crop? That seems to be going back a long way?—We had, of course, a very poor wheat crop in 1958 and, among special measures taken was a decision to pay a kind of bonus on rejected wheat which varied with the moisture content. For wheat with a moisture content of 22 per cent or less the bonus was 5/6d. a barrel and that fell to 3/- for moisture content exceeding 22 but not exceeding 25 per cent and for moisture content exceeding 25 per cent it was 2/- a barrel. These payments have been dragging on for some little time because sometimes there was some difficulty in tracing growers, and so forth.

409. Chairman.—Paragraph 56 of the Report of the Comptroller and Auditor General is as follows:

“Subhead N.—Marketing of Dairy Produce.

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

In regard to the item for export loss content of butter stocks held by the Butter Marketing Committee and creameries on 1st August, 1961, how was the loss calculated in advance of the actual export?—What happened here, so far as I recollect, was that there was a once and for all settlement in regard to these stocks of butter which had been accumulated before An Bord Bainne became responsible for their marketing in August of that year. It was felt that it would not be quite fair to this new board at a time like the month of August when the current production season is well advanced, to have handed over to them at the outset of their career the full responsibility for butter manufactured before they got these legal responsibilities. So, what was done then was to value the stocks which were handed over at the then market price in Britain and the value of the stocks was written down accordingly and the stocks were transferred to the board on that basis, so that there was no need for any subsequent re-calculation. In other words, it was agreed that whether export prices moved up or down the transaction would be regarded as closed. We thought things would be very difficult for the board unless they were absolutely certain of their position from the outset in regard to these stocks. The one stipulation was that, if home consumption between August and the end of the following March should exceed home production, an appropriate adjustment would be made because, in that event, butter would have been pulled off the export market and sold at the full price at home but, in fact, production during the rest of the year was considerably higher than home consumption. So, that clause had not to be invoked.

410. In regard to item No. (2)—Grant to An Bord Bainne under Section 32 of the Dairy Produce Marketing Act, 1961 —on what basis was that grant arrived at?—In this case this would have been very provisional. The board came into operation during the financial year. We had been administering the matter up to then and, obviously, all we could do at that time was to make a very approximate payment on account to the board. The exact position about the board’s losses cannot really be known until their accounts for any particular year are closed. So, all these payments really we regard as payments on account.

411. Deputy Clinton.—With regard to payments to manufacturers on exports of certain milk products other than butter —would that be all other milk products— chocolate crumb, milk powder, condensed milk, cheese?—That is right, yes.

412. Chairman.—Paragraph 57 of the Report of the Comptroller and Auditor General is as follows:

“57. Reference was made in paragraph 65 of my previous report to an increase in the price of creamery milk as from 13 April 1960 and to the decision to make good by subsidy payments to manufacturers the increased cost of the milk content in exports of certain milk products. A subsidy towards freight costs was also paid on exports of chocolate crumb to Britain and the Six Counties. The payments made refer to milk products exported prior to the establishment of An Bord Bainne.”

Deputy Clinton.—In what way was the subsidy towards freight costs paid on exports of chocolate crumb to Britain arranged? On what basis was it paid?— It was paid in consideration of the cost of the freight to Britain.

Roughly, what percentage?—I do not know offhand.

413. That would apply to all chocolate crumb exports?—It would, yes. The idea behind it was to remove any disadvantage under which the chocolate crumb manufacturers may have laboured because of their distance from the export market. That was really the basis for it and, of course, originally was prompted by the fact that the price for creamery milk was increased by around 1.3d. per gallon in April, 1960, and that, of course, affected the competitive position of not only the chocolate crumb industry but of other dairy industries here.

It did not really affect the position of the chocolate manufacturers who were buying the surplus milk in the Dublin area?—It would depend on what price they were paying at the time.

They did not change that price?—That may be so but I do not imagine it made their position any easier.

Deputy Clinton.—That is a matter of policy again, in any case.

414. Chairman.—Paragraphs 58 to 62 of the Report of the Comptroller and Auditor General are as follows:

“58. An Bord Bainne was established under the Dairy Produce Marketing Act, 1961 on 17th May 1961 to develop and improve export marketing of Irish dairy products and to ensure that milk for manufacturing purposes is put to the most profitable uses. The Act also provides for the dissolution of the Butter Marketing Committee and for the transfer of all assets and liabilities of the Committee to An Bord. The dissolution and transfer were effected on 1 August 1961.

59. It was decided to meet from the Exchequer the full estimated export loss on the butter stocks held by the Butter Marketing Committee and the creameries on 1 August 1961, subject to a reduction in respect of any excess of home consumption of butter over production in the period 1 August 1961 to 31 March 1962. The total stocks held were ascertained to be 220,560 cwts. and the calculated loss was £2,502,031 of which £2,430,000 was paid on account in the year to An Bord.

60. A grant may be paid to the Board in each financial year under section 32 of the Act out of moneys provided by the Oireachtas but a grant shall not be used to defray more than two thirds of

(a)any loss incurred by the Board in relation to the export of milk products by the Board, or

(b)any subsidy, grant or other like payment made by the Board in relation to the export of milk products.

The grant paid under this section amounted to £475,000 in the year.

Subhead P.—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

61. The amounts allocated and the recoupments from the American Grant Counterpart Special Account of expenditure incurred up to 31 March 1962 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

62. The income of the Fund derived from levies on creamery butter, amounted to £486,329 as compared with £475,738 in the previous year.

The payments from the Fund were as follows:—

Does the Department continue to administer this Dairy Produce (Price Stabilisation) Fund?—I think it is provided in the Act under which the Board was established that this fund will be wound up and, in fact, we hope it will be possible to do so before very long but apparently the winding-up is quite a complicated matter and may take quite some further time. We certainly hope it can be done during the coming financial year.

Deputy Booth.—Does that mean that at present this fund is being administered by the Board and that all that the Department is doing at the moment is winding up its assets and liabilities?— As it is a statutory fund, as long as it is there, unfortunately, we have to manage it but what we do in managing it is, to a large extent to act as agents for An Bord Bainne, for example, collect certain moneys which are then paid over to An Bord Bainne.

So that the Department is to that extent losing control over the fund?— Of course, it has to be administered in accordance with various Acts of Parliament and subject to audit.

415. Chairman.—The explanatory note in relation to subhead C.1.—Seed Testing, Propagation and Certification, etc.— would indicate that as a result of the bad weather of 1961 seed propagation, wheat particularly, suffered a severe setback?—It did affect it, I am afraid, and that is to an extent an explanation of the saving that was made here.

416. Deputy Clinton.—In regard to subhead C.2.—Veterinary Research—have the staff vacancies referred to in the explanatory note been filled?—Yes. I am very glad to be able to report to the Committee that the position has improved a great deal in the last year. On 1st March, 1962, the total staff at the veterinary laboratory level was 19 and at present it is 32. We have a competition pending and we hope we will be able to build up the numbers quite rapidly during the coming year. As the Deputy knows, the difficulty in the past was that the pressure of the Bovine Tuberculosis Eradication Scheme on the veterinary profession, both practitioners and officials, was really overwhelming but we are now beginning to see daylight.

417. Chairman.—In the explanation of the savings on the subhead there is reference to discontinuance of the heifer replacement scheme. Could you say to what extent the demand was fulfilled? —My recollection is that there was not really any very strong demand for the scheme. At the time it was introduced people were stressing the difficulties of finding replacement heifers but, in fact, when we tried to do something about it people, for the most part, were able to look after their own requirements.

418. Deputy Clinton.—In relation to subhead C.5.—Live Stock Progeny Testing —are you satisfied with the progress or are you still short of staff to carry out the work?—So far as the scheme has gone, and, of course, it is a comparatively new scheme, we are reasonably satisfied. All of the artificial insemination stations now are participating in this progeny testing scheme and we, of course, make a payment at the rate of £400 a man for four recorders employed by each station. During this year we did provide for 33 recorders but only 28 were employed. The scheme has been working reasonably well and I understand that already a number of bulls have been proven by means of it but we would certainly like to see it growing even further in future.

About what number of bulls—50?— About 50 is the figure I have, yes.

419. Is there any date for the completion of the second pig progeny testing station?—I am afraid we have made so many wrong forecasts in the past about this that, apart from being a civil servant, I would hate to commit myself again but, with normal luck, I think it should be ready this year. Building has begun at the Drumcondra site. It must be finished this year.

420. Chairman.—On subhead D.9.— Additional Grants to University Colleges —did the expansion of the Dairy Science Faculty at University College, Cork, take place subsequently?—I do not think they have yet actually started operations. Of course, the offer from the Government remains.

421. Deputy Clinton.—In regard to subhead D.10.—Educational Tours for Instructors in Agriculture, etc.—there was no expenditure. Does that indicate that there were no agricultural tours undertaken?—No. This provision was more or less a token provision because nowadays we charge these agricultural tours to the Technical Assistance Subhead, that is, subhead Q. and I think there was such a tour in the year under review.

Deputy Lalor.—Why is not that subhead wiped out altogether? Is there some question of county committees being involved, or something of that nature?— It is possible that when the Estimate was being framed we may not have been absolutely certain that there would be enough money in subhead Q. because we have many other commitments on that Technical Assistance subhead and its retention in subhead D. 10. was probably just due to caution and to make sure that funds could be made available through this subhead if subhead Q. did not prove to be sufficient.

422. On subhead E. 4.—Temporary Schemes for the Growing of Horticultural Crops in the Athlone area—is there any progress report on this scheme?—It is usually referred to in the Annual Report of the Department but, of course, it is a very small scheme. Its object, as you know, is to try to promote the cultivation of crops other than potatoes in this particular area because of the prevalence of eelworm. It is my understanding that the eelworm position there has improved considerably but experts on this matter, which I am not, I must admit, say that you must wait an extremely long time before you can say with any kind of assurance, that the eelworm risk has been removed. We just have one man here who helps people in cultivating other horticultural crops rather than potatoes.

423. Deputy Clinton.—On subhead K.7. —Land Project—I notice the expenditure is considerably less than anticipated?— Yes.

Does that indicate a general slowing down or is it just that works did not come due for payment?—I think the weather in that year had something to do with it. There was quite a lot of unfavourable weather for this kind of work and in addition there was the point made by the Deputy, that certain jobs did not mature for payment as we had expected they would, within the financial year, but I may say that the present tendency is for grants to trend a little bit upwards again. In the present year, we have had some very unfavourable weather and, it is very difficult to say exactly at the moment what the grants will be. But if the weather had been a bit better —which I admit is an assumption—we feel we would have spent at least another £100,000 more than in the previous year. We may not however, in fact, spend more than in the previous year because of the weather position.

424. Have rates per unit of work increased there?—The basis of the grant remains at two-thirds of the estimated cost but, of course, we have not frozen the estimated cost at any particular level obtaining in the past. So, an effort is made to adjust current grant figures to the current costs. As a result, the average grant is going up, of course.

Deputy Lalor.—The existing maximum, of course, still remains?—The £30 an acre maximum remains but we do not think that has a constricting effect, except in a very small way.

425. Deputy Carter.—You have a token subhead for machinery grants. I notice you keep it open. You had no demand, had you, for grants in respect of impliments or machinery?—I think this would be a relic of the Section B. work.

You have a token for it?—We have a hangover of Section B. work.

Even allowing for the hangover, as you say, it would not call for payment of grants. The hangover would not call for payment of any grants for machinery, would it?—That is true. I also see that we did not spend anything in the financial year. It is probably an unnecessary provision really.

426. On subhead K.8.—Lime and Fertilisers Subsidies—would the subsidy to home produced phosphatic manures constitute a large element in this general subsidy? What part of it, roughly, would the home manufacturers see?—During the financial year 1961-62 we amalgamated the two types of phosphate subsidy. The subsidy to home produced phosphate manufacturers, of course, antedated what we call the general fertilisers subsidy. The subsidy to the manufacturers was brought in with a view to keeping the price of the home product at a level with world prices and yet allowing the manufacturers here to continue producing in the face of imports. Later on, the Government brought in what we might call an overall phosphate subsidy to cheapen all phosphates well below the world price. The general subsidy amounted to about £4 a ton of standard superphosphate and the manufacturer’s subsidy would have been in or around 24/- a ton, or a little bit more. So, the amalgamated rate then was made £5 4s. 0d. Nowadays, of course, the superphosphate we use is home produced and its price is reduced by £5 4s. 0d. a ton.

427. Chairman.—On subhead K.13.— Grants to Bacon Factories—how many factories availed themselves of these grants?—The response to this scheme for some time was not really very impressive and the numbers availing of it were less than half the number of factories, which is about 38. Since it was decided some time ago to increase the rate of grants from one-third to 50 per cent, there has been a marked increase in the demand for grants and the tentative estimate is that we may spend about £80,000 in 1963-64, that is, the next financial year, if the present rate of applications continues.

428. Deputy P. J. Burke.—On subhead L.3.—Horse Breeding Act, 1934—the grant was small there. I see you had to increase it?—Yes. We were so short of civil service veterinarians at the time because of pressure from the Bovine Tuberculosis Eradication Scheme that we had to employ outside men on a fee basis to do the inspection of the stallions which is necessary, of course.

429. Chairman.—In regard to subhead M.5.—Agricultural Produce (Cereals) Acts, 1933 to 1958 and Wheat Order, 1960 etc., —I notice the tests were carried out abroad. Could the tests not be carried out at home?—A number of tests were carried out, including one series of tests by An Foras Talúntais—the Agricultural Institute—and then there were tests made by the Swedish official cereals research organisation and by the United States Department of Agriculture. It was felt that it might be wise, because of the very difficult circumstances which then arose, to get views from widely different sources, provided they were by experts, of course.

430. Deputy Lalor.—Could I go back to subhead M.1. for a moment—Agricultural Produce (Eggs) Acts, 1939 and 1955, etc.? Some time recently, I understand, there has been a move away from the code marking of eggs and such strict regulations in regard to eggs. Did not that take place in or about this time? Have we not called off the weekly code marking of eggs? Have we gone away from that?—Yes.

I notice that under that heading there was a saving of £4,000. The explanatory note says there were savings on salaries due to staff vacancies. Would not there be less staff as a result of the relaxation of the regulation?—There were a number of vacancies, in fact, which were not filled and I think the number of serving staff is still below the theoretical authorised level.

I see that we still make the same provision even this year for it?—Yes, but I do not think we will be in a hurry to fill them.

431. Chairman.—In regard to the Appropriations in Aid note No. 8 says the production of turkey poults at Athenry was reduced due to incubation and other difficulties. Could you give us any details in regard to this reduction in the production of turkey poults?—Yes. This, of course, refers to the turkey station we established by Athenry to propagate white turkeys which we imported originally from the United States in the form mostly of hatching eggs. This was just one of these normal hazards we encounter. The rate of incubation was a bit less than we had hoped and that slowed down the rate of distribution and the income derived from the distribution. I do not think there was any major calamity or anything like that. It was just that we overestimated the incubation yield.

432. In regard to No. 18—Repayment by the Co-operative Fruit Growers’ Society, Ltd., Dungarvan, in respect of the principal portion of loan instalments paid to the Agricultural Credit Corporation, Ltd., on behalf of the Society, the note says this society was unable to meet the principal portion of its repayment to the Department?—It is a little hard to predict in this case because the society is in a rather difficult position. It has a very considerable amount of loan capital in relation to the non-interest bearing capital and we have had quite a considerable amount of sympathy with its difficulties in the past and, of course, it has been assisted in various ways by deferment of capital repayments, and so forth. If we were fortunate enough to have a good fruit year this year I am quite sure the society will do whatever they can to catch up on their obligations but I do not think it would be right for me to make an absolute assertion that it will.

Deputy Carter.—The weather is still bad?—Yes.

433. Deputy Lalor.—What is covered by item No. 10 of the Appropriations in Aid —receipts from sale of fencing materials, including fencing loans?—Again I am afraid this is rather an antique relic. We had a scheme going back many years under which we supplied high-grade fencing materials to smallholders in Connemara and Donegal but we were more or less an intermediary there. We obtained the materials and then we passed them on either for payment or through a loan but I think we may take it that it is becoming largely superseded by another fencing scheme that we have introduced as part of the Land Project, intended mainly for mountainy farmers.

That would be the west of Ireland still? —Yes. The new scheme, naturally, will carry the two-thirds grant.

434. Deputy Booth.—On page 122, in the last item under Extra Remuneration, reference is made to payments in respect of overtime, Sunday duty, etc. The amounts vary from £51 to £330. What sort of duty would an employee be carrying out that would entitle him to an addition of £330 along with his ordinary rate?— Does the Deputy wish me to give a breakdown?

No. I was wondering, if we take £330 as the maximum, just as an example, what type of employee got £330 and in what circumstances?—I think the bigger payments here would have been to persons engaged on our farms. We have Backweston farm, Athenry, Ballyhaise, Clonakilty and the Munster Institute, plus the Botanic Gardens in Dublin and the Veterinary College. I think most of the higher payments here would have been paid out in the case of these farms. There is quite a lot of overtime and Sunday work. Also included were a number of clerical officers and clerk-typists and 26 ship inspectors who are on duty at the ports checking on meat and livestock disease duties. In 1961 we had a foot and mouth disease scare in England and I think we had to take on an extra number of temporary ship inspectors for portal duty in connection with the foot and mouth disease precautions and a number of them, I think, had to put in a great deal of overtime. I would say a percentage of this figure would have been due to overtime on Sunday remuneration for these men who during the foot and mouth disease crisis were keeping an eye on what was going on at the ports here.

435. In regard to the Notes, I am curious to know who was the distinguished visitor who got £14 worth of a gift. Is it a proper question to ask?—I am in the Chairman’s hands as to whether it is necessary to put it on the record but I can certainly tell the Committee.

Deputy Booth.—I do not want to embarrass anyone. It seems to be an unusual thing to do. I am not alleging any impropriety.

436. Chairman.—In regard to the National Development Fund—Statement of Receipts and Payments by the Department of Agriculture in the Year ended 31st March, 1962—on page 127 of the Appropriation Accounts, could you say in respect of the item Buildings and equipment for Department’s agricultural schools and farms what works were undertaken. The payments amounted to £44,311?— Yes—mainly the new schools which are being erected at Clonakilty and Athenry which I think are now actually approaching completion or should do so during the coming financial year.

437. Chairman.—On page 124 there is the account of the General Cattle Diseases Fund; on page 125 the account of the Marketing of Agricultural Produce (Grant-in-Aid); on page 126 there is the account of the Dairy Produce (Price Stabilisation) Fund and then there is 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 XXIII.

* See Appendix XXIV.

* See Appendix XXV.

* See Appendix XXVI.

*See Appendix XXVII.