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, 30 Aibreán, 1970.

Thursday, 30th April, 1970.

The Committee met at 11 a.m.

DEPUTY HOGAN in the chair.

Mr. E. F. Suttle (An tÁrd-Reachtaire Cuntas agus Ciste) and Mr. S. Fitzgerald (An Roinn Airgeadais) called and examined.

VOTE 37—AGRICULTURE (resumed).

Mr. J. C. Nagle called and examined.

1385. Chairman.—We resume consideration of this Vote with paragraph 57 of the Report of the Comptroller and Auditor General which reads as follows:

“Subhead K.21,—Losses on Disposal of Wheat, etc.

57. The total loss incurred by An Bord Gráin on the disposal of unmillable wheat of the 1967 crop amounted to £448,484 towards which £440,000 was issued in the previous year. To offset the cost of meeting this loss a customs duty of £3 per ton was imposed on wheat imported on or after 20th February, 1968, and up to 31st March, 1969, this duty had yielded £373,256.

£900,000 was also paid to An Bord towards the estimated loss on the disposal as animal feed of approximately 90,000 tons of wheat of the 1968 crop which was surplus to milling requirements.”

1386. Have you anything to add, Mr. Suttle?

Mr. Suttle.—The losses incurred on the disposal of unmillable wheat of the 1967 crop have since been offset by the customs duty. The duty terminated in October, 1969. The accounts of Bord Grain to 31st August, 1969, disclosed that losses on the disposal of the 1968 crop amounted to approximately £1,700,000.

1387. Deputy FitzGerald.—There do not seem to be any comparative figures?

Mr. Suttle.—There is no question of comparison between one year and another in the disposal of wheat because it depends on the crop and the crop varies from year to year. As Deputies can see I referred to unmillable wheat in relation to the 1967 crop but in 1968 there was no unmillable wheat; there was a surplus of millable wheat. There is no question of comparison between one year and another except to the extent of administrative expenses which are only a minor part of it.

1388. Where was this wheat sold?

Mr. Suttle.—The unmillable wheat of the 1967 crop was sold as animal feed. I think the millable wheat was sold as animal feed also.

Mr. Nagle.—Yes. The unmillable wheat of the 1967 crop was sold as animal feed at the animal feed price and the surplus millable wheat from the 1968 crop was sold, in so far as the surplus had been disposed of, for animal feed also, at the animal feed price.

1389. Deputy FitzGerald.—Does this give a better return than selling it on the export market?

Mr. Nagle.—Yes. The price at which the wheat was disposed of for feed is related to the price for feed barley and both prices would be in excess of the price at which either feed barley or feed wheat can be imported.

1390. Chairman.—There was a loss of £140,000 on the 1967 crop and a loss of £900,000 on the 1968 crop. Is that correct?

Mr. Suttle.—The accounts of An Bord Gráin showed a loss of £1,700,000 on the basis that they took into account stocks they had on hand at selling prices and not purchasing prices. Therefore, that would affect the total loss involved on that crop.

1391. Deputy FitzGerald.—The estimated loss was £900,000?

Mr. Suttle.—That was the amount provided by the Dáil by way of Votes to cover losses but, of course, the losses far exceeded that figure.

1392. The report says that £900,000 was paid to an Bord towards the estimated loss on the disposal of animal feed of approximately 90,000 tons of the 1968 crop. Somebody estimated a loss of £900,000 on the disposal of 90,000 tons. How many tons were, in fact, disposed of at a loss of £1,700,000?

Mr. Suttle.—There were 21,000 tons still on hand at the 31st August, 1969, This figure of a loss of £1,700,000 represents the loss on the total purchases.

1393. Does this mean that 90,000 tons was the total amount to be disposed of?

Mr. Suttle.—Yes.

1394. Therefore, although it was estimated that the surplus would be disposed of at a loss of £900,000 it actually cost £1,200,000?

Mr. Suttle.—The figure of £900,000 was the original estimate.

Mr. Nagle.—I should think it was recognised at the time that the entire surplus from the 1968 crop, which was absolutely unprecedented, could not be handled and disposed of within the financial year 1968-69. The figure of £900,000 was really in the form of an instalment to cover losses accrued before the end of that financial year but, of course, further losses have since been covered. There has been a Supplementary Estimate in the year 1969-70 of, I think, £500,000 to cover losses on the 1968 crop. Perhaps the figures relating to the total production and surplus will help the Committee?

Chairman.—Yes, they would.

—First of all, let me say that the 1968 crop was a crop which produced all time high yields approaching two tons an acre undried. It is hardly an exaggeration to say that this was fabulous and that nobody expected a yield of that kind. As a result, the total production in dried terms was about 330,000 tons. Again, a most remarkable output. This was the yield after the wheat had been brought to the point where it was ready for milling. I must mention two different figures for the surplus for a reason which I shall explain. The first figure is 71,000 tons. I arrive at that figure by deducting a figure of 260,000 tons from 331,000 tons— 260,000 tons being the quantity guaranteed by the Government in relation to prices without any deduction by way of levy. On the other hand, because of the decline in the consumption of bread and flour 75 per cent of the total grist required for flour and bread during the 1968-69 period amounted to no more than about 240,000 tons. This increased the actual physical surplus from 71,000 tons to about 91,000 tons. That explains the 90,000 tons. On the disposal of that total for animal feed the loss would approximate to about £20 a ton so that the total would be £1,800,000 of which £1,400,000 has been provided by way of Votes from the Oireachtas. This amount has been paid by the Department during the financial years, 1968-69 and 1969-70. Of the original surplus, a quantity of some 17,000 tons still remains with An Bord Gráin. The Committee will realise that accounts for most of the balance between £1,800,000 and the £1,400,000 that has been paid.

1395. Deputy FitzGerald.—What about the levy?

—No levy was applied during the year 1968 and, of course, in retrospect it was quite obvious that a levy should have operated. The procedure under the 1958 Act up to that year— it has been changed since—was that as soon as the acreage for the year was known—which would be about the middle of July—an estimate was then made of what the production was likely to be. That was done in the year 1968. Various figures were worked out on the basis of experience in the three previous years. The three previous years were taken separately and the result applied to 1968. The three previous years were also averaged and the average was applied to the 1968 acreage. When I say the experience of the previous three years was taken into account I mean not only the actual yield of green wheat per acre, but—what was also very important—the amount of wheat which was unmillable in each of those years and the amount which was classified in those years as potentially millable but was not in fact actually used for milling. All those factors were applied to the 1968 figures. No matter what our people could do or an Bord Gráin, who were consulted on this matter too, even allowing for a better experience both as regards yield and millability from the 1968 crop than the three previous ones, it seemed clear at that time that there was no prospect on that basis of exceeding 260,000 tons. Of course, it is perfectly clear that there was in fact a surplus of over 70,000 tons over and above that. It is true to say that 1968 was an abnormal year. It was a wonderful year but at the same time it became obvious that something would have to be done about the method of calculating the levy in the future. That in fact has been done. The new procedure, as the Committee know, is that a provisional deduction is applied as soon as the wheat begins to come in. Last year the provisional deduction was 15/-. Then, when one has all the returns from the mills, the intake, etc., and the position is clear, a final determination of the levy is made. If the deduction has been greater than the levy amount the difference is refunded. That has been done and completed for the 1969 crop.

1396. What would be the yield on this 15/-in a normal year? Would it have yielded this sum of £1,700,000 or a substantial fraction of it?

—In the procedure we operated in 1969 a levy of 12/- per barrel would have been necessary to cover all the loss per barrel of 20 stone. In 1969, when the output was not quite as great, the amount of levy was 8/3 per barrel.

1397. So, 15/- makes an adequate provision?

—Yes. That was one of the reasons that the provisional deduction in 1969 was set at 15/-which proved excessive.

1398. You mentioned there is still 17,000 tons to be disposed of at this stage?

—It is still in the hands of An Bord Gráin. If I may say so there are two other complications. One of those has only arisen in the last year. The millers are still carrying some surplus and this is due to a couple of factors. First of all, when the grist percentage of Irish wheat was raised to 75 per cent on the basis of the 1968 harvest the milling industry did not apply that 75 per cent actually until I think early December for various reasons. One of the reasons was that they were awaiting a price determination on the cost of flour. The amount of wheat represented by the fact that they did not raise the figure to 75 per cent for a couple of months was around 22,000 tons. Another factor was that the consumption of flour and bread in 1968-9 did not represent quite as much as 240,000 tons. There were two factors. The fact that the 75 per cent was not applied for a couple of months and the fact that in any event the total consumption as purchased by the consumers here did not quite equate to 240,000 tons.

1399. Does this mean that the surplus in fact was greater than 95,000 tons?

—Yes, in that sense but some of that is now in the hands of the millers over and above what I mentioned being in the hands of An Bord Gráin.

1400. Will that be taken into account in fixing the amount for the current year? Assuming you calculated the amount required for bread was 220,000 on the basis of the trends would you take off that the amount they have in stock so that the amount they would be required to take would be appropriate to their needs?

—There has been a big reduction in what we call the guaranteed quantity, that is the quantity up to which no levy applies. In the year 1970 it is down to 230,000. The decline in consumption is proceeding apace. It is just possible that in 1970-71 the consumption may be somewhat less than 230,000.

1401. Deputy Nolan.—What figure are you working on now? It was 240,000?

—This year it is 230,000, the guaranteed figure.

1402. Deputy FitzGerald.—We have distinguished two things here, the guaranteed figure, which is what determines the price to the farmers and the amount the millers take. What happens if they are required to take more than they can dispose of? If they are carrying excess stocks will this be taken into account when you come to determine the amount they must take in the current year or are they expected to go on carrying excessive stocks?

—The feeling is that all those complications go back to the 1968 crop and that really it would not be fair to penalise the growers in subsequent years for the fact that incorrectly, as is now known, a levy was not operated in that year and also the fact that the quantity guaranteed by the Government may turn out to be somewhat greater than the strict equivalent of 75 per cent of the grist. Of course, somebody might say “Could riot the 75 per cent be increased?” but a whole lot of technical problems arise then about protein and millability and also a price question arises because the more Irish wheat in the grist the more expensive flour becomes.

1403. Deputy Nolan.—Is this 17,000 tons in the hands of An Bord Gráin not animal feed? Have you not written it off as surplus?

—Yes, but they are still holding it and it has not yet been disposed of so we have not put it through our books by way of a loss.

1404. Deputy FitzGerald.—It is provided for here as valuation? Do you think this is a realistic valuation? Are you convinced it will be disposed of at the price for which £21,000 was set aside or is this an unrealistic figure?

—I have no doubt the loss between the price at which the wheat was bought and the price it was disposed of as feed can always be taken in and around £20 or £19.10s. It seems to be a rather static figure.

1405. The fact that you have not disposed of the 17,000 tons from the 1968 harvest by April, 1970, adds very considerably to storage costs in the intervening period since August last year. Are you convinced this is a realistic assessment of what will be disposed of eventually?

—I understand the board has turned the wheat around. It may not be the selfsame wheat.

1406. Does that affect the economics of it at all?

—It helps the storage and interest rates.

1407. How?

Deputy Barry.—They dispose of the 1968 surplus and substitute the 1969 surplus.

Deputy FitzGerald.—The same amount of wheat is stored and the same amount of interest must be paid on it. This only ensures that the wheat is fresher.

Mr. Suttle.—There would be a gap between the sale of one lot of wheat and the purchase of the next lot and that gap will relieve the interest and storage charges.

Deputy FitzGerald.—I do not understand that.

Deputy Nolan.—The wheat could be of a better quality.

1408. Deputy Barry.—If the 17,000 tons of undisposable 1968 surplus were written off as a loss by the State, could the 1969 surplus then be treated separately?

Mr. Suttle.—When an Bord Gráin produce their accounts they are only interested in the actual sale of surplus wheat which they have taken on hands. On that basis they assume they would lose £19 or £20 a ton and make allowance for that in their accounts. They showed the loss as £1,700,000 but the accounting officer will only meet that loss when the wheat has actually been disposed of and the loss is actually ascertained. On that basis he has paid only £1,400,000 to An Bord Gráin, but from the point of view of An Bord Gráin that wheat cannot be disposed of as millable wheat; it will be disposed of as feed wheat.

1409. Deputy FitzGerald.—Can you explain how by turning it over you reduce interest and storage costs? Does turning over actually mean that this 17,000 tons is not 1968 wheat but 1969 wheat?

Mr. Suttle.—I do not know the present position.

Mr. Nagle.—I think that could well be the position, but quite frankly the saving is largely due to this: when an official body takes over the storage it seems to cost more because everything is naturally charged up. I think their idea was that turning it over would cost the taxpayer less. The other point I should mention is that, while 1968 was a wonderful year, there was no guarantee that 1969 would be either wonderful or good. So much depends on the weather during harvest time, although mechanisation is a great help because it shortens the harvest period. But it is still possible to have a bad wheat harvest. I think the Government felt it would be undesirable to get rid of all the surplus wheat before the 1969 harvest in case they found themselves with a very low yield and had to import foreign wheat at a heavy cost. The out-turn of the 1969 harvest was not fully clear until the end of September. During September it began to look good but it was not until the end of September that we knew we had another very good year. We cannot guarantee that we will get three good crops in succession and 1970 may not be a good year but I agree that one can overdo that. It is a question of assessing the risks and costs.

1410. Deputy Tunney.—Are these bigger crops attributable to climatic conditions or are we getting an increased acreage? Is this increased acreage as a result of the guarantees and the fixing up of surpluses, because if that is the case I think it might be something which we might discourage?

Mr. Nagle.—The acreage fluctuates a bit but it is not very high.

1411. It appears to me that there is greater acreage of land under wheat in County Dublin. It strikes me that the farmer is getting a subsidy towards growing something which later on will be subsidised and given back to him for animal feeds?

—The acreage actually dropped in 1969 by 20,000 acres, but it is believed to be up again this year. The quality and yield are more important than these shifts in acreage. The proportion which is millable is of vital importance, as we learned from our unfortunate experience in 1968. In 1961 we had 344,000 acres, which is 50 per cent more than in 1968 but we had nothing like the crop which we had in 1968.

1412. Deputy Nolan.—Does the 75 per cent Irish wheat in the grist remain constant or does it fluctuate?

—The 75 per cent has always been the Government’s guideline as to the quantity of good Irish wheat, taking all the technical factors into account, which they think the grist should consist of. Experience has shown that it is possible to change, but we have never departed either up or down from the 75 per cent idea. According to my memory, 1968 was the first year in which it was possible to raise the percentage to this particular target of 75 per cent.

1413. Assuming this year’s harvest is not good from the point of view of millable wheat, will the 17,000 tons of good millable wheat which you have in stock from last year be replaced with 17,000 tons of this year’s crop. Is the main idea behind this to hold on to a certain amount of good wheat?

—Apparently this is the idea. In any of these transactions we have to phase in the sales of a product grown for a certain purpose, which is surplus to that purpose and is devoted to another purpose. We have to be terribly careful about how we phase that into the whole feed market so as to avoid unduly abrupt changes in the pattern of consumption of animal foodstuffs. If pigs were getting rations containing 10 per cent wheat and the wheat content was suddenly changed to say 50 per cent there would be difficulties.

1414. Was there some mention of duty on imported wheat?

Mr. Suttle.—That was in 1967; the millers were allowed to import or use in the grist a very much higher proportion of imported wheat. Customs duty was imposed on that wheat as they were getting it at a cheaper price to offset the loss arising from the unmillable wheat which the board had taken over.

1415. Was that duty also on wheat offals?

Mr. Nagle.—It was on the importation of wheat.

Deputy FitzGerald.—It was only designed to prevent the price of bread from falling.

1416. Deputy Dr. Gibbons.—Can we hope the quality of Irish wheat will improve so that more than 75 per cent can be used?

—I would hope so. First of all, there is the economic question. The cost of flour and bread and industrial costs are also important—the millers’ costs, wages, all that kind of thing. We would hope that and in spite of all these tribulations and mistakes of the past two years, it has at least been proved that the country can use a considerable amount of Irish wheat. It is also true to say that while there is always room for improvement the native varieties of spring wheat which are now in common use and which have evolved within the past ten or 15 years are proving very successful under our conditions and that, coupled with the increasing mechanisation of the crop, may put the risks involved in a different light in the future. Of course, there will always be risks with a crop like wheat but in the future they may not be as extreme as they were, say, ten years ago.

1417. Deputy FitzGerald.—May I come back to the point mentioned earlier and which I did not understand—that by turning over the crop in storage, which I take to mean selling the 1968 crop in 1969 and which otherwise would have been sold for ordinary use—that there were savings in interest and storage charges. It seems to me that if one is substituted for the other, storage and interest charges should remain the same—

Deputy Barry.—The cost of handling charges increase.

Deputy FitzGerald.—The handling charges may be increased, as Deputy Barry has pointed out, but perhaps these would be offset against some gain that might accrue from the wheat not becoming musty as a result of being stored year after year?

Mr. Suttle.—There would be a gap between the date of sale and the date of repurchase which would result in lower storage charges. If, for instance, wheat is sold in one week and replaced the following week, even the week’s gap would make a difference in so far as storage charges are concerned. Purchases are done by means of bank overdrafts which are usually very substantial and a gap of a week between the time of purchase and resale would result in a saving both in interest due to the bank and in storage charges.

1418. Deputy FitzGerald.—There is only a week involved. Would this be the minimum time?

Mr. Suttle.—I do not know what was the length of time in connection with the 1969 crop as I have not dealt with it yet but it could be more than a week—it might be a month.

1419. It could not have been very long because we are talking about the harvest period which is a very short period of time.

Mr. Nagle.—I was thinking purely of the Exchequer cost. Perhaps there were costs to other interests. If something like this actually happened—this is only speculation—the Board physically got rid of the original 17,000 tons at a certain point. One of the reasons also might have been that because the longer wheat is stored, the greater is the risk of deterioration and it would be sensible of the Board to avoid that risk. If they had done that, it would not follow that immediately they would have to buy another 17,000 tons to replace the original lot. The 17,000 tons would have been bought by them from the millers and put into circulation, and from the Government accounting point of view, they must replace it but not necessarily immediately. There is also the possibility that someone may have been holding 17,000 tons and may have chosen not to replace it for some time.

1420. If the 17,000 tons was a surplus, how could they dispose of it in competition with the 1969 crop without taking in the 1969 crop almost simultaneously?

—It would have been disposed of for animal feed through the compound feed manufacturers as is all surplus wheat.

1421. If it could have been disposed of in that way before the 1969 crop came in there was not a surplus carried over?

—I did not say when it was disposed of. I think it was disposed of at some time and replaced. I was trying to explain the reasons why this might have been done.

1422. There is not a constant figure?

—I could obtain the facts for the Committee.

Mr. Suttle.—The accounts of Bord Gráin are only up to the 31st August which, in effect, is the end of the season before the new crops come in and those accounts do not take into consideration the 1969 crop. On that basis they had 21,000 tons at the 31st August but the accounting officer says they still have 17,000 tons. I would not have any information on what wheat that represents.

Deputy FitzGerald.—That is why I was puzzled by the statement that there was a saving in storage charges which clearly relate to the next financial year about which we have no information anyway.

Chairman.—I take it that the figures would very from one month to another?

1423. Deputy FitzGerald.—It obviously means a diminishing figure. If the surplus continues to exist from the 1968 crop, and this surplus has not been absorbed by a shortfall in the 1969 crop how could there have been any significant saving in storage charges? Did the saving occur in the year ended August, 1969, or in the current year?

Mr. Suttle.—Bord Gráin do not take wheat into storage and hold it there permanently. There is constant dealing in wheat. It is not a question of holding it, of disposing of it or of selling it off in bulk. I do not know what was the position in 1969 but in 1968 the Board started with a surplus of 90,000 tons of the 1968 crop and had disposed of more than 60,000 tons by the 31st August, 1969. That was done on a day-to-day basis. There was no question of bulk sale.

Deputy FitzGerald.—I raised this point by saying that since there was an amount of 17,000 tons outstanding from the 1968 crop there must be an accumulation of interest and storage charges but the reply I have been given was to the effect that it was not as simple as that; that by turning over the crop, interest and storage charges had been reduced. However, nothing I have heard can explain to me how that could have happened on any significant scale. Perhaps instead of our wasting time on this point we could have a note detailing what was the saving.

Deputy Gibbons.—Assuming that the Board had 30,000 tons on 1st August and if they took that from storage and had it milled, the next wheat to be milled is the current crop that has come in and had not been stored at all. Therefore, their store is empty. At the end of the milling period they must continue to take this extra wheat which cannot then be milled but must go into storage. It is only at that stage when the current supply is turned out to the consumer that they find they must now store the extra wheat so that in other words they have a deposit account as compared with a current account. One might ask where is the wheat in the meantime. The answer is that it is with the farmers or in drying kilns.

1424. Deputy FitzGerald.—I cannot quite follow that because if, in fact, all the wheat of the 1968 crop was disposed of at that point before the 1969 crop came in this 17,000 ton surplus must have come from the 1969 crop but we have been told it has not come from the 1969 crop but that it arises from the 1968 crop and it is for that reason that the Exchequer must finance the surplus?

Mr. Nagle.—The cause goes back to the 1968 crop. I will be glad to send a note giving some detail.*

Mr. Suttle.—There is another aspect too. We are dealing with the Department’s accounts up to 31st March, 1969. We brought in the accounts of An Bord Gráin up to August, 1969, but this is really a problem for 1969-70 which can be dealt with by next year’s Committee. It is not a current problem. If there is any loss or any gain involved it can be dealt with in the accounts next year.

Chairman.—The accounting officer has offered to send us a note so perhaps we can leave it at that.

1425. Paragraph 58 of the Report of the Comptroller and Auditor General reads as follows:

“Subhead K.22.—Beef, Mutton and Lamb Export Guarantee Schemes

58. The cost of supporting export prices of beef, mutton and lamb amounted to £2,402,038 in the year under review. The total cost of such support to 31st March, 1969 was £10,586,015 of which £188,550 was paid under a temporary scheme which operated from February, 1965 to June, 1966.

Under the terms of the Anglo-Irish Free Trade Area Agreement the provisions of the United Kingdom fatstock guarantee payments scheme are applied annually to limited quantities of Irish carcase beef, mutton and lamb imported into the United Kingdom. In accordance with this Agreement sums totalling £1,350,000 were received from the United Kingdom Government during the year, being £640,000 as a further payment on account for 1967-68 and £710,000 for 1968-69.”

1426. Have you anything to add, Mr. Suttle?

Mr. Suttle.—Receipts from the United Kingdom Government to 31st March, 1969, amounted to £3,194,779 so that the net cost of the scheme was £7,391,236.

1427. Chairman.—How much of this subsidy of £2.4 million related to carcase beef?

Mr. Nagle.—£2.4 million covers beef, mutton and lamb. By far the greatest part is attributable to beef because beef exports amount to something like 75,000 or 80,000 tons whereas the lamb exports would be around 5,000 or 6,000 tons. Most of the £2.4 million would be for carcase beef.

1428. Deputy FitzGerald.—Where are these payments set out? Is there some account where we can see what the total cost was and what the British contribution was in respect of each of these each year?

Mr. Suttle.—It would be very difficult because the money comes from England not based on actual day-to-day transactions but in bulk sums. At the end of any year the British would owe us some money.

1429. I was not asking about the cash flow. That is a separate thing. In respect of any given year there must be some account which shows that the British are due to pay us so much in respect of so many tons of beef and so many tons of lamb. When they pay is a separate issue. Where can one get an account which sets out the total cost and how much is the British share in that cost in respect of each commodity in respect of each financial year?

Mr. Suttle.—There is no such account available.

1430. Could we have one? I find this one of the odder absences from our public accounts. We have this arrangement with Britain and we cannot find out how it is working, although it is in aid of an easement of the Irish Exchequer?

Mr. Suttle.—The total receipts from Britain to 31st March, 1969, amounted to £3,194,779 leaving the net cost of the scheme to the Irish Exchequer at that date at £7,391,236.

1431. Is this the amount actually received?

Mr. Suttle.—Yes.

1432. You are talking about the cash flow. What I am concerned with is the amount payable in respect of each year and in respect of each commodity. We do not have this?

Mr. Nagle.—I could give the overall figure for 1968-69 irrespective of actual payments. The total British liability in 1968-69 was £900,000 and the Irish liability £1,500,000.

1433. How is that broken down?

—The expenditure, as set out here, was £2,400,000 but of that the British were liable for £900,000 in that particular financial year.

1434. How was that divided between the English and the Irish?

—The overall figures were as follows: in relation to the £2,400,000 the total beef subsidy was £2,180,000 and the total mutton and lamb just a little short of £220,000.

1435. And the British share in each?

—I suppose it would be roughly proportionate to £900,000 to £1½ million. I have not got the actual figures.

1436. I wonder if we could have these for each of the years the scheme has operated?

—Certainly, up to 1968-69.*

Mr. Suttle.—The British figure will not change. It will not be a proportion of the expenditure because it is paid in fixed quantities laid down in the trade agreement and the more we export the more we lose, in effect.

1437. May it not vary if prices vary?

Mr. Suttle.—It could but it will not be a proportion of the total expenditure.

1438. Chairman.—When Budget returns are made and amounts are given by which agriculture is subsidised is the net figure given? For instance, for the year 1968-69 is the British contribution deducted from the subsidy which is calculated as given to the farmers?

Mr. Nagle.—You are referring to the £90 million figure of total support? I would have to check on that. Yes, the British recoupment is deducted. It is the net expenditure which is taken into account.

1439. Deputy E. Collins.—I think the farmers have not availed of the opportunity to get the grant directly?

—They have not.

1440. The scheme has now been finished?

—It is just not utilised. I think it is still open but nobody avails of it.

1441. I understand there have been a number of delays in the payment of subsidy because the British Ministry did not pass subsidy certificates back to the Irish Department. Could this be speeded up?

—Certainly. I am sure if there are any defects of that nature we would be glad to have them looked into.

1442. Chairman.—Is this recoupment from the British Exchequer paid to the farmers or to the Department?

—It is paid to the Irish Government under the Free Trade Area Agreement. It comes in as Appropriations in Aid.

1443. Deputy E. Collins.—Would I be right in saying the reason for not passing on a penny of last year’s English subsidy was due to Budgetary difficulties. There was a public statement on that?

—This did not happen until the financial year 1969-70. Up to the 31st March, 1969, the full equivalent of the deficiency payment was paid in terms of dead weight and this particular adjustment took place at the beginning of April, 1969. It is policy to some extent.

I wonder was there an official statement from the Department or the Minister? This is just to refresh my memory?

—There probably was not.

1444. Chairman.—Would you be able to give us any information on the export of carcase beef for the year 1969?

—I do not know if I have the exact figures here but I know so far as tonnage goes it went very well. I have figures here for slaughterings in financial years but 1969-70 would cover nine months of the year 1969. The slaughterings of steers and heifers in that financial year were 396,000 as compared with 347,000 in the financial year 1968-9 showing there was an increase.

1445. Deputy Nolan.—If you go back further, to 1964-5, have you the figure for that year?

—No. The figure I have given was exceeded in some previous years, probably 1966-7.

1446. Chairman.—I have the figures for the export of carcase beef in tons. In 1966 it was 41,000. There was a tremendous jump in 1967 to 108,000 and it went back in 1968 to 89,000. Have there been any further increases?

—It went up in 1969 compared with 1968.

1447. Deputy Nolan.—The numbers of cattle on the hoof dropped back?

—Yes.

1448. By what percentage? Have you any figure?

—There was a rise in the slaughterings of steers and heifers which would be mainly for the British market from 347,000 in 1968-9 to 396,000 in 1969-70. In the financial year 1968-9 store cattle exports numbered just a shade under 600,000 head and in 1969-70 we estimate them at 510,000, that is a drop of about 90,000 head.

1449. Would you try and equate the two figures? The overall export of meat would have gone up?

—The slaughterings of steers and heifers increased by 50,000 head whereas the store exports fell by 90,000.

1450. Deputy E. Collins.—It would not have an effect on the overall figure?

—One would certainly have an effect on the other. The drop in the export of stores is only partly explained by the increase in the slaughterings of steers and heifers.

1451. Deputy Nolan.—Is there any reason for the net drop?

—It is difficult to say. It is not due to any fall in the total number of cattle but we come across this experience quite frequently. People may carry cattle from one season to another. They may be speculating on the future, whether they will have a mild winter in which they can carry cattle and so on.

1452. Deputy E. Collins.—Would those exports include the Six Counties?

—The store exports would include Britain and the Six Counties.

1453. Have you got the breakdown of the exports of stores to the Six Counties?

—I do not have them here but they are fairly substantial. They are not segregated. They are segregated in the monthly trade figures.

1454. Chairman.—Paragraph 59 of the Report of the Comptroller and Auditor General reads:

“Subhead K.27.—Marketing of Oats, 1968 Crop

59. A scheme was introduced during the year to encourage the production in certain western counties of good feeding quality oats. A minimum price of £22. 10s. 0d. per ton was fixed, with an added premium for higher quality, and it was arranged that An Bord Gráin would, on 31st December 1968, take over at prices of from £28 to £29 per ton any balances of unsold oats grown in the specified area. Some 14,000 tons were dealt with under the scheme and of this quantity 2,700 tons were purchased by An Bord Gráin. The sum of £15,000 paid to An Bord from this subhead represents a payment on account of the anticipated loss on re-sale.”

1455. Have you anything to add, Mr. Suttle?

Mr. Suttle.—The accounts of Bord Gráin show a loss of £20,395 at 31st August, 1969, in disposing of oats. About 50 tons of 1968 crop still remained to be disposed of at that date.

1456. Chairman.—How is this scheme worked in general?

Mr. Nagle.—It applies, of course, to what we call the western counties, that is twelve counties, including part of West Cork, which for this purpose is treated as a county. A minimum price is set which corresponds to the minimum price for barley and it is implemented by An Bord Gráin somewhat similarly to their function in regard to barley. They are ready at a certain date to take over an oats offering from those counties on a quality basis at the prices specified here. This is very similar to how they operate the barley guarantee scheme. They then eventually dispose of the oats at the best terms they can. As was expected, some loss was sustained but it was felt, first of all, that the scheme could not cost a tremendous amount of money, which it has not. Secondly, by and large the western counties do not enjoy the same advantages in regard to guaranteed price for grain as the remaining counties. For example, the guaranteed prices for wheat and barley benefit the eastern parts of the country and the southern parts of the country more than the west. Oats is a typical crop for the west and it was felt we should give them some similar guarantee to that given to the wheat and barley growers.

1457. In effect, how has it affected the importation of oats?

—The scheme is still pretty new but it possibly has helped on the quality side. There was so much uncertainty about the price for oats that there was no real permanent incentive for growers to produce the best quality grain which would be suitable for oatmeal milling or the bloodstock industry. It would be a little early to say if the scheme has had a marked influence on the quality. It is something which we hope will become more and more apparent in the future. It has to be up to a certain quality to benefit from this particular scheme.

Particularly for the bloodstock industry?

—Yes.

1458. Paragraph 60 of the Report of the Comptroller and Auditor General reads:

“Subhead K.28.—Grants for Drying and Storage of Oats

60. In order to encourage the provision in certain western counties of extra storage and associated drying facilities for oats a scheme was introduced during the year to provide grants for the erection of grain stores. Grants at the rate of 35 per cent of the approved and certified costs of plant and buildings are payable and twelve grants amounting to £25,769 were paid in the year.”

1459. Have you anything to add, Mr. Suttle?

Mr. Suttle.—This scheme is allied to the oats marketing scheme referred to in the previous paragraph. It was not a continuing scheme and I understand that all applications are fully dealt with in the year.

1460. How many storage units were erected?

Mr. Nagle.—The total number of grants paid was 12 costing, as is said here, £25,769. The additional storage provided under the scheme was estimated at nearly 3,400 tons and the additional drying capacity is similarly estimated at something like 48 tons an hour.

1461. Paragraph 61 of the Report of the Comptroller and Auditor General reads:

“Subhead N.1.—Milk Production Allowances, Marketing of Dairy Produce, etc.

61. The expenditure is made up as follows:—

The payment to An Bord Bainne is accounted for in the accounts of An Bord which are audited by me.

The creamery milk price allowance continued during the year under review at a rate of 7d. per gallon and was supplemented as from 1st September 1968 by an additional allowance of 1d. per gallon on the first 7,000 gallons per annum delivered by each creamery milk supplier. The special allowance for high quality creamery milk continued at a rate of 2d. per gallon. I understand that two-thirds of the milk supplied to creameries qualified for this allowance.”

1462. Have you anything to add, Mr. Suttle?

Mr. Suttle.—This paragraph itemises the cost of support for the dairy industry. Expenditure increased by about £6 million compared with the previous year.

1463. Paragraph 62 of the Report of the Comptroller and Auditor General reads:

“62. It was observed in the course of audit that milk price allowance was paid to a co-operative society in respect of milk imported across the land frontier. On inquiry I was informed that such milk did not qualify for the allowance and that creameries and separating stations had been so notified. The observed cases of irregular claims have been adjusted.”

1464. Have you anything to add, Mr. Suttle?

Mr. Suttle.—The irregular claims occurred soon after the introduction of a scheme in the Six Counties which benefited herd owners who forebore from selling milk in the Six Counties.

1465. Deputy FitzGerald.—It says here that the observed cases of irregular claims have been adjusted. That seems to imply that there were other irregularities which were not observed. Has a complete study been carried out since?

Mr. Nagle.—I think there has. As soon as the scheme to which the Comptroller and Auditor General has referred came to our notice a circular was sent to all creameries to the effect that no subsidy could be paid on any such milk. Certain changes were devised in the forms which creameries are required to submit and in due course this revised form indicated that in four cases the creameries themselves had paid this production allowance on cross border supplies which they should not have done. The creamery records of all the creameries in the border counties were inspected by our dairy produce inspectors. They went through the books and they finally certified the amount of overpayments by these creameries and this was adjusted as between our Department and the creameries who, I suppose, were at a loss as a result but nothing could be done about it, except to disallow it. There was no question of malfeasance on their part, we were satisfied that they had genuinely paid the production allowance to these farmers who were on the other side of the border in good faith, but we had to take it back from them. Our inspectors seem to be satisfied that the thing is well understood now.

1466. Chairman.—Paragraph 63 of the Report of the Comptroller and Auditor General reads:

“63. In the course of a limited test examination by my officers of payments of milk allowances an overpayment of £1,300 was discovered. I accordingly questioned the adequacy of departmental procedure for the processing of these claims and I was informed that the procedure was considered to be generally satisfactory but that a comprehensive Organisation and Methods examination is being undertaken. I shall keep this question under review.”

Have you anything to add, Mr. Suttle?

Mr. Suttle.—The Organisation and Methods examination has been completed and its recommendations relating to the processing of claims have been, I understand, implemented.

1467. Deputy FitzGerald.—Are you satisfied with the position?

Mr. Suttle.—I cannot say that until I have completed my 1969 audit. We shall look into that matter when we are dealing with the current year’s audit.

Mr. Nagle.—The error in transcription consisted of taking the figure of £349,418 and transposing it as £394,418. The O & M section of our Department recommended that a new kind of master form should be produced and they provided a model for this which would obviate the need for any transcription of any kind and that practice has already been adopted. The first payments to creameries which are made monthly are understood by all concerned to be on a provisional basis. There is then a detailed examination of their returns and if there is any reason for an inspection it is carried out. It is only after these various stages that the creamery account is finally cleared.

1468. Deputy FitzGerald.—On subhead C.2 —Veterinary Research—from the Report I note that last year’s discussion was all about ensuring that there would be no duplication of veterinary research. I am against duplicationin any field if it is unnecessary, but in the case of research I think it is undesirable as a matter of principle to have monopoly research concentrated in a Government Department because constant policy considerations must arise and the shape of research and the publication of results of research must be influenced by this at times. While this is understandable, it is quite contrary to the whole concept of research for research to be confined in that way. In this particular area the pressures must be very great in this regard. This may be said to be a policy matter but as the whole of last year’s discussion was on this question I think it is quite fair to make reference to it here. I say this, with respect to the Department, that research confined to a Government Department must be influenced by policy.

1469. Chairman.—Is there an independent publication of research from the Department?

—There are certain aspects one must bear in mind. The general principle is that unnecessary duplication of research is to be avoided if possible. I hope I have never said that I favour a monopoly in any field by any body, whether it be a Department, a university, a semi-State organisation or any other. Monopolistic tendencies are to be deplored. If my memory serves me right I said last year that, subject to the avoidance of unnecessary duplication, the universities, for example, have a right to engage in veterinary research. It is well-known that a professor who wishes to keep up with the best modern standards must also have contact with and engage in research. However, it does not follow that everything being done at Abbotstown should also be done at the university.

Deputy FitzGerald.—I was concerned about the strong statements with regard to the Institute in so far as veterinary research was deliberately omitted from the Act. It was significant that they were not supposed to engage in research except where it might arise in relation to other agricultural research. I am concerned that, in view of the status of the Institute, this inhibition should be imposed to such an extent in some areas of research. I would only hope that in our efforts to do our best on this Committee and in trying to avoid unnecessary duplication, we would not be creating a policy which might be a bad policy.

Deputy E. Collins.—At the moment there is no policy for research within the Agricultural Institute. Neither is there any co-operation between the Institute and the veterinary profession.

1470. Deputy FitzGerald.—There could not be much scope for co-operation since they are not allowed engage in veterinary research except as a by-product.

—The Agricultural Institute employs a number of veterinary surgeons. I know that there is very good co-operation between the Veterinary Laboratory and the Institute in certain fields especially in areas of subject matter that are partly veterinary and partly agricultural. They are quite free to co-operate directly.

Deputy FitzGerald.—That is in areas that are in common when there is a veterinary element in agricultural research.

Chairman.—This question was mentioned last year and the reply of the Minister for Finance to the Report of the Committee was that the views of the Committee have been drawn to the attention of the Department of Agriculture and Fisheries who were ensuring the necessary co-operation between the bodies concerned to avoid duplication or overlapping in this field.

Deputy FitzGerald.—That is what worries me. We have overdone it in this particular instance and it seems odd that if we make a comment in that direction it is our proper function but that we cannot comment on it as a matter of policy. On the question of unnecessary duplication, supposing it were the case that the publication of results of research carried out in a Department in regard to a particular disease were inhibited for policy reasons, it would be very important that in such a case research would be duplicated because of the inhibitions of the Department. This is no reflection on the Department or, indeed, on any Government Department that is subject to policy consideration?

Chairman.—The same applies to commercial companies. Very often research is scrutinised to ensure that it does not reflect on the company. That is why I asked the accounting officer for freedom of publication.

1471. Deputy FitzGerald.—I would also accept that in the decisions they must take in these matters, the Department are concerned with the national interest. They might take the legitimate view that in certain instances it would be better, perhaps, not to pursue a particular line or to publish the results of research. However, another viewpoint could be held that in the absence of any alternative focus of research on the part of the Institute and while the Department might be in good faith in their decision, it is arguable that the impact on the country might not be good and in other areas research is not controlled in this way by the Government?

—There is a useful check in relation to the two faculties of veterinary science in our two universities and they are entirely at liberty to differ strongly from our research findings. They do not hesitate to indulge in useful expert criticism when they are so justified and this is as it should be.

1472. It is not a question of criticism of the findings of the Department because these findings might not be published for criticism. I am thinking of an area of research that might not be developing at all and the Department might consider it undesirable to publish those results so that criticism in other veterinary faculties would be difficult in such circumstances?

—Such a situation is most unlikely to arise.

1473. Such allegations have been made but I am not in a position to judge whether they are true. At the same time, once an allegation is made the hypothetical possibility exists and that is why I mentioned such a possibility?

—We have a number of advisory committees to advise on various conditions, diseases and problems. These committees are broadly representative and we welcome their expert advice. The committees are drawn from An Foras Talúntais, from the universities, from the veterinary profession and sometimes from university people outside the faculties of veterinary science who might be involved in, say, medical faculties. Everybody concerned is kept in close touch in regard to those diseases which affect humans as well as animals. I cannot imagine anybody engaged in the field of veterinary research or anybody within the Department, from the Minister down, who would wish to go slower than is being done. On the contrary, the complaints always are that there is not sufficient staff.

1474. Deputy Dr. Gibbons.—On subhead C5—Food Aid Contribution under the International Wheat Agreement—perhaps the accounting officer could tell me what this entails?

—When the International Wheat Agreement was re-negotiated a couple of years ago a protocol was produced at the same time which provides for donations of wheat by the signatory countries as food aid. This was not obligatory. One could sign the International Wheat Agreement which bound one to observe certain rules about purchase and sale prices for wheat internationally without having to undertake to supply wheat for nothing to the developing countries but, in fact, we did offer this amount which is quite modest. Of course, that would be in addition to the considerable amount provided under the previous subhead to the World Food Programme. We were not asked to provide this wheat in the meantime. Possibly some people thought we should have offered more and we have not been called upon to discharge this undertaking.

1475. Chairman.—Is this wheat offered free?

—Yes. We were to provide the wheat free on board. It was a separate idea which was expressed in a separate protocol to the International Wheat Agreement. Many countries did provide such offers, especially the countries which produce large exportable surpluses.

1476. Deputy E. Collins.—On subhead CC.5

—Emergency Assistance to Middle East— which countries are involved?

—Jordan, Syria and the United Arab Republic.

1477. Why these particular countries?

—This is where we were asked to send skim milk powder by the UN and the FAO authorities. It was for displaced persons arising out of the hostilities in June, 1967. I gather there were a considerable number of refugees across the borders there.

Deputy Collins.—I trust you were not taking sides.

1478. Deputy FitzGerald.—On subhead C.8 —Contribution to Irish Meat Association (Grant-in-Aid)—it says in the Explanatory Note that the meat research institute was not set up during the year. Why was this?

—This is a very old story. Many years ago the meat trade asked us to increase the normal levy which meat exporters pay as a part contribution to the cost of the inspection service and that they intended to reserve this extra contribution for the purpose of meat research in the future. That was done. A Resolution was passed by both Houses of the Oireachtas increasing the levy and an account was kept of the total proceeds which are now in the neighbourhood of £100,000. In the meantime, however, there seemed to have been certain changes of points of view about the research. The meat trade at one stage had discussions with an Foras Talúntais and ourselves about some joint set-up. That seemed to mark time for a considerable period. At another stage the meat trade were rather inclined, on reconsideration, to pull out of doing any research themselves. Lately the whole thing has been revised and there have been discussions which I understand are promising between the meat trade, An Foras Talúntais and our own Department in the hope of getting some agreed scheme which would enable these funds to be released. The funds will be released if there is any agreement on what is to be done. That is a summary of a rather complicated and very long story.

1479. Deputy E. Collins.—Was there a High Court action?

—Yes, when the meat trade were inclined to pull out of the whole business they did bring an action in the High Court claiming back all the money that had been paid. That action, I think, is directed against the Minister or against the Government and it is being defended. I suppose it is sub judice. We were hoping that these talks would bear some fruit and that a solution might be arrived at.

1480. Deputy FitzGerald.—But there is no sign of that yet?

—The last I heard was a couple of months ago. I was given to understand that there were talks pending as to the future of the research set-up and that they were rather promising.

1481. Deputy E. Collins.—What has been done with the £100,000 collected to date?

—At the beginning we put the proceeds of this extra levy into a separate fund but the Comptroller and Auditor General, quite properly, said that it was somewhat irregular to do that and that they should be paid into the Exchequer provided an account was kept of the proceeds of the extra levy. We know exactly what the extra levy has produced and that will be unlocked as soon as there is any kind of agreement.

1482. What interest is being earned on this £100,000?

Mr. Suttle.—The question I raised was that of the legal position. This money is collected as levy under the Fresh Meat Acts and the law lays down that money collected as levy under the Fresh Meat Acts must come in as Appropriations-in-Aid to the Department. That has been the position since. The money is not kept as a separate fund and it is not identified as such but, as the accounting officer has said, he has a note of the total amount paid to date.

1483. Deputy E. Collins.—There is no danger of the Minister saying that he will only give £50,000 back to meat research as a result of this?

Mr. Nagle.—No.

Mr. Suttle.—Unlikely.

1484. Deputy E. Collins.—Would it not be better to invest the money at nine per cent?

Mr. Suttle.—The law lays down that it must be brought in as Appropriations-in-Aid to the Department. It was at the request of the meat trade that the levy was increased. Once it is a levy it is a legal levy under the Fresh Meat Acts and must come in as a receipt to the Department.

1485. Deputy FitzGerald.—Did they understand that at the time it was proposed?

Mr. Suttle.—Possibly not.

1486. It was not explained to them?

Mr. Suttle.—They knew what was happening the levy themselves and they just asked to have this legal levy increased.

Mr. Nagle.—This was a request coming specifically from the meat industry on the grounds that they would prefer it to be done compulsorily rather than to collect a voluntary contribution from their members. We certainly did not invite any such proposal and I am not saying we warmly welcomed it. We did not like the idea of compulsorily levying a voluntary contribution but they pressed us to do that. We had to go through very complicated machinery and not only lay it before both Houses but get the approval of both Houses which under the Act was necessary. I would be very surprised if the meat trade were not fully aware of the implications.

1487. Deputy E. Collins.—I think they were disappointed that they did not get agreement and a quicker setting up of the research unit more than anything else.

—I think that is true.

1488. Deputy FitzGerald.—How are they disappointed it was not set up if they are responsible for its not being set up?

Deputy E. Collins.—They are not responsible.

Deputy FitzGerald.—Who is responsible then? I understood from the explanation that it was they who were holding it up; if not, who is holding it up?

Mr. Suttle.—It is a question of reaching agreement.

1489. It takes two to reach agreement but only one can disagree. Who is disagreeing with the proposal?

Mr. Nagle.—There are a couple of angles on this. First of all, the meat trade were thinking of doing the job themselves on the ground, presumably, that they would know the practical problems requiring research and investigation, but after some time—I am speaking now from memory—there were discussions with various interests including an Foras Talúntais, and some kind of joint agreement was on the mat. We encouraged that. However, for some reason or other an agreement did not actually materialise. Possibly at that stage, the people in the meat trade became disillusioned about the matter and decided to let somebody else do the research and they would ask to get their money back. Perhaps that is what prompted them to file the High Court action. On the other hand, we made it clear that we considered such research to be necessary and we told them that if a sensible arrangement could be made between them and an Foras Talúntais we would be willing to help in any way possible.

1490. Does that mean that if you made it a precondition that the research be done jointly with an Foras Talúntais, the money would not be released unless the condition were honoured?

—No, not really. If the people in the meat trade had gone ahead at the time and put up their own institute, the money would have been handed over but they changed their minds. I understand they did not wish to undertake it themselves but that they considered it all right for somebody else to do it.

1491. But why this frustration, on their part as referred to by Deputy Collins, if nobody prevented them from doing it and since they chose to go and talk to the Agricultural Institute about it?

—It may be just a change of view. This goes back for quite a number of years.

Deputy E. Collins.—With all respects to everyone may I say that there are some petty jealousies among research bodies.

Deputy FitzGerald.—I could believe that.

Deputy Collins.—It seems to me that the people in the meat trade were very anxious to have such a research unit set up but they did not seem to get full support.

Deputy FitzGerald.—From whom?

Deputy E. Collins.—From an Foras Talúntais, I presume.

Deputy FitzGerald.—But they could go ahead on their own and if they did so they would get the money themselves.

1492. Deputy E. Collins.—Could they go ahead now?

—This would be a new development. It would be a reversion to the original idea. Speaking personally, my own opinion is that it would be better if they could come to an accommodation such as I have mentioned. Of course, if they really meant business and insisted on doing the research themselves, there would be complaints from the research bodies but, historically, we would be under an obligation to the trade.

1493. Was there also a development within the Department towards research?

—Not really. At Dunsany there is a certain type of hygiene research.

1494. Deputy FitzGerald.—The Department’s veterinary research must have some implications for the meat trade?

—They are responsible for meat inspection but that is not research. Canned meat is sampled and there is control but not research.

1495. Does not the veterinary research for which the Department are responsible extend to diseases in meat?

—It extends to diseases in animals and what can happen to the meat after the animals have been slaughtered.

1496. Deputy E. Collins.—My own opinion is that the Department would like to see research going under its own aegis too in relation to the meat industry?

—There is a lot to be said for any substantial industry doing its own research but that does not exclude other co-operating bodies from being involved. A great deal of research in relation to meat is carried out by the industry in the United States.

Deputy FitzGerald.—It is very frustrating that nobody seems to know what is holding the matter up. We are told that there is frustration within the meat trade but we are also told that they are free to go ahead on their own. If this is so somebody should communicate it to them.

Chairman.—Could they not take it up with the universities?

Deputy E. Collins.—I know of no other industry who have voluntarily asked for an increase in levy. It is my belief that the people in the meat trade wish to carry out research but that they are not getting the necessary co-operation for the setting up of a research unit.

Deputy FitzGerald.—Perhaps we could have a clearer explanation as to what is the hold up. Each person has given a clear account of the reasons, but taken together, these create a confusing picture.

1497. Chairman.—Would the Committee like to deal with the matter by way of Parliamentary question in the House?

Deputy E. Collins.—We shall not get a Parliamentary answer since the matter is sub judice.

—We would prefer that some agreement would be reached with an Foras Talúntais.

1498. Deputy FitzGerald.—On subhead D1— Agricultural Schools and Farms—what is the position about the establishment of the Kennedy College?

—This is going very slowly. The Board of Works are still finalising plans and estimates and only preliminary work has been done so far.

1499. If provision was made for the project in this financial year it must have been expected that work would go ahead. £27,500 was saved?

—The College will cost £150,000, but the provision in the subhead was only for £29,000. Expenditure was £2,000 but the building has not materialised yet and I think that is the problem.

1500. If it was expected to spend £29,500 in this year it must have meant that work on the building would have commenced, but expenditure of £2,000 sounds rather more like design costs?

—Provision for the College would be in the Vote of the Office of Public Works; what would be included here would be salaries, wages and general expenses.

Running costs?—

—Yes.

1501. So when this Estimate was made it was expected there would be operating and running costs amounting to £29,500?

—Estimates are made so long in advance that I am not surprised we only spent £2,000 as against an estimate of £29,500.

1502. In September, 1968, it was thought that this College would not only be completed but would be incurring running costs, what stage is it at?

—It was not expected that the College would be completed, but it was expected there would be some running costs.

1503. If there were to be running costs part of it would have been completed, would it not?

—Something would be going on.

1504. Some part of the building would be completed?

—All I can say is that the plans and estimates for the buildings are not yet completed. This is not the function of my Department; it is the function of the Office of Public Works—and by saying that I am not criticising them; I am merely stating a fact.

1505. I am trying to establish why something which was expected to be partly in operation before 1969 has not yet been built?

—Another Department is involved here.

Chairman.—The Board of Works will be able to answer those questions.

1506. Deputy Dr. Gibbons.—What is the fall-out of students from the agricultural schools? I know of a sergeant in the guards and a traveller for women’s underwear who both spent a term at agricultural school?

—Undoubtedly, there is a certain fall-out. There is some evidence that the numbers going back to the land have increased somewhat. Quite a number of them find their way into my own Department in the sub-professional grades and I suppose it can be said that they are doing agricultural work there. In the case of schemes such as the Bovine Tuberculosis Eradication Scheme and the Brucellosis Eradication Scheme these trained technicians, sub-professionals, as we call them, carry out an essential function and we could not do without them. Granted, they are not actually engaged in farming. I remember the head of one of our colleges saying that if 10 or 15 per cent were to go back to the land there would be a leavening because these people are well trained and consequently more effective in proportion to their numbers and they become local leaders.

1507. Deputy FitzGerald.—That would suggest that of the total intake of people into agricultural colleges a small proportion who are trained do good elsewhere?

—That is true.

1508. Was there any difficulty in recruiting staff and technicians for the Munster Institute or Ballyhaise?

—We seem to be short of staff in these colleges. There is a turnover of other types of staff.

1509. Is the problem of getting staff due to low salaries or lack of adequately trained people?

—I think it could partly be a question of the grading of salaries.

1510. Could something be done about that?

—I hope so but that raises all kinds of other questions like the relativity of scales. Of course, the Munster Institute is developing in the direction of rural home management. I think possibly the build-up of teaching staff has not been occurring as fast as we had hoped and that may be another explanation. I would not like to say that it is entirely due to inadequate salaries and that kind of thing.

1511. If the situation arose where there was a persistent shortage of people would you be prohibited from regrading the posts or appointing at a higher level?

—I think it is true to say that an extremely convincing case has to be made. This is usually argued over a considerable period of time with those who control the financial side of things and I suppose repercussions have to be taken into account.

1512. Do you not take the supply and demand situation into account?

—We would like to, speaking from a narrow departmental point of view, take cognisance of it, but I suppose the central Department has to take into account the longer term effects. I would welcome more flexibility in such matters as the incremental point of entry. Young people with a good leaving certificate do get picked up quite easily in industry. Although this is a different type of staff I do not see why in order to attract these good school leavers into the executive grade we should not offer them something above the minimum of the scale. I think a lot of adjustments will have to be made because conditions are changing so much in the employment market.

1513. I think this is something we should deal with in our report?

—We are greatly concerned about the original entry grades of these executive officers who at one time were our administrative backbone but all that has changed, clerical officers, typists and shorthand-typists are very scarce and we are short of quite a number.

1514. —Deputy Collins.—On subheads D.4— University College, Dublin; Faculty of Veterinary Medicine—and D.5—Trinity College, Dublin; School of Veterinary Medicine —what are the numbers of staff and students in the Veterinary faculty in UCD and TCD?

—I really shall have to send a note about that. The figures are readily available but it just happens I have not brought them with me. I do not think there are very many students in Trinity.*

Deputy FitzGerald.—There are slightly more students than staff.

1515. Deputy Collins.—How is the grant to each faculty determined?

—The grant is determined on the numbers of teaching staff and all the other expenses incidental thereto. The veterinary college fabric, so to speak, is a separate subject. That is still looked after by the Department. It has to be remembered, in comparing TCD with UCD provisions here, that while the TCD faculty is admittedly very small, any faculty must have a basic number of staff to teach the essential subjects so it would be relatively more expensive than the larger one. If and when the two can be amalgamated we will heave a great sigh of relief. I understand if and when that happens you will have an excellent staff/student ratio all over and the combined effect would be just right.

1516. Deputy FitzGerald.—About six times better than the Arts faculty?

—According to modern ideas it is about correct.

Deputy FitzGerald.—It is also about correct in relation to modern ideas in the world in the Arts faculty also but it does not just happen there without the benefit and the support of your Department. It all arises from the original decision that Protestant and Catholic classes must be looked after by their co-religionists.

1517. Chairman.—On subhead D.7—University College Dublin; Faculty of General Agriculture—and subhead D.9—Additional grants to University Colleges—why are they produced under two different headings?

The D.7 subhead and the D.8 subhead—University College Cork; Faculty of Dairy Science—are statutory grants which are amounts laid down by an Act of Parliament. The grants in D.9 are non-statutory. Those are put into the Estimates every year and duly voted by the Dáil. That is the only reason I can think of.

Mr. Suttle.—You have the same type of provision in the University Colleges Vote. We have got the original statutory grants, and the supplementary grants bring those figures up to date.

1518. Deputy Gibbons.—On subhead D.10— Farm Apprenticeship Scheme—what is the outcome of this scheme? Does it become a dead-end for some people unless they have the family farm to return to? Is there any provision made to give those people farms through the Agricultural Credit Corporation? I do not think the Land Commission will give it to hem?

—While there is quite generous financing of apprentices during their apprenticeship, provided they do well, I am not sure if there is any specific arrangement for placing them at the end. I would be very surprised if from the outset most of them had not a good idea where they would end up. Some of them would be farmers’ sons in which case I presume they would go back to their father’s farm.

1519. Chairman.—The number has increased from 15 in 1964 to 118 at the present time so this presents a problem with regard to placement on farms?

—According to my figures the number who finished and got their award in 1969 was 12. There were 17 in 1968 and seven in 1967. This was the number of men who qualified, that is to say who had completed their apprenticeship period and passed the final examination.

1520. There is a total of 118. Would that be the full total?

—Yes, it would.

1521. Deputy Gibbons.—Would it be possible to find out without much trouble the total number who have completed their course and have no farm to return to? I have felt that those people should have some outlet, with regard to acquiring land, to the Agricultural Credit Corporation or, if necessary, the Land Commission?

—I am sure they would be good targets for both bodies. I can inquire from the board about this and let you have a note.*

1522. Chairman.—I thought the original idea was to bring them all on to agricultural holdings?

—Certainly they would have an opportunity on a good farm of going through the whole gamut of farming and they would have a financial incentive to do so. They could do farming on their own on their parents’ holdings or be able to set up themselves. There may be cases where some of them might get positions as farm foremen. I will certainly inquire about this and if any figures are forthcoming I will send them to the Committee.

1523. On subhead F—Grants to County Committees of Agriculture—is there any administrative difficulty between the advisory service administered directly by the Department and the service provided by the county committees of agriculture? According to the Devlin Report there was an implication there might be lack of liaison in communication?

—My recollection is that the Devlin Report advocated attaching the advisory service, which is really the Chief Agricultural Officers and the various instructors at present employed by the committees of agriculture, but partly financed by the central Department, to a new farm improvement service. This service, as a distinct entity within the general framework of the Department of Agriculture, would integrate the present advisory service with the field schemes operated by the Department, that is to say the land project scheme, the farm building scheme, the beef incentive scheme and all the other schemes which are of much later origin in most cases than the advisory service which goes back to about 1900. Those schemes are all on a big scale. The Devlin group felt that the staff engaged on development schemes, where you get grants and so forth, and the staff engaged on advising farmers how to get the best out of their farms, are essentially pursuing the same objective and that it would be easier from all points of view to rationalise and co-ordinate them, even though we regarded the new organisation as a separate element in the Department. This idea has been ventilated in some other quarters too but no decision has been taken.

1524. Deputy FitzGerald.—The accounting officer said the recommendation was that this should be brought within the Department but in fact what is involved is surely that the Department could be divided between a policy-making Aireacht and executive agencies which would be similar to State sponsored bodies and would have a considerable degree of autonomy so that it is not within the Department as at present constituted?

—Yes, but it would still constitutionally be part of the Department under the Devlin proposals inasmuch as what he calls executive units of Departments are parts of Departments. The proposed executive agencies would be the existing semi-State bodies.

1525. But the new bodies would be assimilated to the status of semi-State bodies and would have autonomy and independence. They would not be within the Department in the present sense?

—They would still be, as I understand it, part of their respective Departments but they would carry responsibility for executive work. Certainly if any such change was made in regard to the advisory services obviously the new set up would have to be a separate entity within the Department with a marked degree of independence in day-to-day operations.

1526. I do not know what “within the Department” means. I think it is a new concept. It would be no more within the Department than Aer Lingus is within the Department of Transport and Power?

—I am speaking juridically or constitutionally.

1527. Chairman.—On subhead H—Small Farm (Incentive Bonus) Scheme—what happened to that?

—This scheme turned out to be a more complicated one to float than we had optimistically thought and it was not possible to get it going until the next financial year. It is now going quite well after a somewhat hesitant start.

1528. Deputy Gibbons.—On subhead 1.5— An Foras Talúntais—Grant-in-Aid for General Purposes—I should like to refer to the annual report of An Foras Talúntais for 1968/69. At page 15 under the heading “Soils” reference is made to the map they published during the year. It says:

The map can also be used for rational soil improvement and management practices including fertiliser uses, drainage methods and growth patterns. In addition the soils throughout the country can be co-related with those in other countries; research results and experience in one area can be applied with confidence to other areas of similar soils.

Further on it states:

Soils with a limited range of potential uses occupy 30 per cent of the country. These soils are mainly unsuited to cultivation, but they are suited to permanent grassland systems or to forestry. Included in this category are many soils on which high levels of grass production can be attained, but utilisation can be a serious problem due to poaching by grazing stock.

In what positive way does the Department of Agriculture make use of the information given by An Foras Talúntais? Is it possible for the advisory services to indicate to the owners of the soils that their lands are not suited to particular uses for which they have traditionally used them and that they should turn to other uses?

—It is entirely a matter for the advisory services and such of our own departmental officers as are connected with the advisory services whether to use these findings or not. There is no departmental direction on this nor should there be. The information is available and there are a great many professionally qualified people involved in the advisory services. I am sure they do use it but there is no compulsion to use it or not to use it.

1529. Deputy FitzGerald.—Does the Department ensure that they always have this information?

—Yes, they are in close contact with An Foras Talúntais.

1530. Would they have the soil map for the area in every case?

—It is a legal obligation of An Foras Talúntais to make its research findings available to the advisory services. They have a monthly bulletin. They constantly hold seminars and refresher courses, many of them at Johnstown Castle.

1531. Deputy Gibbons.—In relation to the 30 per cent of the country in which a high grass level can be attained but where utilisation can be a serious problem due to poaching by grazing stock, one aspect of this is the housing aspect. My experience is that the people who are using this type of land, or the majority of them, are not aware of this situation and if they are aware of it they have some traditional reasons for not using it. Also, in fairness to the advisory services, they find it hard to get this over to the people. Thirty per cent is a very high proportion of the land of the country?

—This question becomes more important as intensity of stocking is increasing in the country. The grants for cattle housing are being rationalised at present. The intention is to bring the rates for beef cattle housing up to a level comparable with that for milch cows. That may provide a helpful incentive to better housing.

1532. Perhaps I am dealing with policy now but is there not a case here for stating positively: “Because your soil is in this 30 per cent classification and because of your poaching problem you need extra financial help with your housing”?

—I would not dare to comment on that. It is a financial matter but I fully appreciate the Deputy’s point here.

I shall argue it some other place.

Perhaps it will be in order if I say that I shall make a careful note of what the Deputy has said.

1533. On subhead K.7—Western Agricultural Consultative Council—the notes say there were no meetings that year. Is this usual or unusual?

—There was no meeting convened in that year. I do not think there was any formal requirement. It was an informal body without any regulations. The Minister did not convene a meeting in that year.

1534. Chairman.—On subhead K.14—Grants for Pasteurisation of Separated Milk, etc.—are those available to private individuals?

—Those are all paid to creameries.

1535. Is there any grant available for the pasteurisation of raw milk to private individuals?

—I do not think so unless anything is available from the Industrial Development Authority. There is certainly none from our Department.

1536. On subhead K.19—Grants to Bacon Factories—could we have a list of payments to individual factories? We got it a couple of years ago?

—I will circulate it to the Committee. We can bring it up to date. The scheme is finished so it will be a complete list.*

1537. How is the export price guarantee scheme in respect of bacon operated?

—That has been going on for quite a number of years. There is a guaranteed export price for bacon and the difference between that and what is known as the London Provision Exchange Quotation, which is published every week, is paid to the exporters.

1538. Deputy Gibbons.—On subhead M.7— Acquisition of Land (Allotments) (Amendment) Act, 1934—what does that deal with?

—This is really a remnant of the old allotments scheme but in certain areas there is a provision for free seed to the allotment holder and that was the principle ingredient of this subhead. Apparently expenditure was less than had been expected. This payment is made by way of recoupment to local authorities and local voluntary allotment associations who provide seed for allotments run by unemployed plot holders. Allotments seem to be becoming a thing of the past.

1539. On Appropriations-in-Aid Nos. 20 and 21—is there any difference in the value of the return per head of cattle slaughtered under the Bovine TB Scheme and under the Brucellosis Scheme?

—During the financial year the average compensation per reactor under the Brucellosis Scheme which applies to heifers and bulls was £62 per head and the average salvage was £33 16s. 0d. making the average loss about £28 10s. 0d. The average compensation per animal under the Bovine TB Scheme was £70 a head and the salvage was a little over £47 per head, so that the loss was about £23 per head. This scheme applies to reactor bullocks, heifers and bulls but, of course, bullocks do not come under the Brucellosis Scheme.

1540. Chairman.—Is there any particular reason for the lower salvage price under the Brucellosis Scheme?

—It is very difficult to say. The total number of reactors covered by the TB figures I mentioned was 10,900 whereas the number of animals covered by the Brucellosis Scheme was 403 and the reason might be that the smaller the sample the less representative is the result.

VOTE 38—FISHERIES.

Mr. J. C. Nagle further examined.

1541. Deputy Gibbons.—On subhead G.— The Salmon Research Trust of Ireland Incorporated (Grant-in-Aid)—how is the salmon disease situation?

Mr. Nagle.—I do not think it has got any worse. I hope it is not too optimistic to say that there seems to be some improvement. We have emerged from the winter and there is usually a period of relative quiescence during the warmer period which is generally followed by a period of recrudescence again during the winter months. The trend appears to be downwards but I would prefer to go through another winter before saying that too positively.

1542. Chairman.—Apart from salmon disease, is there not a worsening of the situation from pollution?

—I suppose there is. This may have existed for a number of years but is only being fully realised now. Admittedly, with increased industrialisation the problem is becoming more acute every day, but there is still time to save the fishing industry from the worse effects of pollution in most parts of the country. In rivers like the Rhine, I understand, nothing can be done now because there is no living fish in the river.

1543. Do the Department of Agriculture and Fisheries play any part in coastal protection or is it entirely a matter for the Department of Defence?

—The Department of Defence are concerned with the protection and the defence of our territorial limits.

Is there any hope that there will be an improvement in the next year or two?

—It is a rather controversial subject. We consider they are doing a good job on this.

Thank you very much, Mr. Nagle.

The witness withdrew.

The Committee adjourned at 1.30 p.m.

*See Appendix 36.

*See Appendix 37.

*See Appendix 38.

*See Appendix 39.

*See Appendix 40.