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

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 23 Aibreán, 1970.

Thursday, 23rd April, 1970.

The Committee met at 11 a.m.

DEPUTY P. HOGAN in the chair.

Mr. E. F. Suttle (An tÁrd Reachtaire Cuntas agus Ciste) and Mr. L. O’Neill (An Roinn Airgeadais) called and examined.

VOTE 37—AGRICULTURE.

Mr. J. C. Nagle called and examined.

1237. Chairman.—Paragraph 44 of the Report of the Comptroller and Auditor General reads:

“Subhead C.4.—World Food Programme (Grant-in-Aid)

44. Including the £150,000 grant in the year under review £900,000 has been made available for the World Food Programme. From these moneys a total of £845,345 has been paid to 31 March 1969, comprising £235,961 in cash and £609,384 for food supplied. An account of receipts and payments in the year is appended to the appropriation account.”

1238. Have you anything to add. Mr. Suttle?

Mr. Suttle.—This paragraph summarises the contributions made to the World Food Programme up to 31st March, 1969. The payment of £335,676 shown in the appended account was in respect of food.

1239. —What countries benefit from this?

Mr. Nagle.—Quite a number of countries, including Pakistan, Colombia, Peru, New Guinea, Jordan, India, Thailand, Bolivia, Tobruk, the Philippine Republic, Syria— the one European country is Turkey—and the Sudan. These were the main beneficiaries since the programme began.

1240. Deputy Gibbons.—Who pays for it? What food is sent out? How is it sent out?

—The food consists mainly of milk powder, that is to say, either whole milk powder or skim milk powder, especially the latter which, of course, has an important protein content which is very useful in these developing countries. We have also sent, on request, a certain amount of canned meat, canned stewed steak and corned beef. The payment for these products comes out of our Vote and we arrange delivery at the request of the World Food Programme authorities who actually decide what countries at any given time are in need of consignments of this kind. We are under obligation to deliver what they ask us to deliver within the total of our pledge.

1241. Deputy Treacy.—How nutritious is skim milk?

—Some people say skim milk is the better food or drink. I suppose it excludes the butter fat which one gets in ordinary milk. That would be the major difference between the two. Some diet experts, amongst whom I do not count myself, allege that the best part of the milk is in the skim. I should not like to comment on it.

1242. As a lay man I always assume that skim milk implies that the cream has been skimmed off the milk?

—That is true.

1243. Deputy Collins.—We have no control over the countries that receive it?

—No. Once we give the pledge, which is quite voluntary—once we or any other country give the pledge—we implicitly agree to provide, within our pledge, the quantities of food and cash also that are required for the operation of the programme but, I might add, the functioning of the programme is. of course, under the control of an intergovernmental committee, half the members of which are appointed by the United Nations in New York and half by the Food and Agriculture Organisation in Rome. It is a joint programme of these two bodies, the UN in New York and the FAO in Rome. It is administered from Rome but the staff and secretariat are answerable to this intergovernmental committee of which this country is a member at present. The reports have to go to the committee who can agree the nature or details of the programme and they also approve the administrative budgets and general policy.

1244. Chairman.—How is the contribution determined?

—It is a voluntary contribution. Since the war the experience has been that where nations were left to volunteer whatever they thought they could afford for various programmes, usually a larger total was provided than if a compulsory budget assessment was imposed on member nations. When the World Food Programme started, this country was becoming increasingly interested in overseas aid in which so many countries, large and small, participate nowadays. It was felt that this presented a good occasion for our entry into this field in a fairly substantial way. Our contributions are quite large, although not greater than some other small countries, particularly Denmark.

1245. Deputy Treacy.—What follow-up steps do we take to ensure that the food is delivered to the people for whom it was intended?

—This is very much a function of the inter-Governmental Committee which supervises the entire programme. There is an elaborate system of reporting to this inter-Governmental Committee and quite an elaborate system of external audit of the activities of this committee. The audit of the World Food Programme is conducted by the auditor who looks after the accounts of the Food and Agriculture Organisation. He conducts a searching investigation into what happens the food. Sometimes this brings to light various instances where the food did not reach its destination, where it was wrongly shipped or where the food had deteriorated. I recall a number of such cases but, on the whole, the record has been quite good.

1246. Deputy Dr. Gibbons.—I take it that the fact that there was a balance in April. 1968, of £240,000 was because a demand was not made?

—We pay into this deposit account every year the amount voted by the Dáil. That does not mean that the precise amount will be required in that year. The turn-over of the fund is reasonably rapid, taking one year with the other. There is a cash component which is roughly one-third of the total pledged. Usually this is requested rather promptly by the organisation.

1247. In view of all the world hunger it appears to me that each country would have to fulfil its promise for each year?

Mr. Suttle.—Originally, the first amount of £300,000 was provided in 1963 to cover a three-year period. No further money was provided until 1966-68 when a sum of £600,000 was provided for a further three-year period. There is always a carry-over from year to year. In 1969 a sum of £400,000 was provided to cover the two-year period 1969-70.

1248. Chairman.—Paragraph 45 of the Report of the Comptroller and Auditor General reads:

“Subhead D.9.—Additional Grants to University Colleges

45. In paragraph 49 of my report on the accounts for 1964-65 I referred to the approval granted by the Government for the purchase and development of lands and premises at Celbridge, Co. Kildare by University College, Dublin, for the use of the Faculty of General Agriculture. For this purpose the University authorities were facilitated in the sale of property at Glasnevin which had been leased from the State in 1926. The Government directed that the proceeds of the sale should be used for capital development of the Faculty, the new farm buildings, equipment, etc., at Celbridge to be on the most economical lines having regard to modern educational requirements; and that the net amount of any surplus from the sale of the property at Glasnevin be paid into the Exchequer.

£442,000 was realised from the sale of the Glasnevin property and, as expenditure by University College, Dublin, at Celbridge had exceeded £500,000 by 31 December 1967, I asked concerning the original and present estimates of the cost of the work, the factors leading to any increase and the extent to which control was exercised by the Department of Agriculture to ensure due economy in the provision of the necessary accommodation.

I was informed that the original estimate in 1961 prepared before comprehensive plans had been drawn up was £400,000. A comprehensive estimate prepared in 1965 showed a figure of £581,415 and the present estimate of capital expenditure, including working capital, is £851,517. The reasons for the increase in cost are stated to be increased costs in the building trade, especially at Celbridge, unexpectedly high cost of site development and land reclamation works and the provision of more facilities because of an increase in student and staff numbers. I was also informed that the college authorities had been required to submit plans and estimates and that these were examined in the Department. Having regard to the terms of the Government direction and the substantial escalation in cost I have deemed it desirable to draw attention to the matter.”

1249. Have you anything to add to that, Mr. Suttle?

Mr. Suttle.—I have nothing to add to the information in that paragraph. I am statutory auditor of the universities. Normally I audit the accounts of one university each year. I have not seen the accounts of University College, Dublin, for some time. However, I propose in the next year to carry out a very detailed audit. I have no further comment to make on the position.

1250. Deputy Dr. Gibbons.—The students had some objection to moving to Celbridge. Has this matter been settled?

—So far as I recall the students’ problem related to the amount of time that they should spend at the Celbridge farm. I have not any inside knowledge but, judging from Press reports, I understood the question was whether they should spend four or five days a week, or may be a matter of some hours, at Celbridge.

1251. Deputy FitzGerald.—It is not merely a question of the students only. The staff also were concerned at the prospect of spending a large part of their lectures at Celbridge. Naturally, of course, when it is a question of practical work this would be done at Celbridge but it was a question of having their lectures away from the university environment in Belfield that caused the trouble. This has been the main issue. I do not think it has been finally settled but it is not an active cause of current dispute: it is dormant.

1252. Deputy Keating.—If we have finished with that point, may I say I am exercised by the actual amount of money here. On page xvii, in the second paragraph, it is stated:

£442,000 was realised from the sale of the Glasnevin property and, as expenditure by University College, Dublin, at Celbridge had exceeded £500,000 by 31st December, 1967…

Was the £442,000 used up? The difference is a matter of £58,000. Was the sum realised by the sale of Glasnevin invested in land at Lyons and also in the development of that land because, if we have the expenditure of the money obtained from the sale of Glasnevin plus a total expenditure of £850,000 odd now we are getting on to the £1¼ million mark on one property? Do I understand the figures correctly?

—I do not think it is quite as bad as that. This is a rather long story. To answer the question first: the position is that £442,000 was realised from the sale of Glasnevin and this was to be devoted to the purchase and development of the Celbridge site, including the purchase of it. Now the nett estimated excess expenditure would be the difference between the £851,000 and the £442,000. That would be the amount by which, if you like, they are in debit.

1253. Of the initial £442,000 how much was used for the purchase of the land, as it then was, and how much for development?

—The amount, which would include legal fees, spent on the purchase of the land was £111,000. That £111,000 was the first charge really.

1254. So that development has now taken not quite £¾ million, £740,000? Am I to take it that the original estimate was £400,000 and it has now jumped to £851,000?

—Way back in 1961, as is stated in the Comptroller and Auditor General’s report here, a figure of £400,000 was put forward by the University as a possible cost; that was before comprehensive plans were drawn up. On the whole, to be fair, it looked a reasonable kind of estimate at the time. Later on, of course, things changed a good deal and there has also been an enormous escalation in building costs, quite beyond what anybody dreamed in 1961, I think, and the University then had the problem that they had disposed of Glasnevin at the price roughly ruling around that time—1962— whereas they are still developing Celbridge at current building costs. Also, if the university had been able to dispose of the Glasnevin site in separate parcels for, if you like, speculative building purposes they would probably have got a good deal more money; but, as we know, the site was, in fact, needed for Dublin Corporation housing.

1255. Chairman.—Apart from the disposal of the Glasnevin property, there has been a considerable escalation here from £400,000 to £851,000 and, even allowing for the increased costs of building, it is a considerable jump in the estimate?

—It is very considerable. Of course, other factors operated in addition to the undoubtedly increasing costs of development. The numbers of staff and students have increased considerably since the beginning of that decade. Another important angle would be that the standards which university people believe they must have nowadays have also been raised, I would say dramatically, in the past decade certainly in regard to the Faculty of Agriculture. At the beginning of the decade we were very keen on more money being invested by the State in the development of the Agricultural Faculty. We believed it was needed. At the same time, I fully agree that the development so far has overshot the proceeds of the sale of their original holding and, indeed, of the various estimates that were made over the years and I would not, I admit, be surprised if the £850,000 had not now to be adjusted upwards again, assuming the money is provided in future years by the State.

1256. Deputy Keating.—Arising from that, comprehensive plans costing £400,000 were drawn up. It was known the farm would cost £150,000 plus fees. Let us say about £280,000 or £275,000 was allowed for development. It now looks as if something like £750,000 is being spent on development and we are told the end is not yet in sight. I do not want to exaggerate but this represents two and a half to three times the original estimate for development. I have no worries about the original purchase. One appreciates you cannot always dispose of a property like Glasnevin in what would be the ideal way in which to gain the maximum benefit financially, but I am worried by the development costs escalating between two and a half and three times. One does not mind 50 per cent because prices rise and presumably those making estimates are aware of this. This seems to me a very extraordinary rise in development costs for Lyons and I would be interested to know if further information has revealed the source of this, to me, extraordinary rise?

—I have a list of the items here, but it is extremely long. Really it is distributed over a multiplicity of items, some of which are not in themselves very big and all of which seem quite desirable. But, when you add them all up, you get this result. I am not avoiding the question, but I understand the same thing has happened with other developments in University College. For example, I am informed that the estimate for the Arts block was £1¼ million and the actual cost was £2.3 million. There was a similar experience in the case of the Science block. I must confess our own experience in the Department is that the cost of new building works almost invariably, for some reason, is underestimated when the project is first considered. That is very undesirable, I agree, but it seems to be a common occurrence unfortunately. The other aspect I should like to mention, if I may, is as to how far we can take over, so to speak, from the university: in other words, how far we can, with an autonomous body, even though that body is using State funds, actually order them around. The Government or the Department could say to UCD: “No further development at Lyons” but, on the other hand, our own professional staff advise me that, by and large, what has been done at Lyons is desirable and necessary for a first-class Faculty. They are particularly interested in the fourth year which is done at Lyons, because it is here that undergraduates really have the only proper opportunity of acquiring practical knowledge and experience of the job they have been taught theoretically in the preceding three years. This is, I think, accepted in schools of agriculture all over the world: the need to have an extremely competent, practical field course in which the students are themselves engaged in the actual work; I do not mean doing labouring work, but going out and seeing the thing work after having the lectures. Unless they do that they will never be really fully competent. A great many of these graduates will, of course, take up jobs as advisers to county committees of agriculture and with the Department, and so on, and farmers can, I think, spot immediately if the new young adviser coming down knows what he is about; he might be a very learned fellow in theory, but the way he handles stock or approaches stock, the way he walks around the cow byre will make all the difference between conviction to the farmer and its opposite. If he shows himself as inexperienced, the farmer’s immediate reaction will be: “This young fellow is just good at his books”. I have some figures showing the difference between the 1965 and 1967 estimates. These might be of some use.

1257. I am not concerned really with details of specific expenditure and I am sure everybody agrees with what Mr. Nagle says about standards and about the way costs rise and the desirability of doing these things, but two things worry me. I do not want to make painful comparisons but we have had a lot of investment in a similar sort of situation—public money on one hand and an autonomous body on the other that cannot be directly supervised by a Government Department—and it seems that while there have been inevitably mistakes we have not got this sort of enormous mistake in estimates and, by and large, we have got good value and a very good return on our money. What worries me, if we are to be accountable for public funds, is that the university, if it wishes, can say: “Well, they cannot stop now”. When you have put a half-million pounds into some project the alternatives are either that the State goes on bailing them out or else the development is left half-done and the existing investment is little use to you. They have us in a cleft stick to some extent. That may be putting it a little too strongly but we do tend to get into a position where they say: “You have spent a half-million pounds and if you do not spend another half-million the first expenditure will not be much good.” This is a serious situation and I am worried as to what extent changes of plans and making re-assessments of things and failure to carry out plans as originally envisaged, might be a factor in this. I should like to know, but not in a detailed way, if it is possible to pinpoint why it has arisen so much and if it reveals any serious errors in estimating on the part of the universities and if it is university policy to get the Government on to the hook in this way and then insist on being bailed out?

—Taking the last point first, in fairness to the university, their view, expressed many years ago was that the proceeds of the sale of Glasnevin would go far—I am quoting them here—towards meeting the cost of acquiring and developing the Lyons Estate. I think I may also reveal that my Department never felt confident that the proceeds of the sale of Glasnevin would amply cover the cost of acquisition and development of the Lyons Estate. It is also fair to the university to say that the agreement with them did not require them to halt when they had spent the proceeds of Glasnevin. It is true that there is a reference to what they were to do with any balance remaining after the acquisition and development. That was a perfectly proper provision which was possibly inspired by the appropriate Department, the Department of Finance, because there could have been a balance. I feel it was very unlikely but there could have been and the disposal of such balance should have been provided for. But the operative clause of the agreement goes as follows:

To apply the moneys standing to the credit of the account aforesaid for the necessary capital development of the faculty, provided that in building and equipping of suitable premises for the purposes of the faculty the minimum expenditure consistent with the provision of the facilities required by modern educational standards shall be incurred by the College.

The “minimum expenditure consistent with the facilities required by modern educational standards” I am afraid, is largely a matter of opinion. Coming to the Deputy’s other points, I think the university have probably taken the view that what they are spending here is consistent with the provision of the facilities required by modern educational standards as they have evolved today. I think another problem they encountered was that while it was quite clear that the estate was not in a very good condition, it had what was potentially a good deal of very promising land but the extent and cost of what might be called essential fundamental work like drainage and roads, I believe, turned out to be much more than was expected.

1258. Deputy Collins.—Surely, before the whole acquisition we could have got expert advice as to the problem of drainage and site clearance? It seems to me something wrong happened in this respect?

—I understand they did get advice from their own professional staff, engineers and architects.

Deputy Collins.—That does not say much for their own professional staff, engineers and architects.

1259. Deputy Keating.—In the case of an institution like this the grants which would be available for drainage and other development to the ordinary practical farmer would be available to them also?

—Yes.

1260. Were there other moneys that came to them also for this?

—For field drainage they got certain grants in the normal way as every institution does.

Deputy Keating.—One can appreciate the points about the need for practical experience for agricultural specialists in training but the most practical part of training is to have to function in a situation where costs will not be so different from what the ordinary practising farmer has to face and if there is expenditure of £1,000 per acre it gives them a baseline quite different from that of the ordinary farmer and in that way it could be said to be negative education.

1261. Deputy Dr. Gibbons.—Did you say the legal fees were £111,000?

—No. The total cost of acquiring, including fees, was £111,000. The actual purchase price was about £100,000. When it became evident that the cost of development was going to exceed the proceeds of Lyons the matter was taken up with university college and I think we suggested it might be useful from their point of view as well as ours if both on their current and capital side we could have an understanding extending over several years and that his could be reviewed every year with reference to the year immediately ahead so that we could at least have some kind of provisional programme of expenditure. I think an effort was made to do this but while it is, of course, not for me to say how university business should be run—it seems to me things would perhaps be easier both from the university point of view and certainly from ours if it were possible to have a more integrated financial administration of the faculty as a whole which would pull together the various departments of the faculty in a reasonable manner, of course. Suggestions of that kind have been made to the university but this can become a very delicate matter and if we push this idea any further we might find ourselves being accused of red tape and bureaucracy and infringing the autonomous rights of universities of which they are rightly very jealous.

1262. Deputy FitzGerald.—Will this problem not be resolved when you have a statutory body there which will have a supervisory role? Would they not be likely to be less sensitive about autonomy than when the power is exercised directly by the Government?

—That might well be the position. That might help considerably. In justice to the university, and in particular to the Faculty of Agriculture, the experience has been, I understand, widespread throughout this university and other universities of capital expenditure exceeding the original well thought out estimate quite considerably. That is not confined to the universities. I am not advancing this to cover up the situation but it is an angle which must not be over-looked because it represents very difficult problems and, with prices moving so rapidly and standards changing almost every year, this job of estimation is in all cases one of the most difficult of all when an educational service is involved.

1263. Deputy Keating.—I think we are uncovering what is a very real problem and it might be useful for us to go into it a little further. Investment in higher education will be increasing over the years. No one worries about plus or minus 25 per cent but when it gets to plus 200 per cent one is entitled to ask if there has not been a failure in some area. I think the whole matter should be gone into in more detail quite apart from Lyons.

1264. Chairman.—Apart from the universities, throughout the whole public service and the local authority service there has always been this problem of underestimation. My personal view is that one factor is that our method of paying for expert or professional advice is a flat rate to architects, for example, irrespective of the size of the project.

Deputy FitzGerald.—A flat percentage.

1265. Chairman.—That may be a factor. This Committee has before now made that point and requested that there should be a scaling down of the professional fees. We can report it again to draw the attention of the Government to it.

1266. Deputy Treacy.—I wonder could Mr. Nagle enlighten us as to whether any serious attempt was made to draw up a positive plan for the development of that very valuable property in the initial stages? Did the development take place in a haphazard manner or was there a positive plan?

—I do not think it would be right to say it was haphazard. I think the position would be between the two extremes, if I may say so, mentioned by the Deputy. There was this original estimate which, as was stated in the report here, was not based on a comprehensive plan, of about £400,000. The comprehensive estimate prepared in 1965 totalling £581,000, I understand, provided a pretty well thought out programme of development and basically this is really what the Faculty are still following. As the years have gone by their estimate of costs has risen steadily and in a few instances new items have been introduced. For example I recall a figure of £75,000 for plant pathology buildings which I think were not in the original estimate but which undoubtedly were necessary and probably should have been in the original estimate. Subject to certain additions of that kind I think it is fair to say that the expenditure in the estimate at around £850,000 or more by and large accords with the more comprehensive programme produced in 1965. When the possibility of an excess arose the university at our request gave us a full break-down of this £851,000. The question arose as to the point at which we had any rights to inquire into what was happening at Lyons at all. As long as they were using the proceeds of the sale of Glasnevin it was not at all clear what rights of approval or sanction we had within the overall total. That was another problem that arose. Indeed I think the university became, understandably, a little testy with us. I notice that in the President’s report to the Governing Body for 1967-68 the following paragraph occurs:

Correspondence is attached showing what progress has been made with the Department of Agriculture in following these objectives. [Note—these related to all the various developments that were contemplated for the Faculty including Lyons]. It is to be regretted that nothing by way of a final settlement on any item has been reached and it must be repeated that the Department does not seem to appreciate the urgency of the very critical financial situation of this Faculty.

Again I can sympathise with this view but the question is what is one to do.

1267. Is Mr. Nagle aware of any further development in this and, if so, what is the approximate cost?

—I am not aware of any further development. The developments costed at £851,000 have not all taken place. My own feeling is that it is quite likely that because of the current escalation in building costs it may cost more than the £850,000 estimate—which in terms of movement of building costs is very likely now out of date again. At the same time I should like to say that the only extra amount provided for the Lyons development by my Department was £48,000 in the past financial year. I am correct in saying that is the first payment we have made for the additional capital requirements over and above the Glasnevin proceeds. That indicates that we are trying to sort out these problems with the university but we realise that if no additional sum is provided there is going to be a serious hold up and we are back in the same dilemma.

1268. How much work remains to be done?

—I think it would probably amount to a sum of a couple of hundred thousand pounds.

1269. Deputy Collins.—The sum of £442,000 was realised for Glasnevin and the current estimate is £850,000. We are only giving £48,000 extra—that is £490,000. Who pays the balance?

—Some would not accrue until the future. To the extent that they exceed that figure. I would imagine the cost is borne by the faculty by way of overdraft from the bank. That would be the only other way.

1270. Deputy Keating.—We have spent a lot of time on this point. We did not spend enough money on agricultural education and research for a long period after the State was established. We now have the situation that we have competition between a number of agencies; the Department, the Institute of Agriculture and the universities. This is creating a situation where we are not getting the best results and there is a wastage of resources. I should like to see a report on this matter because this problem is an example of what is occurring elsewhere. I should like to see a report to this Committee stating how much has come simply from increased building costs or how much is due to a change of mind or plan. In the matter of building it has been my experience that it is the alterations that push up costs. I should like to know how much of this is due to a total change of heart or to the factor of obsolescence. This report would be valuable in regard to the better planning and utilisation of funds in the whole area of higher education.

Mr. Suttle.—Experience in England in the last ten years has shown that when higher education started there the standard of building carried out by the universities was too high. The powers of the University Grants Committee were strengthened and, as a result of the work they carried out, specific standards were laid down for the various universities and this cut down costs considerably. Also, control over expenditure by the universities in England was considered too loose and, as a result of the investigation, the Comptroller and Auditor General was told to go ahead and audit the accounts of every university. This was strongly opposed by the university authorities because up to then they had their own commercial auditors. They must now account to the Comptroller and Auditor General for all expenditure.

1271. Deputy FitzGerald.—You stated you were the statutory auditor for the universities. What does that mean? You said you only audit the accounts for one year. Who audits them in the other years?

Mr. Suttle.—This was on old custom taken over from the British Government in 1922. The Comptroller and Auditor General was appointed auditor of the universities under the Universities Act of 1908.

1272. Of what university?

Mr. Suttle.—The National University.

1273. What about Dublin University?

Mr. Suttle.—It did not include Dublin, only the National University and its constituents.

1274. Does this practice still continue?

Mr. Suttle.—Yes.

1275. Discriminatory?

Mr. Suttle.—In 1922 the universities had their own commercial auditors and the Comptroller and Auditor General would merely carry out a supervisory audit. Due to shortage of staff in my office I merely carried out a supervisory audit of one college per year, accepting the commercial auditors’ certificates in the meantime. I propose in the current year to do a very detailed audit in view of the large capital expenditure in UCD.

1276. Did you report on these audits in the report?

Mr. Suttle.—I have not had any subject for comment up to this.

1277. But if you had, you would?

Mr. Suttle.—I have had discussions with the presidents of the colleges from time to time on various matters which would not form the subject of a public report.

Chairman.—Dublin University is still outside?

1278. Deputy Tunney.—In the matter of the development which occurred, who decided on the plan? Was it representatives from the university or was it university representatives plus professional men from the Department of Agriculture? Who has the stronger voice in deciding what is necessary and what should be done?

Mr. Nagle.—I would say primarily the university authorities, but the practice is to discuss plans and programmes with our own professional experts. I think there used to be an advisory committee consisting of some of our own professional people and members of the faculty to discuss any problems affecting the faculty from time to time.

1279. Deputy FitzGerald.—Used to be?

—It was out of action for some time but recently it has been revived.

1280. Deputy Tunney.—I would not be critical about the amount of money being spent if I could be satisfied on one or two issues. The terms of reference which require development on economic lines, having regard to modern educational requirements, is a rather ridiculous type of term of reference. If I could be happy that the development which occurred happened because of present or anticipated educational needs I would consider it money well spent. On the other hand, I should like to ascertain whether, in respect of moneys already spent or about to be spent, that the proper consultation had taken place and that there was not any unnecessary expenditure. If there has been any fault in the matter of expenditure on education in this country it has been that we have only provided for immediate needs and have not made provision for developments in the future when they will probably be much more expensive than they are at the moment; but, at this stage, reading this, it seems to me it is not something on which one could make any judgment or give any worthwhile opinion in the course of half-an-hour. It is a rather wide field. So long as I could be happy that that the plans were properly drawn up but other factors intervened requiring additional expenditure, expenditure considered essential by the professional people, by the university in consultation with the Department, I would welcome it rather than criticise it?

—All I can say to that is that our own professional people advise me that, by and large, what is being done at Lyons is good and desirable, having regard to the best modern educational standards. I agree that does not mean that every iota of what is being done there is but, by and large, our people’s feeling, for what it is worth—maybe they are wrong—is that the kind of development that is going on there is what is needed in a first-class Faculty of Agriculture. Other people may take a different view, but that is the view of our people.

1281. One small point: agriculture-wise, was there anything salvageable from Glasnevin or was that sold in its entirety to Dublin Corporation?

—There was not very much salvageable according to my recollection. They were, I think, able to take down some glasshouses and transfer them. Apart from that, I think it would not have paid them to move physical fixtures and that kind of thing. I think they took whatever they could. Perhaps it might not be unhelpful to the Committee if I said that a particularly expensive item in the development of Lyons was the provision of pig and cattle buildings which up to now have cost nearly £200,000. That is quite a high figure.

1282. Deputy Keating.—This, in a sense, brings me to the kernel of the matter. We are not questioning the professional judgment of agriculturists and we are accepting the opinion of Mr. Nagle’s experts that what has been done was necessary in order to have a good modern Faculty. Everybody knows approximately what it costs to accommodate one sow or one fattener pig, or whatever it is. Farmers must know because they do not have these financial advantages, but this figure seems to me absolutely horrendous, I am bound to say, and if it arose because of changes of mind or because of building palaces, when what Ireland needs is very cheap farm buildings, then there is a real error of judgment or error in planning to be uncovered.

1283. Deputy Collins.—I agree with what Deputy Keating says. In my experience of pig production I have seen the farmers go for the cheapest possible type of building. In a number of cases I have seen bales of straw used for sows and fattener pigs and I honestly think an expenditure of £200,000 on styes and byres is far in excess of what the figure should be, far in excess of what the priority of expenditure would require from the point of view of research. It is a fantastic figure. I should like a further report on this particular point. Might I go even further and say that it would appear to me there has been a certain laxity in the preparation of plans for the development of the Lyons estate. I should like a very detailed report of what plans were drawn up in 1961 and who was consulted, what plans were drawn up in 1965 and who was consulted, and what the present position is concerning progress in site development and what is required to be done to complete the development.

1284. Chairman.—Mr. Nagle, we will furnish you with a copy of the discussion here and you would then, perhaps, cover in your report every aspect raised by the members?

—Yes.*

1285. Deputy Keating.—In relation to animal housing in particular I should like to have in both pigs and cattle an expression of the cost per animal housed?

—Yes. We will have to go to the university for these figures. I take it that will be in order.

Chairman.—Yes.

1286. Deputy Tunney.—I would not be altogether in agreement with enclosing sows in bales of straw or, indeed, in second rate buildings. If this is capital investment in an area in which the return may be substantial in the next 20 or 50 years it would be wrong for us to suggest that a weaker structure, adequate for the time being or for the next five years, might be constructed.

1287. Deputy Collins.—Perhaps I could clarify the point: I merely used the example to show trends on the part of individual farmers in the practical sphere of fattening pigs. I did not say that that was what should be done on the Lyons estate, but I think £200,000 on buildings for cattle and pigs is, in a relative sense, experimental agriculture rather than practical agriculture.

1288. Chairman.—Paragraph 46 of the Comptroller and Auditor General’s report reads as follows:

“Subhead K.1.—Miscellaneous Work

46. Córas Beostoic agus Feola, Teoranta, was incorporated in February 1969 under the Companies Act, 1963 as a company without share capital and limited by guarantee. The primary object of the company is to undertake promotional work for the development of exports of livestock, carcase meat and meat products. The charge to this subhead includes a payment of £4,300 to the company to meet initial expenses.”

1289. Have you anything to add, Mr. Suttle?

Mr. Suttle.—The accounts of this company will be audited by me. The first accounting referred to the period February, 1969 to March, 1970. That would be a little bit more than a year and it was decided to make one account of that instead of splitting it into a short period from February to March and then a year.

1290. Chairman.—Perhaps Mr. Nagle could tell us how this company will be financed and, briefly, how it will operate and what personnel have been appointed?

Mr. Nagle.—At the moment this body has been incorporated as a limited company and the directors have been appointed by the Minister. They get a grant from the Vote which, in 1970-71, is £150,000. Last year, 1969-70, they got £115,000. Its activities are intended to be really of a promotional nature, to promote the sale of Irish meat and store cattle on the export markets. I think the Minister said that, if this body should prove a success, he would then consider the question of putting it on a statutory basis on the lines of Córas Tráchtála and other bodies, but he would like to see first of all how it will work out in practice.

1291. Deputy Keating.—Is it envisaged that its source of income will always be a direct grant? Is the matter of raising its own revenues from other sources under discussion?

—I do not think the point has come up. If there was some other method of helping the Exchequer it would be welcomed by quite a number of people.

1292. Deputy Collins.—The method of financing this company is rather unusual. The business of the company is the promotion of exports of live cattle, not necessarily live store cattle, and beef and yet its finances are drawn only from a levy on beef exports? Is not that so?

—I suppose it depends on how you looked at it. There are two things which in a way are separate. When the British Government increased their guaranteed price for fat cattle in 1969 that was passed on here except for a penny farthing. There was some reference at the time to the grant to CBF representing something like a farthing per pound but it does not follow that if there was no CBF the one penny farthing deduction would not have been made. That penny farthing deduction was also due to policy considerations.

1293. There were references to it?

—There were certainly references to it at the time.

By the Minister?

—Possibly by the Minister. I could not say that but there were some public references to it undoubtedly.

1294. All directors are appointed by the Minister?

—Yes.

1295. In consultation with interested bodies or independently?

—I think there was consultation with various interests because clearly the membership is very representative of the different sectors.

Deputy Collins.—I beg to differ with you.

Deputy Keating.—I would concur with the Deputy.

Deputy Collins.—There was no consultation as far as the appointment of directors was concerned.

1296. Chairman.—I think Mr. Nagle is out of that picture. He has enough to answer for. This would appear to be a matter of policy.

1297. Deputy Collins.—I beg to differ. I asked if there were consultations with bodies before the appointments. I do not think that is a matter of policy. I think it is a matter of explanation of administration. Could we have a report on it, please? I am asking if the structure of the company is such that before the directors are appointed the Minister consulted with interested bodies. This is not policy but a question of the administrative link.

Chairman.—I think the accounting officer said that was done.

Deputy Collins.—And I beg to differ and ask for a report.

Chairman.—He said it was a broadly based body.

Deputy Collins.—I am not satisfied with the answer.

—I did not suggest that letters were sent to various organisations asking them to nominate somebody for these posts but I said my understanding was that there had been consultations with various interests involved. I am not saying formal letters were sent out to X, Y. and Z. That is really all I know about the situation.

Deputy Collins.—Some clarification of the position is needed.

1298. Chairman.—It is a question of whether this is a policy matter and whether it should be raised in the Dáil. It seems to me a matter that would be more appropriately raised in the House with the Minister directly than with the accounting officer.

Mr. Suttle.—The position is that Mr. Nagle has been given money to hand out to Córas Beostoic and Córas Beostoic was set up by the Minister. I think Mr. Nagle would have very little authority or contact really with Córas Beostoic provided they carried out their functions in such a way as to satisfy the Dáil which provides the money. Would not that be the position, Mr. Nagle?

Mr. Nagle.—That is true.

Mr. Suttle.—Mr. Nagle has no control over this company at all.

Mr. Nagle.—Not really. It is a limited company.

1299. Deputy Collins.—Who holds the shares? In whose name are they?

Mr. Suttle.—I have never seen any accounts and I do not know what the share capital is. Possibly there is none. It is possibly limited by guarantee and the guarantor would probably be a combination of the directors and the Minister. I have no information on the position.

1300. On another aspect of the company, I understand it held shows in English centres since its inception?

Mr. Suttle.—I have its first report here and I think they mention taking part in some exhibitions of cattle in England and Scotland.

1301. Did it hold an all-Irish show independently in a centre in England? The point I am getting at is that I understand the show was held in a centre in England for Irish stores and that one particular cattle dealer supplied all the animals. What I want to know is who financed the whole show?

Mr. Suttle.—That would be a matter of purely internal administration of the company, and neither the accounting officer nor myself would have any information on that.

1302. Deputy Keating.—Could I ask if the report to which Mr. Nagle and Mr. Suttle have referred is available? I have not seen one. I do not know if it has been sent out to other people?

Chairman.—Perhaps it is available in the Library.

Deputy Keating.—Is it dated?

Mr. Suttle.—It is dated January, 1970. There are no accounts in this report.

1303. Deputy Collins.—Surely as members of this Public Accounts Committee we should have had a copy of that report?

Mr. Suttle.—There are no accounts in this. It is only a report of their proceedings.

Mr. Nagle.—I think they are at present bound only by the requirements of the Companies Act as regards accounts and so on. They have also turned out this report. I did raise the question about presentation in the Library and I was informed that a number of other bodies of this kind also have reports that are not circulated. It is a matter of where you draw the line. Of course the Committee is very welcome to this report.

1304. Deputy FitzGerald.—This is a general problem. I have been puzzled as to how reports of State bodies are circulated to Members of the Oireachtas. Would it be possible for members of the Public Accounts Committee to get reports of State bodies?

Mr. Suttle.—The position is very indefinite in that where bodies are set up by statute there is generally a provision in the statute that the accounts shall be presented to both Houses but in quite a number of the older bodies such as CIE there is no such statutory provision. Quite a lot of bodies are in that position. I think.

1305. I appreciate that but what I am concerned with is administration and not with the legal obligation. Would it be possible from the point of view that a Government Department is responsible to have each State body send a copy of its report to members of the Public Accounts Committee? Could that be arranged as a matter of courtesy?

Mr. Suttle.—I think I told the Deputy already that consideration of accounts by the Committee is under discussion at present and has been for some years past. But if the accounting officer, as a matter of courtesy, brings along a copy of the report, that is a matter for himself and nothing else.

1306. I appreciate that there is no legal obligation to do so but I wonder if we could address a request to Government Departments to institute this practice?

Mr. Suttle.—I think that would be a matter on which the accounting officer would have to consult his Minister because a decision regarding the consideration of these accounts has been raised before and the matter has been brought up in the Dáil from time to time but no decision has been taken on the matter. It is really in the hands of the Government.

1307. There seems to be some confusion. We are in fact presented with copies of the accounts of some State bodies. The fact that no general decision has been taken as to whether we have the right to examine these accounts does not mean that we do not get some of them. It is a matter for the Committee to address this request to the Government Department concerned. We get some and not others and that is very irritating?

Mr. Suttle.—When an account is presented or laid on the Table of the House there is nothing to prevent any Deputy from getting a copy and using it for whatever purpose he likes. In fact if he likes he can bring it before this Committee. Questioning the accounting officer on the activities of these bodies is another matter because most of these bodies are autonomous and are not under the direct control of the Department or the accounting officer and he may not be in a position to answer.

1308. I quite appreciate that, and I am sure that if we try to ask questions that are outside our competence the Chair will rule us out of order. The fact of the matter is that we have before us the accounts of the Dairy Disposal Company. Are they laid on the Table of the House? Is there a statutory requirement that they should be?

Mr. Nagle.—I am not sure about that.

1309. I do not think there is?

Mr. Suttle.—This is a matter of courtesy. Some years ago the accounting officer was asked if he would supply them to the Committee and he agreed.

1310. All I am asking is that we should make this request to the different Departments and I am sure they will all react with the same courtesy as the Department of Agriculture have shown.

Mr. Suttle.—The position is that even though the Dairy Disposal Company is a company under the Companies Acts it has been to a large extent under the control of the Department right from the beginning when it was set up in 1927.

1311. How do you mean under the control? Is there some statutory provision?

Mr. Suttle.—No, but its finances are provided out of the Vote for the Department of Agriculture. Originally when it was set up to streamline, if you like, the creamery industry its main function was to buy up creameries and set up new creameries and every penny it required had to be voted from year to year.

1312. This is getting us into a complicated discussion. I am just suggesting that the Committee should address a request to the Department to furnish us with copies of the reports and accounts of the State bodies for which they are responsible. We know there is no bar to our getting a positive response to such a request by virtue of the fact that if we can address such a request to one there can be no objection to our addressing it to others. If we try to raise matters here which are out of order we can be ruled out of order. In the meantime it is rather invidious that we are getting some and not others?

Mr. Suttle.—I agree with you from that point of view. There can be no harm in having the accounts before the Committee and the questions raised can be decided on later on. There can be no objection to that.

Mr. Nagle.—Not from us.

Deputy FitzGerald.—Obviously because of the fact that we have them from you.

1313. —Chairman.—Paragraph 47 of the Report of the Comptroller and Auditor General reads:

“Subhead K.4.—Improvement of the Creamery Industry, etc.

47. In paragraph 51 of my report on the accounts for 1963-64 I referred to the arrangement whereby the Dairy Disposal Company, Ltd., undertook the operation of a commercial cheese factory at Wexford for the period 11 May 1962 to 31 July 1963 and were guaranteed against losses incurred. The ascertained losses as shown by audited accounts amounted to £13,778; £2,500 had been paid on account in the years 1963 and 1964 and the balance of £11,278 is charged in this account.”

1314. Have you anything to add, Mr. Suttle?

Mr. Suttle.—This paragraph shows the outturn of the arrangement adopted to keep the Wexford cheese factory in operation when production difficulties were encountered in 1962. When the management period ended in July, 1963, the control of the assets of the cheese factory passed into the hands of a receiver appointed by the Industrial Credit Company, Ltd., and the bank. He disposed of the factory to Wexford Creamery Ltd., who are now manufacturing cheeses.

1315. Chairman.—Was that a German concern?

Mr. Suttle.—It was.

Mr. Nagle.—Yes, Mr. Chairman.

1316. Chairman.—What is the position now? Is it satisfactory?

—It seems to be getting along quite well under its new ownership, that is, Wexford Creamery Ltd. As the Committee are aware, the German firm encountered various difficulties and decided to pull out, rather abruptly perhaps. The question was how to fill the gap pending settlement of the future of this factory because most people thought it had a good future if it could weather the initial difficulties. The Dairy Disposal Company were asked to go in as caretakers to keep it ticking over until some other arrangement was made. They did this and it was worthwhile because the factory is now established on a permanent basis and is turning out a good profit.

1317. Deputy Collins.—What was the nature of the difficulties encountered in 1962?

Chairman.—Manufacturing difficulties?

—Thinking back over the years I recall that one of the major difficulties they encountered was in respect of the quality of milk. As you are aware special quality milk is required for cheese making. This factory was located in a part of Wexford which, if my memory is right and sometimes it is not, was traditionally associated with farm butter rather than creamery butter. It is a fair enough deduction to make that the milk in a farm butter area would not be as good quality as creamery milk. They also encountered trouble with the water supply. For some reason it was contaminated. They were unlucky. I would also venture to say that possibly they did not have any close experience of working in Irish conditions. They had good workers and the people cooperated well with them. It was a combination of bad luck and unfamiliarity with the general set up in our country. The promoters felt also that they could weather their difficulties but their financial chiefs in Germany decided that enough money had been invested. This was a business decision. They decided they had gone so far and they would go no further.

1318. Chairman.—Paragraph 48 of the Report of the Comptroller and Auditor General reads:

“Subhead K.9.—Land Project

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

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 (in Gaeltacht areas three-quarters) of the estimated cost subject to a maximum of £50 per statute acre in western and north western counties and £45 per acre elsewhere. Grants to farmers amounted to £2,609,963 in the year as compared with £2,449,692 in the previous year.”

1319. Have you anything to add, Mr. Suttle?

Mr. Suttle.—This paragraph gives the usual breakdown of the land project expenditure for the year. Compared with 1967-68 total expenditure in the year increased by £133,000, that is about four per cent.

1320. Deputy Dr. Gibbons.—The land project I understand has a statutory depth at which pipes must be placed. Is that waived?

Mr. Nagle.—I think it would be. It is probably a rule that can be altered. I will inquire about this. I think the general practice is to have standards, procedures, rules, measurements but I think they are applied in a commonsense way. It might be better if I got a specific answer to a specific question put by the Deputy.*

1321. Deputy A. Gibbons.—There is another aspect. The 21 inch depth is not suitable in all cases and I understand the research stations have more or less confirmed this. My experience has been that if they do not comply with this they are not paid a grant. This applies particularly in the Drumlin area in County Leitrim. If you go down to the regulation depth of 21 inches you will still encounter impervious soil?

—Once the individual plan has been set up and agreed with the farmer, then the farmer is supposed to carry it out, which seems reasonable enough. I do not know if there is a universal rule applying to everybody ab initio as regards the depth. However, I shall certainly find out.

1322. There is another aspect. How soon or to what degree is the advice of An Foras Talúntais followed in regard to this matter?

—There is close contact on this matter between the Land Project people and An Foras Talúnutais. This has been the case during the years and it is continuing. Cooperation is very good in this sphere.

1323. I understand that An Foras Talúntais are approaching the stage where superficial drainage may be as effective, and certainly cheaper, than the more extensive digging. Has this alternative been offered to farmers yet?

—In regard to any reasonable research finding which seems to have a practical bearing, it is usual to try it out in practical conditions. It does not follow that what might be a useful and interesting discovery would stand up to the ordinary practical conditions of farming. If it does, there is no reason why it should not be adopted. This is a very technical question and I should prefer to get a more complete answer from the technical people concerned, if I may do so.

Deputy Dr. Gibbons.—I am satisfied.

1324. Chairman.—Paragraph 49 of the Report of the Comptroller and Auditor General reads:

“Subhead K.10—Lime and Fertilisers Subsidies

49. The expenditure under this subhead is made up as follows:—

”

1325. Have you anything to add, Mr. Suttle?

Mr. Suttle.—This paragraph is for information. The charge to the subhead is about £940,000 higher than the previous year— mainly under the phosphatic fertiliser head.

1326. Deputy Collins.—There have been allegations of dumping of foreign fertilisers on the home market. Has the current position been investigated by the Department?

Mr. Nagle.—This is really a matter for the Department of Industry and Commerce. Professionally speaking, my Department takes the view that free trade in fertilisers should be good for the farmer. Obviously it is right from the agricultural point of view. Where there is an anti-dumping complaint although I do not say we act as devil’s advocate, we certainly raise many questions as to whether the people concerned are quite certain that dumping is, in fact, occurring in the technical sense and so on.

1327. Because allegations are made more or less on the basis of the unemployment created due to the importation?

—Yes. Some of the allegations were upheld by the Department of Industry and Commerce. If specific action was not taken, I think some of the British manufacturers agreed to do something about the matter. I am now speaking from memory.

1328. Deputy Dr. Gibbons.—Do the Department insist on soil-testing before fertilisers are supplied?

—These are two separate things. There is a soil-testing service available free to all farmers and they are encouraged to avail of this in deciding on their fertiliser and other requirements. This service is administered at Johnstown Castle, which is part of An Foras Talúntais. However, there is no direct connection between that and the subsidy paid. The object of the subsidy is to reduce the cost of fertilisers but the farmers are, of course, constantly exhorted by the agricultural advisers and others concerned to use fertilisers properly and carefully. Soil-testing is a very important part of the operation.

1329. Chairman.—It is not obligatory?

—No.

1330. Deputy Dr. Gibbons.—It has been alleged that on some soils it is a waste of money putting on other fertilisers unless the lime content is correct. It was alleged that some fertilisers are used without having the lime content correct?

—This could, of course, happen and the only way in which the problem can be tackled is by sound advice from the advisory service, backed up by the research people. I think this has been done. Undoubtedly, there are cases where there is not only under-fertilisation but also wasteful over-fertilisation. If the lime content of the soil is not suitable you may be throwing good money after bad. It is my belief that in the past ten years there has been a vast improvement in the general know-how of farmers about this matter.

1331. Deputy FitzGerald.—If the difficulty is to ensure that the fertiliser is applied in a useful way, does this not bring into question the method of subsidisation? Should not this matter be looked into? I can see the difficulty. Obviously, if you are going to provide a subsidy at distribution point you cannot control the benefits afterwards but if the subsidy related to the application —although it might be difficult from the administrative point of view—it might produce better results?

—I do not think this would work. This is primarily a matter where it is the duty of the advisory service to see that farmers understand everything about fertilisers and their application. There is no short-cut around that. Suppose a farmer is not getting the best results, he will always get some results but he will have to rely on the adviser to tell him what is wrong.

1332. He would have to rely on the advisory service but he would have to rely on the farmer accepting that advice?

—Ultimately, one cannot protect the farmer from himself.

1333. Here we are trying to protect the Exchequer. I recognise that the suggested change might not be practical, but I wonder if consideration has been given to this in view of the desirablity of protecting the Exchequer?

—I do not think it could be done.

1334. Deputy Dr. Gibbons.—Is there any objection to each farmer having a soil test carried out before or at the time of application?

—I have my doubts. Again in this case, it is the job of the advisory service.

1335. Deputy FitzGerald.—The advisory service cannot prevent the farmer from misusing the fertiliser. Therefore, the advisory service is an ineffective method for protecting the Exchequer. We are discussing this as a Public Accounts Committee. You may tell us there is no way by which the Exchequer can be protected, and we shall accept your advice on that, but I wonder if there is any way by which the subsidy could be provided and show more effective results? I think it is a fair question?

—The advisory service has been doing an increasingly effective job on this matter. There has been a great improvement in the general know-how of farmers and the number of cases where any gross abuse of the fertilisers occurs is infinitesimal. In my opinion it would not justify an over-turning of the system and the introduction of what most farmers would regard as a very irritating and bureaucratic method. I am sorry, Mr. Chairman, but I should really shrink from this.

Deputy FitzGerald.—It is a fair answer, but it was a fair question.

Deputy Keating.—I would agree entirely on this.

Deputy FitzGerald.—I am satisfied.

Deputy Keating.—You would have diminishing effectiveness from any other rule or limitation.

1336. Chairman.—Paragraph 50 of the Report of the Comptroller and Auditor General reads as follows:—

“50. In compliance with the Anglo-Irish Free Trade Area Agreement it was decided to phase out over a period of some years a subsidy differential in favour of Irish manufactured phosphatic fertiliser over that of United Kingdom origin. In consequence the subsidy payable on imported Brtish fertiliser was increased on 9 August 1968 from 11s. 0d. to 11s. 11d. per phosphorus unit, representing an increase of approximately 9s. 0d. per ton on a standard product. I have been informed that the evidence available to the Department indicates that the main object of the subsidy scheme, to make fertilisers available more cheaply to farmers, is being achieved in the case of these fertilisers.”

1337. Have you anything to add, Mr. Suttle?

Mr. Suttle.—Nothing to add: the differential in this particular case was introduced in 1961.

1338. Chairman.—Paragraphs 51 and 52 of the Report of the Comptroller and Auditor General read as follows:

“51. In the course of audit a case was observed in which a subsidy claim at the higher rate on imported fertilisers sold after 9 August 1968 appeared to include stocks imported before that date. In reply to my inquiry I was informed that the importer had agreed that there had been an overpayment of £2,550; this had recently been recovered and the accuracy of the sales returns would be verified when the Department’s routine audit of the firm’s records is carried out.

52. To verify the subsidy claims, the records of fertiliser manufacturers and importers are inspected by officers of the Department whose reports are available to me. The amounts involved in the claims are substantial and it appeared to me that the checking procedure had fallen into arrear. In reply to my inquiry the Accounting Officer stated that staffing problems had caused delays in inspections but that these had been remedied and the work would be brought up to date. I will keep the matter under review.”

1339. Deputy Collins.—This could involve large sums?

Mr. Suttle.—The Department passes the claim of the fertiliser distributors and then, later in the year, possibly 12 months afterwards, goes around and examines the records of the distributors and I felt that a more detailed check of the original claim might be carried out and not depend purely on the, if you like, post factum examination of the distributors’ records.

1340. Deputy Collins.—Have you instituted this more accurate system?

Mr. Suttle.—No. The Department still depends on the post factum examination of the distributors’ records.

1341. Deputy Collins.—Would Mr. Nagle like to comment on this or is he satisfied with the proceeding?

—I think the system is reasonably all right. In the past we have received a certain amount of commendation from the Comptroller and Auditor General on the basis of checks his staff carried out. What happened in this case was that, because of certain staff difficulties and shortages, the inspection of the actual books of the companies fell into arrears. But that has been put right by taking staff, I must admit, from other work. When this was discovered, I said: “We must reduce the staff somewhere else and this job must be done.” We are very short of staff from executive level downwards— clerical staff, typists, shorthand typists. We have chronic shortages. In general, the system of sending our own people, who have full access to the books, around the various plants has worked quite well in the past. We are always in debt to these fertiliser people because we pay in arrear and if anything like this occurs it can easily be remedied by deduction from the next payment. I thoroughly agree that it is undesirable any overpayment of this kind should occur and that is why we have looked after the staff aspects of the inspection system recently and I think the last round of our inspections has been completed.

1342. Chairman.—Paragraph 53 of the Report of the Comptroller and Auditor General reads as follows:

“Subhead K.13.—Bovine Tuberculosis Eradication Scheme

53. The expenditure is made up as follows:—

Receipts amounting to £1,102,807 were credited to appropriations in aid in the year on account of the sale of cattle slaughtered under the scheme.

The gross cost of the scheme from its inception in September 1954 to 31 March 1969 was £64,751,846 and receipts from the disposal of cattle for slaughter were £20,420,374. The net cost was therefore £44,331,472.”

1343. Have you anything to add, Mr. Suttle?

Mr. Suttle.—This paragraph is for information. The receipts from the sale of reactors showed an increase compared to 1967-68 despite a lower turnover of reactors. The average realised per animal by the Department was £47 compared with £38 in 1967-68.

1344. Chairman.—Is this figure of £2 million likely to continue or do you expect a reduction in it over the next few years?

Mr. Nagle.—I am afraid a figure of this order is likely for some years. As I understand it, the problem here is that you can, by a big effort, get the incidence of bovine tuberculosis down to, say, .02 per cent. Now, to get it to .01 per cent is a tremendous job and yet the object is really to eliminate the disease altogether rather than virtually to eliminate it but, when you get to the elimination stage proper, it becomes more and more difficult to do it. The British found exactly the same situation. In addition to that, we have found, as do Britain and other countries, that from time to time you get what may sometimes seem to be inexplicable flare-ups in particular areas. Suddenly the tests show that the incidence has jumped and that, of course, then adds to the cost because you have to go in and buy the reactors which you subsequently dispose of at a big loss.

1345. Deputy Dr. Gibbons.—When you get a flare-up on a particular farm do you try to find the source?

—That is always done and, of course, the farm is usually locked up. The blue cards are withdrawn. The reactors are taken out and the farmer is not allowed really to get into full circulation again with his animals until a test shows that he is quite free. To trace the origin of the infection can sometimes be quite baffling. I know the British had cases where the herds were, as they thought, absolutely self-contained and where there was the highest possible hygiene and suddenly the disease appeared. Where did it come from? An attempt is made to confine the disease and to discover its origin. We have a special brigade of our own going around investigating these particular problem herds.

1346. Deputy Keating.—There is an item of £1½ million for fees to veterinary surgeons. This, to me, is a delicate matter, but I notice in the next paragraph a sum of £⅛ million fees to veterinary surgeons in the case of brucellosis. The two things are linked. It will probably rise rapidly as brucellosis occurs. Is it the experience that it is possible to carry on routine testing for tuberculosis, or for brucellosis, by means of personnel trained to a lower level than the veterinary surgeon, leaving the veterinary surgeon, first, in a supervising capacity and, secondly, in the role of following up and checking on the figures revealed? I know the feelings of a large number of my own profession on this, but it is a very large expenditure and one that is likely to stay large. I was wondering if the question of having economies in this area, while safe-guarding the veterinary surgeons’ position, has been looked at?

—This is certainly a very delicate professional question. I know that the views of the profession would be that only the profession are really capable of doing this properly on the ground that they understand the whole background of the disease and that they have a thorough knowledge of the anatomy and physiology of the animals concerned, which they learn as part of their course, but I am not really aware of any country where this is entrusted to lay technicians except, possibly, in some African countries. I have an idea that in some of the newly emergent African countries this can be done by technicians. As to what results are produced I do not quite know.

1347. This would depend on the availability of personnel. If the personnel were available they would prefer to use the qualified veterinary surgeon?

—Yes. Not being a veterinary surgeon myself it is rather difficult for me to comment. I suppose one could say that these tuberculin tests are in two stages and that in the first stage, when the tuberculin is injected the operation is not so complicated, but the subsequent reading and interpretation of the test result is not at all easy. That complicates the issue. Part of the operation of tuberculin testing, I suppose, one could legitimately say, is not that difficult but part of it is quite difficult. On the blood test for the brucellosis I would hesitate. In other fields it is sometimes suggested that there might be more scope for properly trained lay technicians under veterinary surgeons and certainly in other fields of activity, not including these, I should be inclined to go along with that view.

1348. Deputy Collins.—I had complaints about delays in paying veterinary surgeons their fees. Has this been ironed out?—

—I should hope so. I have not heard any chronic complaints of late so I hope we are fairly up to date. Sometimes I suppose a veterinary account might be queried for one reason or another. Delays have occurred which should not have occurred but I think an effort has been made to put that right and that it has been successful.

1349. Deputy Gibbons.—Before going away from the cause of infection, do the staff approach this matter on the grounds that the source may be human?

—I cannot say that we do.

1350. I recall reading that in some European countries when they get positive tests in cattle every person in contact with the herd is x-rayed on the grounds that they might be a source of infection?

—I do not think we have any such arrangement here. There is the other aspect that it might be suggested that people pick up the infection from the cattle as well as transferring it to the animals. As far as I know and I am not an expert, I think the incidence of this particular form in human beings has practically vanished. I hope I am right in that.

Deputy Keating.—I think that among old people particularly in rural areas there is some persistence of it.

1351. Deputy Tunney.—I am amazed at all the knowledge Mr. Nagle has. Would he have any idea of the number of vets employed in this operation of tuberculin testing?

—In that particular year there were 488 principals who employed 240 assistants, all vets. The number of assistants is less than the number of principals for some reason. That makes a total of 728.

1352. And they employ auxiliaries for their own veterinary practice?

—Yes. This would be so but in some cases they are so busy at testing that it is their principal activity; in other cases no. In a big practice the principal vet might detail one or two assistants to do the testing and he might get on with the ordinary practice.

1353. Deputy FitzGerald.—What determines the payments?

—The payments are the result of very protracted negotiations between the Veterinary Association and the Department.

Deputy FitzGerald.—I see. The medical profession should take some lead from the veterinary profession.

1354. Chairman.—Paragraph 54 of the Report of the Comptroller and Auditor General reads:

“Subhead K.15.—Brucellosis Eradication Scheme

The expenditure under this subhead is made up as follows:—

Receipts amounting to £89,229 were credited to appropriations in aid in the year on account of the sale of cattle slaughtered under the scheme.

The gross cost of the scheme from its introduction in 1964-65 to 31 March 1969 was £1,255,222 and receipts from the disposal of cattle for slaughter were £287,710. The net cost was, therefore, £967,512.”

1355. Chairman.—Paragraph 55 of the Report of the Comptroller and Auditor General reads:

“Subhead K.16.—Scheme of Grants for Calved Heifers

55. The total cost of the scheme from its introduction on 1 January 1964 to 31 March 1969 was £10,306,947 comprising £9,791,010 grants for 652,734 calved heifers and £515,937 for travelling and incidental expenses. I understand that the scheme has been discontinued as from 30 June 1969.”

1356. Deputy Collins.—There is no more money outstanding?

—No. The scheme finished I think in the last financial year. It terminated at the end of June and I think all the payments would have been made by the 31st March. I see that there is a little still due. Some applications had to be deferred pending further inquiries but the amount would be small.

1357. Deputy Keating.—May I ask in relation to this scheme which costs a total of £10.5 million over five years approximately whether it is possible to define the objective of expenditure such as this and is it possible afterwards to measure the results? Was this considered by the Department to have been an exercise which produced the results desired at a reasonable cost?

—I think on the whole it would. Many things have been said about the scheme and nobody would claim it is perfect but I think its main objective has been realised reasonably well. That was to try to get up the number of cattle in the country. Other schemes would have been possible and many people think other arrangements would have been more desirable but after much consideration this is what it was decided to try for a period of years and in the course of those years two rather interesting things happened which were intended to happen. The first was that we at last broke through the extraordinarily static figure for cow numbers which for about 50 or 70 years had remained always around 1,200,000 or 1,300,000, fluctuating between the two. The figure gradually began to rise when the scheme came into operation and I suppose the scheme must be credited with at least some of that. The number of cows went up to something like 1,700,000 and I think there was a corresponding increase in the output of cattle. I have some very rough estimates here which I mention with all modesty and tentatively because, perhaps, a much deeper exercise would be needed. These figures are intended to indicate the benefit to farmers. First, our people costed the increase in cattle output as amounting to £76 million since the outset of the scheme. To that they added the increase in milk output, which was an inevitable concomitant of an increase in the number of cattle, at £55 million. To that they added the grants actually paid to farmers, something which, perhaps, is open to question, and these amounted to £10.5 million and all these amounted to £141 million.

1358. Deputy FitzGerald.—In what period?

—Cumulative since 1963. From that our people deducted a sum for increased farm costs attributed to looking after extra cattle and milk output which they put down as £40 million giving a net cumulative increase in farm income of around £100 million. In the course of this exercise they say they made allowance for the original diversion of heifers from the store and fat heifer trades.

1359. Is this based on the total increase or some proportion of the total increase?

—It is based on the total increase, I think. It is not stated but that would be my feeling. As I said, someone may ask: “Are you sure this is all due to the heifer scheme?” and I cannot say, but the heifer scheme had some influence on it.

1360. Deputy Collins.—There was a certain amount of criticism of the quality of the calves. In that respect the scheme was badly organised. That is a matter of policy I suppose but in any scheme to produce calves some attempt should be made to get quality calves rather than to have every quality of cow being put in calf. Some attempt should be made to get the better quality animal put in calf?

—Perhaps in the early years we were not careful enough about the quality but later on an effort was made to remedy that, with some success I think in the later years of the scheme. In the early years we were not sufficiently discriminating, I agree.

Deputy Collins.—My experience in the trade was that quite a number of middle-class animals were on the market and are still coming on the market. That is unfortunate because someone has to use them. They have to be exported either live or in carcase form and this militates against any other scheme of export promotion. More emphasis must be placed on quality.

1361. Deputy FitzGerald.—Was there not some argument to the effect that the scheme was unduly expensive and that the increase was only a fraction of the total number of grants paid, that people were induced to increase their herds to get the grant and then fell back again and that the net increase was only half the total amount? Have you a view on that with reference to the administration of the subsidy and the cost of it?

—That suggestion was made but I do not think there was much in it. In a study made by the Central Statistics Office some years ago this was one aspect we asked them to look into. I have not got a copy with me but I think that by and large they felt there was not much in it.

1362. It was very persuasive but it did not stop people arguing the opposite. I wondered what the final result of the controversy was?

—I do not think it is a wasteful scheme. It was open to certain criticisms such as that there was not sufficient concentration on quality at the beginning. It might also be said that there would have been an increase in cow and cattle numbers without the scheme but I do not think it would have been as big. In the early years I suppose a number of people did come into the scheme and some individuals earned a large number of grants. Of course they would be caught the next year because their basic herd would have risen.

1363. They would be caught?

—It was suggested that there was a certain amount of in and out manoeuvring. I think that is the point the Deputy was getting at. In the first year of the scheme, if I had the money I could buy a lot of heifers. I might previously have had only two and I might now have 200 and I would get the grants. It was on the increase in the numbers that you got the grant. But having done that in the first year and having my herd rated at 200 and not at two the next year I would have to have more than 200.

1364. Chairman.—Did not the scheme lead to excessive production of milk which we are now trying to get away from?

—This is the old dilemma. It is hard to separate the two.

Chairman.—It is a biological law.

Deputy Collins.—I agree with the Chairman that the scheme leads to a large increase in milk cows rather than beef cows being put in calf because of the added attraction of the milk subsidy.

1365. Deputy FitzGerald.—I do not think the accounting officer’s point met the point at issue because of the fact that having got the increase in one year you had a larger base for the second year. Is not the point that having increased your herd and got the grant you might revert back to where you were?

—There certainly were some such cases but my belief is that their overall impact was really quite small.

1366. Deputy Collins.—This practice of allotting basic herds to farms is continued when the farm changes hands. Is not that right?

—Yes, I think that is so.

1367. Deputy Collins.—I do not agree with this practice. I came across a case where a man with a few pounds bought a small farm and put some cows into calf but he only got a grant for two or three instead of 20. He was quite ignorant of the situation. I do not think he should have to suffer?

—You could have duplication of grants there. It is one of the things we were always very watchful about.

Chairman.—There has been a problem there.

Deputy Tunney.—You cannot guarantee this. In the case of the Land Commission schemes you cannot guarantee that the land will continue to be good land. I do not think you can examine a scheme in that fashion. This scheme has increased the cattle population and any ills should be examined separately.

1368. Deputy Keating.—This raises the point that particularly in the area of agriculture the sums of money required for a country of this size are exceedingly large. There is a school of economic opinion that suggests that grants lead to very little production or counter-production. I am not saying I agree with that but it can be argued cogently. The assessment of the success or failure of schemes like this is, in fact, carried out by the people who initiated them. I was saying to my colleague that this would be an interesting subject for a Ph.D. study. Is there any possibility that the figures could be made available so that an assessment could be made by people who are not committed to any organisation? Deputy Tunney might have one opinion and I might have another. This is a great area for the Department to throw open their files and I would urge them to encourage this type of independent assessment?

—There is nothing to conceal and I am sure we would facilitate any genuinely scholarly scientific interest.

1369. Have any such studies been carried out in the history of the Department?

—We are a large Department and we are trying to do, in a modest way, a certain audit of new schemes. It is done through our economics side which we hope to develop. They carry on in a reasonably independent way; there is no interference. They have been asked to do a kind of benefit assessment of some of those schemes.

1370. Deputy FitzGerald.—That was the answer given a couple of years ago in the Seanad?

—I think there were two things, Mr. Chairman. What I have mentioned is something fairly recent in our own Department, as part of our organisation. I think the other matter concerns the setting up of a committee on which not only we were represented but there was somebody from the university and from the Economic and Social Research Institute also.

1371. It was a cost benefit study?

—Yes. That committee has been sitting and its reports are before the Government. I was talking about our own departmental activities.

1372. Yes. It has made reports, then?

—Yes. This committee surveyed expenditure on agriculture generally, not only from our own Department but from other sources because, of course, we are not the only Department which spends money on agriculture. It has made some reports which I think have been submitted to the Government.

1373. Will they be published?

—That I could not say; it is a matter for the Government.

Of course.

1374. Chairman.—Paragraph 56 of the Report of the Comptroller and Auditor General reads:

“Subhead K.20.—Payments to Pigs and Bacon Commission

56. The original provision of £1,700,000 to support prices for pigmeat exports was increased by supplementary estimate to £2,600,000 but payments to the Pigs and Bacon Commission in the year amounted to £2,950,000, the excess having been met from savings on other subheads of the vote.”

1375. Have you anything to add, Mr. Suttle?

Mr. Suttle.—The accounts of the Commission for the year ended 31st December, 1968, have been presented to the Houses of the Oireachtas (Prl. No. 724). These payments were used so subsidise bacon exports only.

1376. Deputy E. Collins.—To what does this refer?

Mr. Suttle.—The sum of £1,700,000 was used solely for subsidising bacon; it was not used to subsidise pork.

1377. Chairman.—Are our exports of pig meat expanding?

Mr. Nagle.—In the last year they have been expanding. There has been an increase in pig numbers and this has been reflected in an increase in exports, particularly of pork. Our quota for bacon on the British market is about 28,000 tons; any production over that we send out as pork. That has been doing well, both on the British and continental markets where they have been rather short of pig meat in the past year. I am always very careful about forecasting the future of pig production, where there are so many abrupt up-turns and down-turns in prices. It is a very baffling business.

1378. Deputy E. Collins.—I think the Commission are sending out the wrong type of pork. They are trying to sell bacon pork carcases instead of a much lighter carcase. They would find a more ready market for this lighter-weight carcase in England and on the continent and this would also achieve a saving in Government expenditure?

—I do not know, Mr. Chairman, but it is a point I shall pass on to our own people and to the Commission. I know at one time many years ago the extra-light porker was in great demand on the London market. I am going back many years, but I had an idea that at present the extremely light porker had gone and that the medium-light porker was more popular.

1379 The Commission pay more for the heavier type carcase but get less for it on the foreign market. I think this is a wrong line to pursue.

—I can certainly have attention drawn to that point.

1380. Deputy FitzGerald.—There are several references to illegal smuggling made in the Report of the Pigs and Bacon Commission. If pigs are smuggled, does this involve the Exchequer in expenditure on the subsidisation of exports or otherwise?

—That could be the position, Mr. Chairman. Let us suppose there was some smuggling of pigs which would fall into the grades that are subsidised here; then that would increase the exports of pork and bacon on which a subsidy is paid. It would directly affect the Exchequer. In passing, I would mention a study which has been done informally and has not official status as yet. With the help of some university people at the other side, an econometric analysis has been carried out of pig movement between the North and the South and I understand the results have been quite the opposite to what most of us expected.

1381. In what respect?

—The conclusion arrived at was that in 1969-70 any net movement of pigs has been from the South to the North instead of the other way round. I saw the study the other day; it is not an official document but it has been done by a well-known and very skilled economist at the other side.

Deputy E. Collins.—The whole question is rather complicated.

1382. Deputy FitzGerald.—It concerns us in so far as there is a diversion of State funds to a wrong purpose. Can anything be done to prevent this, either by changing the method of subsidisation or by tighter control at the factories? It is very difficult to identify one pig from another?

Chairman.—You could not distinguish orange pigs from any other pigs!

Deputy FitzGerald.—You could dye them orange!

—If the Northern Ireland pigs were all marked or ear-punched, then we could do something.

1383. Deputy FitzGerald.—Have we raised this point with the authorities there?

—There have been some talks. I think they also are anxious to control this. It must be added, of course, that in this Border movement some products are moved down here and others are moved northwards. I should not care to estimate what is the net balance in agricultural terms.

1384. Deputy FitzGerald.—Either we have national policies which are sound, in which case they should be enforced, or if they are not sound they should be changed. If policies which are sound are not properly enforced, then this is wrong.

Deputy E. Collins.—There could be some difficulty in policy here. Suppose we are not meeting our quota of bacon on the British market?

Deputy FitzGerald.—Then we should remove the restriction on pigs coming in. I do not understand this position of making it illegal for pigs to be brought in and, at the same time, stating they are needed, unless there is some devious explanation I have not heard. It is a matter of Government policy to decide what to do. However, maybe that is a policy comment?

Chairman.—It is a policy matter.

We will adjourn our examination of this account now and resume again next week. Mr. Nagle will be able to come back to assist us?

—Certainly, Mr. Chairman.

The witness withdrew.

The Committee adjourned at 1.20 p.m.

*See Appendix 34.

*See Appendix 35.