Committee Reports > List of Committees > Dáil > 1974 > Committee of Public Accounts > Interim and Final Report - Appropriation Accounts 1971 - 1972

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 6 Meitheamh, 1974

Thursday, 6th June, 1974

The Committee met at 11 a.m.

Mr. S. Mac Gearailt (An tArd-Reachtaire Cuntas agus Ciste) called and examined.

VOTE 37—AGRICULTURE.

Mr. M. J. Barry called and examined.

511. Chairman.—Paragraph 68 of the Report of the Comptroller and Auditor General reads as follows:

“Subhead B.1.—University Colleges

In 1967 the Department of Finance sanctioned the provision from this vote of financial assistance, estimated at £505,565, to extend the Dairy Science buildings at University College, Cork. Tenders submitted in 1969 for the work indicated that the cost would exceed £1 million. As a result, a reassessment of the project was undertaken at the request of the Department of Finance, and it was decided in October 1971 to relocate the Dairy Science buildings as part of a proposed overall development plan for the College, the revised cost being estimated at £630,000. Contracts had been placed by the College Authorities in 1968 and 1969 for the demolition of the old experimental creamery building to provide a site and for trial borings, piling and preparation of foundations. I have asked for details of the expenditure on the abandoned site from the inception of the project to date. I have also inquired regarding progress on the construction of the relocated building.”

Mr. Mac Gearailt.—The Accounting Officer has replied to the inquiry and copies of the reply have been made available to the Committee. It indicates that approximately £217,000, including fees, was expended on operations on the abandoned site.

512. Chairman.—Were these changes due to the changing financial situation, or inflation, during the period 1971 onwards or what was the explanation?

—There were two separate considerations here. In the first place, University College, Cork, set out to rebuild their exprimental creamery and dairy science faculty on the old site. This is the way it began. When, at a later stage, the Higher Education Authority and the Building Unit of the Department of Education came into the picture, they took a look at the whole planning of University College, Cork, because there is a great deal of building to be done. It was decided then to re-arrange the siting of the academic and experimental buildings. That accounts for the fact that the original site was abandoned and that they are now planning to build the dairy science faculty in a different part of the campus altogether. The question of inflation also comes into it because, as time went on, the earlier estimates of cost increased steadily.

513. The change of purpose, that was the responsibility of whom?

—It was basically the responsibility of the university authorities themselves. But the Higher Education Authority also came into it because, once the Authority had been established and had a function in relation to the funding of the universities, it then had a say in how a new university—and we are talking here of almost new universities in the sense of new buildings—was to be laid out, the relationship between the different buildings to one another and how all of the available ground was best to be utilised. That brought a new kind of approach to this matter because, in addition to a dairy science building, there was a science building and other buildings to be built and one of the new factors that entered into the situation was the possibility that University College, Cork, could buy grounds from a community of nuns, a place called La Retraite. They have since succeeded in buying out this property and this enables them to plan their building programme as a whole to far greater advantage than they would have been able to do, say, three or four years ago.

Would I be right in summarising the matter this way? In 1967 Finance sanction was given for a scheme, that the cost escalated or was more than thought and, at the request of the Department of Finance, there was a re-assessment. At that stage, the college, the Department of Education and also the Higher Education Authority were involved?

—Yes, that is correct.

514. In fact, in a sense, you were the Accounting Officer without having the exclusive power of decision; is that not so?

—Yes, that is generally true in relation to this.

This plan, then, was decided upon and has gone ahead. There are inflationary factors in it and you are before us as the Accounting Officer?

—Yes.

Is that a fair statement?

—That is quite correct.

You are not responsible for making the decisions incurring this expenditure in the sense that it was the Department of Education, the university, the Higher Education Authority and the Department of Finance —they all came into the decision?

—Yes. I am not responsible in any exclusive sense. But I am responsible to the extent that, when it was decided to have a new look at the whole area of rebuilding that was to be done, all concerned agreed after discusion, that this new approach was the better one. Therefore, the responsibility extends to me to that extent.

515. Chairman.—And that moneys are properly and economically expended. Has the Comptroller and Auditor General any further comment to make?

Mr. Mac Gearailt.—The purpose of our paragraph was to draw attention to the fact that money was expended and as far as we were aware some at least of that expenditure appears to be nugatory. We are not too sure how much of it was nugatory. In so far as there is any element of nugatory expenditure involved—

516. Chairman.—But that abortive or nugatory expenditure was due to a change of plan. Is that not so?

—Yes. It was due to a change of decision.

Obviously, as the Comptroller and Auditor General has pointed out, it is undesirable to commence something and then after expenditure has been incurred to find that you are going to have a re-think but in this case there were peculiar circumstances.

517. Deputy MacSharry.—On paragraph 68, a sum of money was set aside and then tenders submitted indicated that it would cost almost twice that amount. Were there many tenders? Was it the higher tenderer who eventually did the job?

—I am not able to say. The tenders were sought by the college. I cannot say how many firms offered.

Would it be possible to find out?

—Yes we can ask the college.

Chairman.—Could you have a note sent to us?

—Certainly.*

518. Paragraph 69 of the Report of the Comptroller and Auditor General reads:

“Subhead B.3.—Agricultural Schools and Farms

In June 1964 the Government approved in principle a proposal by the Minister for Agriculture to include in the Kennedy Memorial Park, Co. Wexford a Horticultural College which was intended to cater for forty students. The cost of erection of the college and outoffices was then estimated at £120,000 but in December 1970 it was estimated at £320,000, excluding the cost of a water supply which had been installed at that stage.

In 1970 the Department learned that Kildalton Abbey, Piltown, Co. Kilkenny. capable of accommodating one hundred and twenty students and staff, together with a farm of 365 acres, was for sale and it was decided with the sanction of the Minister for Finance to acquire the property for use as an Agricultural and Horticultural College. The purchase was approved by the Government in February 1971 on condition that the proposal to build the college in Co. Wexford would be abandoned and the property was acquired in July 1971 at a negotiated price of £245,000. It was estimated that further expenditure on adaptations, purchase of furniture, equipment, stock and standing crops would amount to about £100,000 and that the provision of certain horticultural educational facilities would cost in the region of £60,000.

The Accounting Officer has informed me that the land for the college in Co. Wexford which had been made available by the Department of Lands has been re-transfered to that Department. The installation of the water supply was carried out by the Office of Public Works as part of a joint scheme to service the college and the park and the cost of that part of the scheme designed to serve the college’s needs was calculated at £26,585. The water supply is now being utilised by the Department of Lands. Actual expenditure incurred from the vote for Agriculture on the abandoned project amounted to £2,380 offset by receipts of £2,006 from the letting of land. I have also been informed that a course in Agriculture commenced in Kildalton in October 1971 and thirty students attended.”

Mr. Mac Gearailt.—This paragraph is for the information of the Committee. I have no further comment to make.

519. Chairman.—Paragraph 70 of the Report of the Comptroller and Auditor General reads:

“Subhead C.2—Bovine Tuberculosis Eradication

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

Receipts, amounting to £2,112,697, from the sale of cattle slaughtered under the scheme were credited to appropriations in aid.

The gross cost of the scheme from its inception in September 1954 to 31 March 1972 was £79,712,895, and receipts from the disposal of cattle for slaughter were £26,478,561. The net cost was, therefore, £53,234,334.”

Mr. Mac Gearailt.—Paragraph 70 gives a breakdown of expenditure for the year on the programme of the bovine tuberculosis eradication scheme.

520. Deputy MacSharry.—How many vets were involved in the scheme?

—In terms of practitioners, about 750.

521. That does not include your own vets in the Department?

—Yes, some.

It does?

—Yes. In terms of staff over this period we recruited a number of vets, what we called the task force, between 40 and 50 of those.

They were your own staff?

—In effect, yes. There was the difference that in this particular job, they were exclusively on testing and they were paid the same kind of fee as the practitioners. We have since offered full-time employment on a salary basis to those people and I think we have between 40 and 50 of them on the job, but this time on a salary basis as permanent staff.

522. Have you any of them still on fee per item basis?

—Six. The job was brought to that level after an experimental period of a couple of years.

523. Chairman.—What is the situation in regard to tuberculosis?

—There is still, particularly in the south, an incidence that we regard as worrying because it is not coming down as fast as we had hoped even three or four years ago.

It is coming down?

—It is, but very gradually.

And it did go up a lot some two years ago—is that the position?

—Yes, from memory it went up in 1969-70.

524. To what would you attribute that?

—I doubt if there is any single reason. There was some degree of slackness in the way the tests were done, some degree of indifference in the farmers’ approach to eradication, but I am not sure that I could point to any single factor and say: “It was because of that.”

525. Had the Department sufficient resources to cope, including personnel?

—No, in one sense, that if we wanted to do this job on an ideal basis we would do it entirely with our own staff but we have never been in a position they were in, for example, in the North of Ireland, in using permanent Department vets to do all the work. Looking back over the years, we think this made a vital difference.

526. Deputy Tunney.—When these cattle went to the factories, you would be happy that you had sufficient personnel to ensure adequate vigilance in removing from sale any meat that had been affected?

—Yes, this has never been a problem in the sense the Deputy means. It is a problem in another sense, that countries to which this meat is exported are becoming more restrictive in regard to the kind of certification they demand for meat of this kind. There is a growing problem as to how in the future meat from those animals will be disposed of.

527. Deputy Governey.—You mentioned the difficulty in having the Department’s own veterinary surgeons. I gather the veterinary surgeons in the Department are on a flat scale?

—Yes, they are on a salary basis.

528. Are the outside veterinary surgeons paid per test?

—Yes.

Is that a more expensive method?

—Yes.

Some people make quite a lot of money out of it.

Deputy MacSharry.—Some 750 of them made a lot of money.

529. Chairman.—Paragraph 71 of the Report of the Comptroller and Auditor General reads:

“In 1969, four years after the country had been declared free of bovine tuberculosis, the continuing high incidence of the disease with the consequent threat to the cattle trade was giving rise to serious concern. A special task force of veterinary surgeons was set up by the Department to carry out check tests on random samples of herds already tested and cleared by veterinary surgeons and to discourage unsatisfactory testing. I have asked for information regarding the extent to which the objectives of the task force have been achieved.”

Mr. Mac Gearailt.—We asked for certain information about the special task force and their functions and the Accounting Officer has furnished the following information:

“In October 1965, the country was declared “attested” as regards bovine tuberculosis, i.e. the disease was regarded as virtually non-existent in cattle population. However, in subsequent years the percentage of reactors to the annual check test increased and had assumed disturbing proportions by 1968. There were a number of reasons adduced for this, the increasing size of the herds in the country, reluctance of farmers to have their herds “locked up” and possible careless testing by some veterinary surgeons. It is the experience in all countries which have engaged in the eradication of bovine T.B. that while spectacular advances can be made in the early stages, the reduction of disease incidence below the level of about 0.5 per cent becomes progressively more difficult.

Under the Diseases of Animals Act, 1966, the Minister can appoint private veterinary surgeons to conduct the testing of cattle on his behalf, and in 1969, 24 private veterinary surgeons were engaged for that work in a temporary capacity. The number was increased to 50 in 1970 and remained at about this level in 1971. These veterinary surgeons were allocated a randomised 5 per cent sample of the herds which would normally be listed to private practitioners. The “task force” veterinary surgeons worked directly for the Department and they were independent of any client pressure to do a “soft test.” On completion of each round of testing the results from the “task force” tests were compared with those of the private practitioners in the same areas. The comparisons supported the contention of careless testing by a number of practitioners, and it was observed that generally the testing had become stricter. Not unexpectedly the percentage of reactors rose somewhat in 1969 but has decreased each year since then.

Consequent on the comparisons established by the “task force” a number of practitioners were interviewed and in 1972 a total of 54 practitioners had 15 per cent of their normal testing withdrawn from them and handed over to the “task force.”

The elimination of the “hard core” of T.B. infection is necessarily a slow process and although reductions have been achieved in the last few years there is still substantial leeway to make up. Nevertheless due to the effect of the “task force” and special testing procedures recently introduced in the southern counties, where the incidence has always been comparatively high, an appreciable reduction is anticipated from 1973 onwards.

The Minister is satisfied that the objectives for which the “task force” was engaged are being attained and with the experience which has been gained he is now arranging for the appointment of up to 50 veterinary surgeons on a permanent salary basis to continue and intensify the activity initiated by the “task force”.”

530. Chairman.—Paragraph 72 of the Report of the Comptroller and Auditor General reads:

“Subhead C.3.—Brucellosis Eradication

The Brucellosis eradication scheme commenced in 1966 in Donegal, Cavan, Leitrim, Monaghan and Sligo. Donegal was declared brucellosis-free in June 1968 and the other four counties in March 1970. Rounds of check-testing are at present in progress in these five counties. Eradication measures were extended in 1970-71 to Mayo, Louth, Westmeath, Roscommon, Longford, Meath and to portion of County Offaly. In addition a series of milk ring tests is in operation in counties to which the eradication scheme has not yet been introduced.

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

Receipts, amounting to £1,246,725, from the sale of cattle slaughtered under the scheme were credited to appropriations in aid.

The gross cost of the scheme from its introduction to 31 March 1972 was £5,887,048 and receipts from the disposal of cattle for slaughter were £2,073,281. The net cost was, therefore, £3,813,767.”

Mr. Mac Gearailt.—This paragraph analyses the expenditure on the brucellosis eradication scheme and outlines the progress to 31 March, 1972.

531. Chairman.—What is the position with regard to the brucellosis eradication scheme? Is the disease coming under control?

—This is going to be a pretty slow process. There are a number of counties in the north and the west that are already cleared and there are seven counties in the midlands being cleared. However, in the south—this means most counties south of a line from Dublin to Limerick, where the incidence is higher—it will take years to finish the job.

532. There is some anxiety about the infection in humans which appears to be on the increase. I think it is usually attributable to drinking milk. Am I correct in that?

—This is correct. If people drink unpasteurised milk that comes from animals actively infective, there is a possibility of getting undulant fever.

533. There seems to have been an increase in the incidence among humans in recent years. You may not be officially aware of this?

—We have come across cases of veterinary surgeons who get the disease.

Deputy MacSharry.—Quite a few of them get the disease. They may not get it by drinking the milk but they are handling the cattle.

Chairman.—On the information available to me, it appears the disease has spread further than veterinary practitioners.

534. Deputy H. Gibbons.—It has been suggested to me that farmers can make a clinical diagnosis of brucellosis and then dispose of the animals and that this interferes with the operation of the scheme. Have you any evidence that this is happening?

—This can happen, but is most likely to occur in areas where there are no compulsory clearance measures, that is principally in the south. There are two tests— in fact, there are three but in this country we carry out only two tests—one is a blood test and the other a milk test. It is possible that a farmer can get a test done privately, identify the cows that are infected and then sell them.

535. The information available to me is that in a clearance area where an animal has a clear test but subsequently develops brucellosis which becomes obvious to the farmer, he can dispose of the animal on the strength of the clear certificate without submitting the animal to further testing.

—I am not sure whether there can be much to this. There is not much real advantage to the farmer because we are paying reasonable prices for reactor cows in clearance areas. If a farmer has a cow that aborts between tests he might take a chance and sell the cow on the market.

536. Do you not consider that this could be a serious source of re-infection if such an animal is taken into a clear herd?

—Yes, on every occasion we take the opportunity to advise farmers, especially those in the cleared and clearance areas, to be extremely careful of the stock they buy. This disease spreads very rapidly when it comes to a cleared herd.

537. Do you consider this is a serious problem?

—We have not heard a great deal about this in the clearance areas but we are afraid it is possible in the south. We have introduced a voluntary scheme in the south. We encourage farmers to have the cows tested and if they agree to have the reactors identified and sent to a meat factory we pay them a headage grant of £40. This is to encourage them to get rid of these animals.

It was alleged to me that in a clearance area this is a common source of infection and I thought I should bring the matter to your attention.

—I am very glad of it because if there is something in the matter we should examine it.

538. Deputy MacSharry.—How does a person selling that kind of beast get a clearance certificate.

Deputy H. Gibbons.—Because he already had such a certificate.

Chairman.—Is that a question of the ageing of the certificate

—No. I think Deputy Gibbons’ point is that when a test is done and every animal is clear and the farmer has a document to that effect, if later on an animal aborts he may decide to put the animal on the market with the clear certificate.

539. Deputy H. Gibbons.—It was also suggested that foxes and similar animals spread the disease. Is that so?

—This can be true.

540. Deputy MacSharry.—You mentioned two kinds of tests—the blood and milk tests. What proportion of milk tests do we carry out? Is it not mainly the blood test?

—In the clearance and clear areas we use only blood testing. However, in the south, in the mainly dairying areas, the milk test is used.

Is it on a voluntary basis?

—Yes.

541. Is there any way in which this could be done with the full co-operation of the creameries so that it might be done on a wider scale?

—We began a series of discussions with some of the bigger processors this year to co-operate, in the way the Deputy has suggested. Generally, they are quite ready to help. We think they can be of great assistance in getting this thing moving more rapidly because in the normal way, especially in the dairying counties, they are taking samples of milk everyday.

Deputy MacSharry.—That is what I meant.

—If we get a sample from a herd which shows evidence of the disease, then we can readily go in and test each animal in the herd to find out which individual cows are affected. This is a promising line. We are working out details with the co-ops to get them in on it.

542. Is the milk test as effective as the blood test?

—Veterinary people may have some reservations about this but, on the whole, I think they would say it is quite a useful test. Neither is absolutely perfect but the weakness of the milk test is that, taking the country as a whole, there are some 70,000 farmers who are not going to creameries or selling milk. Many of these have beef herds and to get milk samples from that kind of herd is a problem. It is different in a dairying herd where cows are being milked twice a day all summer and where it is a very easy job to obtain milk samples.

543. So far as effective control is concerned, quite a substantial number of calves come from the very badly affected areas in the south to the clear areas of the west every spring. I cannot understand why any farmer would take that chance. I do not see how these calves could get the necessary certificates to allow farmers in the west to buy them. But quite a trade is done in this regard. Is there any way in which it can be either voluntarily stamped out or controlled?

—There are tens of thousands of calves moving out from the south, through the midlands into the west. This is the traditional trade. But, so far as I know, the vets until, perhaps, recently have not been terribly concerned about the danger those calves presented. I think they are now coming to the conclusion that the heifer calves, at least, do present problems; bull calves are different. It may be that in the future this possible source of infection will have to be examined to see what can be done to deal with it.

544. Those calves are not subjected to a special test beforehand?

—No.

545. Although vets in the past did not recognise it—but are beginning to now—it seems that this could cause a serious upset in the areas in which you have worked hard to clear and are clear at the moment, in the north and north west?

—It is possible that this trade in heifer calves will present a problem in the future.

546. Deputy Tunney.—Having regard to the amount of money spent on this scheme and on the prevention in regard to the physical side of it, and the mobility of cattle, has there been a corresponding investment in what might be regarded as the scientific prevention of the disease?

—Brucellosis?

Yes.

—I do not think there is such a thing as scientific prevention. There are two vaccines which have been in use for a number of years but nobody would claim that they offer a 100 per cent safeguard. One is what is regarded as a live vaccine that was made in England; a vaccine called Strain 19. This is no longer used here. The other is what is known as a killed vaccine made in Holland; its technical or trade name is 45/20. This vaccine applied to breeding females is a help but a help only. It is used extensively here. In the south where compulsory eradication is not in operation we pay the cost of the application of this vaccine under certain conditions to encourage farmers to use it.

547. Chairman.—Is the incidence of the disease increasing in the south?

—In some counties, yes.

548. Deputy H. Gibbons.—Would it be possible to combine Deputy MacSharry’s and Deputy Tunney’s suggestions, that is, not allow any calves up from the south that have not come from the Strain 19-tested herd?

—I think the Deputy means the other one—the 45/20. The reason why Strain 19 is not used here any more, is that it is a live vaccine and cattle which have been subjected to this vaccine are liable afterwards to react to a test. Therefore, we could find ourselves buying thousands of cattle we thought were diseased but which were reacting to the vaccine only. Some years ago for this reason we stopped the use of that vaccine. The dead vaccine does not have the same effect. I am not able to say whether young calves should be vaccinated—I think there are some age limits, five to 12 months. I do not know whether the young calves to which Deputy MacSharry refers—which may be less than a month or, sometimes, a week old—should be vaccinated or, indeed, whether they would react to this vaccine.

If the mothers had been vaccinated and if a certificate were issued to this effect?

—Yes, that is a possibility.

549. Chairman.—Paragraph 73 of the Report of the Comptroller and Auditor General reads as follows:—

“Subhead D.2.—Land Project

The payments made in the year under this subhead are as follows:—

An occupier of land who completes an approved scheme of reclamation work on his holding to the satisfaction of the Department is entitled to a grant amounting to two-thirds (in Gaeltacht and certain pilot areas, three-quarters) of the estimated cost subject to a maximum of £50 per statute acre in western and northwestern counties and £45 per acre elsewhere. Grants to farmers amounted to £3,219,259 in the year as compared with £2,699,502 in the previous year. The scheme was introduced in 1949 and it was originally estimated that 4.5 million acres required reclamation. From statistics available 2,115,000 acres had been reclaimed by 31 March, 1972.”

Mr. Mac Gearailt.—This paragraph gives the usual breakdown of the expenditure under the Land Project Scheme.

550. Deputy H. Gibbons.—How does this project scheme stand now in view of the difficulties of the EEC and the fact that farm modernisation is slowly going ahead?

—From the 1st February this year the land project and a number of other schemes were incorporated into a single service. The intention was that an applicant under the Brussels 159 Scheme would get the services needed, whether land project, farm building, water supply or anything else once their farm programme had been worked out with the advisory service. As you know, this 159 Scheme is not going ahead. But there was a backlog at that time of nearly a year’s work on the land project—that is, applications not yet dealt with—and that work is going ahead in the normal way.

551. Deputy MacSharry.—A backlog of work?

—A backlog of the land project because, at any given time on that scheme there would be a time lag of, perhaps, up to nine months between the date of the first application, the date on which all necessary inspections have been completed and the maps or plans drawn up. Therefore, the land project work is going ahead normally in that sense.

552. Deputy H. Gibbons.—What about the new applicant? If somebody feels that as a matter of urgency he must get some work done and is not able to do so fast enough through the farm modernisation application, where does he stand?

—We have invited all farmers who want to get urgent work done to complete an application form, send it direct to us and we can cope with it.

Fair enough.

553. Deputy MacSharry.—You said—perhaps you did not mean to say it—that the 159 scheme is not operating?

—Yes, but I said it was not operating normally because we are having some troubles with the advisory services.

But you are operating?

—We are able to manage with applicants who send in applications direct to the Department.

554. What scheme is that?

—The land project. The land project do their part and the building section do their part but the difference between the new approach and the old approach is that under the old system these schemes ran separately. A man who wanted ten acres drained applied to have ten acres drained. Under the new scheme the same man would be asked to talk to his adviser about a programme of development for his whole farm. The ten acres would probably be included but there might be other things like additional cows or other services he might need.

A whole plan?

—Yes. This brought the advisory services into it but the advisory services, as I have said, are having some problems about promotions, salaries and so on and for the moment they are not working with farmers to complete these programmes.

555. Deputy Governey.—Will the fact that the advisory services are not operating and that the Department have to handle these applications directly mean that you will run into the problem of needing additional staff in the Department?

—If our problems with the advisory services were not to be solved within a fairly short period, we would.

556. Deputy MacSharry.—What sort of staff? Would they be advisory personnel?

—They would have to be graduates. A section of our inspectors have already done a fair amount of work on this business of farm management and farm programmes. We have some staff who have been specialising in this for a few years and for the time being they are able to cope but in addition there are now throughout the country quite a number of farm consultants. These are people who are graduates and who may have been at one time on our staff or on the advisory service staff and have set up as independent consultants. Some farmers are going to them and getting programmes worked out with them which serves the purpose quite well.

557. Who pays them?

—The farmers. Whatever arrangement is made is between the farmer and the consultant. We do not come into it.

The farmer would not have to pay the adviser?

—That is right; he would not.

So it is an extra cost on the farmer?

—Yes, if he uses a consultant. At any time it is an extra cost because it is a private arrangement.

558. Chairman.—Paragraph 74 of the Report of the Comptroller and Auditor General reads:

“Subhead D.4.—Beef Cattle Incentive Scheme

This scheme was introduced in February, 1969 to encourage an expansion in the output of good quality beef cattle and provides for the payment of grants for each qualifying cow-calf unit to owners of approved breeding herds who are not engaged in commercial milk production. The rates of grant payable in the year under review were £21 for the first qualifying unit, £19 for the second and £16 for each subsequent unit. The expenditure from the subhead comprises £6,636,969 grants and £2,322 miscellaneous expenses.”

Mr. Mac Gearailt.—This paragraph is for the information of the committee. The cost of this scheme from its introduction up to March, 1972, amounted to £13.4 million.

559. Deputy MacSharry.—Has there been much of a drop in this scheme?

—No. We are talking here about 1971-72. I think at that time we would have had maybe 56,000 applicants and I think that for the year ended last March we would have had somewhere about 68,000 applicants. This has been a fairly steady pattern. It has remained over the past three years somewhere between 60,000 and 70,000.

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

“Subhead D.7.—Small Farm (Incentive Bonus) Scheme

This scheme, which was introduced in May, 1968, aims at encouraging farmers with small holdings to improve the level of farm income by planned development. It provides annual incentive bonuses over a period of four years to farmers who achieve approved stages of development leading to a specified final target of production. The scheme is operated by the County Committees of Agriculture on behalf of the Department. Grants to farmers under the scheme amounted to £420,825 in the year compared with £274,900 in the previous year.”

Mr. Mac Gearailt.—This paragraph is for information.

Deputy H. Gibbons.—Is the number of applicants for this scheme increasing?

—We now have to anticipate a little. This scheme now becomes absorbed in the modernisation scheme but everybody who was an applicant or was working on the scheme remains in it if he chooses. We will continue to give the services if we have been giving them and meet our commitments to participants until they have finished what they set out to do.

561. I take it that one who is an applicant under this scheme would not automatically become a member of the modernisation scheme?

—He could apply. If he saw advantages in going into the modernisation scheme we could take him on, but if he chose to finish what he has undertaken to do under this scheme, that would be his choice.

Could he apply for the farm modernisation scheme then?

—When he has finished this, yes.

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

“Subhead E.1.—Dairy Produce (including Grants-in-Aid)

The Expenditure is made up as follows:—

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

I referred in previous reports to the introduction on 1 September, 1969 of a scheme for the payment of creamery milk price allowance on a tier or differential basis. The scheme was revised from 1 September, 1970 and further revised from 1 May, 1971 to enable increases to be made in certain allowance rates. The special allowance for high quality milk was also increased on 1 May, 1971 from 0.83p to 1p per gallon.

The structure of the creamery milk pricing system was remodelled from 1 December, 1971 on a basis more appropriate to an EEC context and milk price and quality allowances ceased to operate from that date. The new arrangement will continue to operate up to 1 February, 1973 when it will be superceded by the appropriate milk price support arrangements under the Common Agricultural Policy of the EEC.

The new arrangement also provides for payment by the Department of a subsidy of 2.5p per gallon on skim milk returned to suppliers and the necessary funds were made available by supplementary estimate.”

Mr. Mac Gearailt.—The analysis of expenditure from the subhead is for information. The basis on which the expenditure was made has been superseded by appropriate support arrangements for the dairy industry under the common agricultural policy of the EEC.

563. Chairman.—Paragraph 77 of the Report of the Comptroller and Auditor General reads:

“During the course of a strike of assistant and branch managers at Dairy Disposal Company creameries in July and August, 1971, milk accepted at ninety-three creamery premises could not be weighed or sampled for testing and for determination of butter fat content. With the approval of the Department of Finance the payment of milk price and special quality allowances in respect of milk delivered to these creameries during the strike was based on estimated deliveries. The company calculated, on the basis of butter production and sales of liquid milk and cream in the period, that the quantity of milk actually delivered fell short of the estimated deliveries by about 900,000 gallons. I have asked for information as to the amounts charged to the subhead for milk price and quality allowances on the shortfall.”

Mr. Mac Gearailt.—The Accounting Officer has furnished the information sought by me and copies of it have been made available to the committee. It would appear that the quality allowance paid in respect of the milk shortfall mentioned in the paragraph could be in the order of £4,000 and the milk price allowance paid could be between £14,000 and £27,000.

Chairman.—The Accounting Officer has given the background. Is there anything he wishes to add?

—Yes. What happened in this case was that for a period the Dairy Disposals Company was in dispute with some of its staff who withdrew their labour and then in order to continue taking the milk from the producers and not to deprive them of allowances to which they were entitled, a somewhat makeshift arrangement was devised under which the quantities and the allowances would be calculated on the basis of what the producers had supplied in the comparable period in the preceding year. Later, when everything was settled up it was clear that less milk had actually come in than had been paid for but there was no way of checking with any accuracy just how many gallons had come in because the man on the creamery platform was not able to decide with accuracy, nor was there any way of checking with any accuracy what part of that milk was entitled to the quality bonus. It was a makeshift effort to meet a very exceptional situation.

564. Was that a ministerial decision? Obviously, it was on the borderline of policy—who made the decision?

—I am not able to say whether the Minister at the time personally decided but it is clear enough that the Dairy Disposals Company would have come to the Department of Agriculture and Fisheries and we would have had to say that since our business primarily was with the producers we would have to devise some method by which they could continue to deliver their milk.

565. Can I put it this way: are we to look at this as an administrative decision or a policy decision—to continue with the supply?

—A policy decision, I would say.

566. Paragraph 78 of the Report of the Comptroller and Auditor General reads:

“Subhead E.2.—Beef, Mutton and Lamb Exports

The cost of supporting export prices of beef, mutton and lamb amounted to £1,515,848 in the year under review and comprised £1,363,868 in respect of exports to the United Kingdom and £151,980 in respect of exports to other countries. Under the terms of the Anglo-Irish Free Trade 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 £610,000 were received from the United Kingdom Government during the year, being £160,000 as a further payment on account for 1970-71 and £450,000 on account for 1971-72.”

Mr. Mac Gearailt.—This paragraph is for information.

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

“Subhead E.4.—Cereals

On the direction of the Minister for Agriculture and Fisheries, An Bord Gráin purchased in 1970, for disposal as poultry feed, 30,000 tons of the excess stocks of wheat held by flour millers. The price paid by An Bord for the stocks taken over was £28 per ton average and as the millers had paid millable wheat prices for these stocks the Minister decided to make good, from voted moneys, the difference amounting to £572,000. This amount, together with interest on the outstanding balance, is payable over the years 1971-72 and 1972-73 and the first payment, £237,171, has been charged to the subhead.”

Mr. Mac Gearailt.—This matter has been finalised in 1972-73 by the payment of £421,175 from the Vote. This brought the total sum paid to £658,346 and the difference between that figure and the £572,000 mentioned in the paragraph, £86,346, represented the interest paid.

568. Chairman.—Would the Accounting Officer like to comment as to how the excess stocks are there?

—It takes us back to the period when flour millers had a statutory obligation to buy at the declared price all wheat of millable quality that was offered to them. There was a decline annually in consumption and sometimes they were obliged to take in more wheat than was required for bread-making. This had to be put on the animal feed market at a much lower price.

569. Is it the case that it does not keep?

—It would keep under suitable storage conditions but it is expensive to do this. Further, if it were kept until the next harvest there would be problems about taking in grain from that harvest. Therefore, it must be disposed of. A situation was arising where the millers were carrying stocks they did not need for flour-making and the question was how the stocks could be got rid of. An agreement was reached whereby the grain could be put on the feed market and paid for over a period of two or three years and this is why this transaction comes up here.

570. Paragraph 80 of the Report of the Comptroller and Auditor General reads:

“Subhead I.1.—Córas Beostoic agus Feola

Reference was made in previous reports to Córas Beostoic agus Feola whose primary object is to undertake promotional work for the development of exports of livestock, carcase meat and meat products. A sum of £300,000 was contributed in the year from this subhead towards the expenses of the company. Its accounts are audited by me but I have not yet received the accounts for the year.”

Mr. Mac Gearailt.—There was delay in regularising some items brought to notice on the audit of the accounts of this company for 1971-72. We recently sought the assistance of the Accounting Officer in order to have matters expedited but to date I have not received the signed accounts for the year 1971-72.

571. Chairman.—The Comptroller and Auditor General is entitled to these accounts?

—Yes.

Why are they not available?

—I think there are a couple of reasons. First, we are not always aware in the Department when the semi-State bodies are submitting their accounts or what progress they have made with them. We were approached by the Comptroller and Auditor General at the beginning of this year and he said he had a problem with these accounts. We spoke to the people concerned in CBF and we found there were a number of issues for which sanction from the Department of Finance was necessary to clear the accounts for 1971-72. We took the matter up with the Department of Finance, we got the sanctions and then passed them on to Córas Beostoic agus Feola. I understand they have completed and passed their accounts at a recent meeting but I do not think they have signed them or sent them to the Comptroller and Auditor General.

572. Do they keep annual accounts?

—These are annual accounts.

573. How many years in arrears are the accounts?

—These are for 1971-72.

574. The Comptroller and Auditor General has not got the accounts in 1974. Is that not an extraordinary situation?

—I agree it is an unfortunate situation but now that the points have been cleared with the Department of Finance I expect that the accounts and those for the next two years can be presented and cleared very quickly.

575. Surely accounts are prepared at a particular date? An accounting period ends at a particular date, there is a state of affairs on that date and the accounts should be finalised in respect of the actual state of affairs on that date. Would you not agree with this?

—Yes.

576. What excuse can there be for not finalising the accounts and for finding them so many years in arrears? I understand your responsibility is higher up here, but we have a responsibility also. Why does this body not furnish its accounts to you and to the Comptroller and Auditor General?

—I am in a little difficulty here because I am not sufficiently close to the day-to-day operations of any of the semi-State bodies.

We appreciate that.

—In this particular case, if the difficulties had been brought to our notice by the organisation concerned at an earlier date we could have approached the Department of Finance much earlier and tried to get the difficulties eliminated.

577. What concerns this committee is that accounts should have been drawn up with respect to a period closing on a particular date and no contingency should stop that. If there were unresolved matters the accounts should have been prepared on that basis with notes or provisions to that effect. We take a serious view of the fact that no accounts have been forthcoming. Would you not agree with this? We understand your position but do you not agree that if this principle were accepted it would be a very serious inroad on all accounting procedures?

—Subject to what the Comptroller and Auditor General has to say, I think the normal pattern is that accounts from any semi-State body come to him six or nine months after the end of the year.

Mr. Mac Gearailt.—In fact, most of the larger ones come much earlier but on average there is a period of three to six months.

Chairman.—That is reasonable.

Mr. Mac Gearailt.—We approached this body in November, 1972, and got draft accounts from them. From my notes I see we completed the audit in December, 1972, subject to the submission of certain supporting schedules and the outstanding authorities from the Department of Finance. We have been waiting since for the accounts and it was only in the last resort that we decided to approach the Accounting Officer to see if he could bring any influence to bear on the matter. I understand the accounts have not yet been signed but that they are ready for signature.

578. Chairman.—Would you agree, as Accounting Officer, that you have this responsibility and that it is highly desirable that the accounts be completed in time and submitted to you?

—Yes.

579. Is there any way in which we can assist you?

—I am hopeful that this matter has now been tidied up. The Minister has a nominee on the board and we have arranged, since the Comptroller and Auditor General approached us, that a sub-committee of the board will look after this matter, that he will be on it and that we will try to get the accounting situation tidied up. I am hopeful that the accounts for 1971-72 can be signed and sent to the Comptroller and Auditor General shortly and that the accounts for the two following years will be sent to the Comptroller and Auditor General in this calendar year.

580. As you know, this Committee itself is in arrears. Our principal concern would be that accounting procedures are maintained up to date and in an efficient way. We will leave it at that for the moment. If there is any way in which the Committee can assist you, as Accounting Officer, in enforcing the position that should be enforced, we will be glad to co-operate.

—Thank you.

Deputy Tunney.—I should like to associate myself with those remarks. While this is not entirely a question of accountancy, I am sure An Coras Beostoic agus Feola will appreciate that if they had not been so dilatory in what is a fundamental requirement—whatever the consequences to them and whether or not they would be interested—they would have to assume that one’s confidence in them to handle other matters would have to be affected by their inadequacy in what is internal duty devolving upon them and that these accounts should have been available before now.

Chairman.—It is a fairly substantial sum of money. Is the Comptroller and Auditor General satisfied?

Mr. Mac Gearailt.—Yes, thank you.

581. Chairman.—Paragraph 81 of the Report of the Comptroller and Auditor General reads as follows:

“Subhead I.2.—Beef Classification Scheme

A study group was set up by the Minister for Agriculture and Fisheries in November 1970 to advise on the introduction of a scheme of beef classification at the premises of meat exporters. The charge to the subhead represents payments to a meat factory in recoupment of its expenses arising from the processing of cattle to obtain data for the study group.”

Mr. Mac Gearailt.—I understand that the study group have reported on this matter.

582. Deputy H. Gibbons.—Is the study group functioning yet?

—The study group has completed its job. There is now a system of beef classification which is generally acceptable. But there is another problem: that is that the meat processors are not prepared to pay the cost, or any part of it, of doing this classification job, Equally, the Department of Agriculture’s attitude is that since this is really a marketing tool it would not be proper for the Department to employ staff to take it over and do it but that the meat industry ought to contribute something to the job which helps them to market beef more advantageously. This is where we are at the moment.

583. I have two questions: (1) Do I take it from that that it is not being done at all now? (2) Would this not be a function of An Coras Beostoic agus Feola?

—(1) It is not being done at the moment, except that there may be one or two firms doing it voluntarily. (2) I think the meat processors would not be particularly happy with An Coras Beostoic agus Feola doing it; they want it to be done by the Department.

584. This sounds unusual because in fact An Coras Beostoic agus Feola was set up to improve the marketing processes. It seems strange that it would not be acceptable to the meat processors. In other words, I take it that if the Department originally were able to do this work themselves, An Coras Beostoic agus Feola would not have been established. But probably they found this was the better way to do it?

—This is a more general issue in one sense. The idea of setting up a promotion body like An Coras Beostoic agus Feola was to create an agency which would be freer and more flexible in the business of promoting the sale of the particular commodity, in this case, cattle and beef. Nobody from the producers or meat processors is contributing at present to the costs of this semi-State board. The total cost is met by the Exchequer. Even if the Department agreed that Coras Beostoic agus Feola might operate this classification scheme at the expense of the Exchequer, I think the meat industry would still not be willing at present to have An Coras Beostoic agus Feola do it. Their attitude is not terribly clear to us, but it is just possible that they may have a fear at the back of their minds that a levy might be charged on them sooner or later if the system were operated by An Coras Beostoic agus Feola. One way or another, they are not prepared to pay for this system. If they are not prepared voluntarily to operate it and pay something towards it, the Department would be slow to force it on them.

585. Perhaps I do not understand the whole situation but it sounds somewhat contradictory to me. I could imagine a situation where the Coras Beostoic agus Feola people would say: “We have a market for a particular type of meat if you can classify it according to so-and-so”. This means that the meat processing people could not take up that market at that point in time because they would have no classification and, secondly, it is a waste of time on the part of An Coras Beostoic agus Feola.

—It is a fair comment that there is a certain amount of contradiction here because the agency was set up not to trade but merely to promote the sale of beef and cattle and it does its best in that sense. But I am sure any meat processor could operate this or any other system of classification for a particular customer if the customer wanted it. There is a difference between the individual trader operating a system of classification for his own customers and all the meat processors applying it on a national basis.

586. Deputy Tunney.—When you spoke of their anticipated fears of a levy, would those fears have been more proper to a market that was not as advantageous to the processors as is the prevailing one?

—I am not sure. The meat processors may have an argument in their favour in the sense that they say: We have to take all kinds of cattle offered to us and the people to whom we sell the meat, particularly on the British market, are not looking for meat that is classified; they want to classify it themselves. That is one argument. But there is the contrary argument. The basis for the whole concept of classification is that one gradually gets to a point where the commodity one has to sell can be designated simply by a number, or some other simple way, and the buyer, even before he sees the meat, knows exactly what is being consigned to him. This is the merit of a good classification system.

587. Chairman.—Paragraph 82 of the Report of the Comptroller and Auditor General reads as follows:

“Subhead J.—Bord na gCapall (Grant-in-Aid)

I referred in paragraph 76 of my previous report to Bord na gCapall which was set up under the Horse Industry Act, 1970 to establish a National Centre for training in equitation, to advise the Minister for Agriculture and Fisheries in relation to the breeding, sale and export of horses and in relation to associated activities and to perform certain other functions. A grant-in-aid of £100,000 was issued in the year under review to An Bord whose accounts are audited by me. I noticed from the accounts for the period ended 31 March 1972 that An Bord had a cash surplus of £43,000 on hands at that date and I have inquired regarding the departmental controls exercised over the issue of moneys from the grant-in-aid.”

Mr. Mac Gearailt.—There is a reference in this paragraph to a cash surplus of £43,000 on hands at the end of March, 1972, by Bord na gCapall. The Accounting Officer has explained that, as Bord na gCapall had been in existence only from February, 1971, no pattern of expenditure had emerged by March, 1972, and also that £20,000 issued from the Vote in March, 1972, for the purchase of a valuable horse was not required as the purchase fell through. This inflated the balance on hands at 31 March, 1972. I am assured that the present position as regards financing the board is satisfactory.

Chairman.—Would the Accounting Officer like to make any comment on that?

—At that time Bord na gCapall had been only recently set up. One of the things they were aiming to do was to buy some promising horses for jumping competitions and other events. They were involved in March, 1972, in a deal for a horse and they did ask for money to enable them, if the deal went through, to pay for the horse on the spot. We agreed to advance the money but the deal afterwards fell through so that they did carry, as the Comptroller has explained, a lot of cash into the following year. Our relations with the board on the accounting side are entirely satisfactory. We do not have any problems with them.

588. Deputy H. Gibbons.—On subhead F —Agricultural Credit Corporation—how does that heading, “Other Services”, arise in relation to ACC? It is probably in connection with grants.

—I think this goes back to a scheme of assisted loans where we were paying in effect a subsidy on interest rates.

Diminishing sums, I suppose?

—Yes. These work themselves out.

Chairman.—Thank you, Mr. Barry, for your assistance. We are indebted to you for your comprehensive grasp of the very complicated sharing of the very big sum of money involved.

VOTE 38—FISHERIES.

Mr. M. J. Barry further examined.

589. Chairman.—Paragraph 83 of the Report of the Comptroller and Auditor General reads:

“Subhead C.2.—Fishery School

The approval of the Government was obtained in November 1969 for the establishment of a fishery school at Greencastle, Co. Donegal for the training of fishermen. The school is being constructed under the supervision of the National Building Agency on behalf of the Department of Agriculture and Fisheries which will be responsible for its operation. The charge to the subhead, £18,088, represents expenditure incurred on the purchase of the site, construction costs and fees in the year under review. The estimated cost of the project is £150,000.”

Mr. Mac Gearailt.—This paragraph is for information. I understand that additional works might bring the total cost of the project to approximately £170,000 as compared with the estimated figure of £150,000.

590. Deputy H. Gibbons.—I think I asked a question before about the possibility of recruiting fishermen from personnel retiring from the Naval Service or if they retire from the Army. Would there be any inducement to people like that to go into the fishing service?

—I am not sure. I think I promised to inquire about this previously. I cannot recall exactly at the moment. I do remember discussing it with the staff and they did not think that these people would be interested in going into the business and training as skippers and so on.

591. It seems an obvious recruitment source.

—The recruitment at the moment is recruitments of lads who are teenagers. These are the boys who are mostly going to this school at Greencastle. Subsequently, there is a course for fishermen who wish to become skippers. Where ex-naval people would fit into that, I am not sure.

592. Chairman.—Paragraph 84 of the Report of the Comptroller and Auditor General reads:

“Subhead D.3.—Repayment of Advances.

The liability of An Bord Iascaigh Mhara to repay the Exchequer £71,406 of advances made under the Sea Fisheries Act, 1952 was waived in 1970-71 under the provisions of the Sea Fisheries (Amendment) Act, 1963 because certain fishermen had failed to meet their commitments to An Bord in respect of the purchase of boats and gear. The amount waived has been repaid to the Exchequer from this subhead.”

Mr. Mac Gearailt.—This paragraph refers to the write-off of moneys due to the Exchequer by Bord Iascaigh Mhara in respect of repayable advances. The shortfall arising from the write-off is made good to the Exchequer out of this subhead.

593. Deputy Tunney.—With regard to fishermen who did not meet their commitments, was it through no fault of their own or, in common jargon, were they coming the old soldier?

—There is no single explanation. It is true that some of these debts are quite old and fishermen had lean times in the sixties and were not able to meet their commitments. In anticipation of this discussion I have been inquiring what has been happening in recent years and apparently the picture is better. Repayments are coming in more steadily. There is a write-off for 1971-72 and there will be a large write-off in 1972-73 relating to old debts but the modern situatiton is that repayments are coming in quite steadily.

Chairman.—The committee will be coming back to this later and we can discuss the matter fully.

The witness withdrew.

The Committee adjourned.

* See Appendix 15.