Committee Reports > List of Committees > Dáil > 1970 > Committee of Public Accounts > Interim and Final Report - Appropriation Accounts 1967 - 1968

APPENDIX 36.

1968 WHEAT CROP—DISPOSAL OF SURPLUS

1. In February, 1968, the Minister for Agriculture and Fisheries issued a statement which guaranteed the full millable price (i.e. without deduction of any wheat levy) for 260,000 tons (dried) of the 1968 wheat crop. Calculations were made in the Department in July, 1968, based on the estimated wheat acreage in 1968 and on the average yield, moisture content, and experience in regard to mill intake of previous years. All these calculations indicated that the quantity of dried millable wheat from the 1968 crop was not likely to exceed 260,000 tons and that a levy would not be justified. It was, therefore, announced early in August, 1968, that no levy would be payable by growers on the 1968 wheat crop.

2. Yields from the 1968 wheat crop were, however, far higher than could have been anticipated from results in previous years and it turned out that 331,500 tons of dried millable wheat became available for disposal. Flour millers were required to take up to 240,000 tons for flour milling and this left a stock of 91,500 tons surplus to milling requirements. It was decided that this stock of 91,500 tons would be disposed of through An Bord Gráin.

3. An Bord Gráin disposed of 74,000 tons of this stock before the 1969 wheat harvest and were paid the following amounts from the Exchequer in respect of losses incurred:—

(a) £900,000 on 28th March, 1969, in respect of losses on 50,000 tons.

(b) £490,000 on 23rd October, 1969 in „ „ „ „ 24,000 „

(c) £10,000 on 18th March, 1970, in respect of administration expenses. Total £1,400,000.

4. An Bord Gráin were required to hold the remaining balance of 17,500 tons until the outcome of the 1969 harvest became known. It was intended that if the 1969 harvest did not result in the flour millers obtaining their full milling requirements, this 17,500 tons would be used for flour manufacture at its full economic price and so there would be no loss to the Exchequer on its disposal.

The 1969 harvest was, however, more than sufficient to meet flour milling requirements and the stock of 17,500 tons could not be absorbed in this fashion. (The losses on the surplus wheat of the 1969 crop are being met by An Bord Gráin from the proceeds of the levy of 8/3 per barrel imposed on producers of that crop.)

5. A final decision has not been taken on the losses on the disposal of the 17,500 tons from 1968 crop but it is expected that all losses including storage and interest charges will ultimately have to be borne by the Exchequer. In order to minimise these losses and to avoid deterioration of the 1968 crop wheat by holding it in store An Bord Gráin sold this wheat in conjunction with the surplus of the 1969 crop in the period October 1969—March 1970. In March 1970 the Board still had 17,500 tons of mainly 1969 crop wheat on hands and instead of arranging for imports of wheat which were required for animal feed it sold this wheat with the concurrence of the Minister for Agriculture and Fisheries to the manufacture of compound feeding stuffs. The intention was that the Board would replace this wheat with cheaper imported wheat thereby reducing the overall loss. The need for imports of feed wheat has not arisen because of arrangements recently made to dispose of some 30,000 tons of the flour millers own surplus for animal feed. Sufficient wheat is available for animal feed until the 1970 crop is harvested; in fact the flour millers carry-over at 31st August will be 55,000 tons. It will not be possible to clarify the position in regard to the 17,500 tons until the outcome of the 1970 crop is known. In the meantime the loss of about £20 a ton is being carried in the Board’s Account.

6. During the period the Board held 17,500 tons of 1968 crop wheat or its equivalent of the 1969 crop. There was no saving but by selling the 17,500 tons the Board is saving storage charges while interest charges are involved only on the loss of £20 a ton instead of the full price of approximately £46 a ton.

An Roinn Talmhaíochta agus Iascaigh.

5 Meitheamh, 1970.