Committee Reports > List of Committees > Joint > 1979 > Committee on Commercial State-Sponsored Bodies > Report No. 03 - Min Fhéir (1959) Teoranta

THIRD REPORT

MIN FIÉIR (1959) TEORANTA

I INTRODUCTION

(a) Background

1. In accordance with the provisions of the Grass Meal (Production) Act,1953, Min Fhéir Teoranta was incorporated in March 1954. Under the Act, the Company’s principal objects were the acquisition, drainage and cultivation of bogland and the processing of grass and other plants for sale (including, in particular, the manufacture of grassmeal). In 1956, following a Government decision, the Company was wound up and plans for the erection of a grassmeal factory were abandoned. At that time it was considered that the commercial producers and Comhlucht Siúicre Éireann Teoranta should between them be able to meet in full the market demand for grassmeal.

2. Following the change of Government in 1957 a Committee, known as the Committee on the Glenamoy Grass Meal Project, was appointed to examine the feasibility of reviving the grassmeal scheme. The Committee, which reported in July 1958, recommended that the project should be revived and this recommendation was accepted by the Government.* As a result the Grass Meal (Production) (Amendment) Act, 1959, which provided for the establishment of Min Fhéir (1959) Teoranta, was enacted. That Act applied, with certain amendments, the provisions of the Act of 1953 to the new Company— no change was made in the principal objects referred to in the preceding paragraph. Min Fhéir (1959) Teoranta was incorporated on 5 May 1960 and commenced commercial production in Geesala, Co. Mayo—see Appendix 2—in April 1964.

(b) Capital

3. The authorised share capital of Min Fhéir (1959) Teoranta is £350,000 divided into shares of £1 each. On incorporation the authorised share capital was £200,000. This was increased by £150,000 in 1969. By the end of March, 1974, the issued share capital had reached the limit of £350,000.

4. The Public Capital Programme for 1979 contains a provision of £0.25 million which will go, subject to the enactment of enabling legislation, towards financing a development programme for the Company. The Programme also states that an additional sum of £0.4 million will be required from the Exchequer for re-financing of the Company’s borrowings of previous years.

(c) Resources and Operations

5. The Company has two main functions. First, the growing of grass on reclaimed bogland and second, the manufacture of grassmeal for sale on the home (and export)market. The grassmeal produced is sold to commercial compounders as an ingredient in the production of animal compound feedstuffs. It is also sold directly to farmers for feeding to farm animals. The Company owns two thousand acres of bogland near Geesala which is utilised as follows:—

6. The Company’s sales have averaged just under £96,000 per annum since the commencement of commercial production in 1964. Apart from a small profit in 1967/1968, the Company has consistently incurred losses on its commercial operations. In 1976 the Company achieved its highest turnover i.e. £356,000—a year when there were good growing conditions and when favourable marketing conditions had a beneficial impact on trading. While sales in 1977 declined to £62,000, there was a substantial recovery in 1978 when sales totalled £325,000. The Company had a loss of £43,000 in 1978 which was £26,000 lower than that for 1977. Some of the main features of the operating results since 1964/65, as shown in Appendix 3, are:

—accumulated losses in the balance sheet now total over a £1/4 million

—shareholders’ funds are being continually eroded by the trading losses

—current liabilities have in the past 5 years been exceeding current assets.

7. The Chairman of Min Fhéir in his Annual Report for 1978 stated that the loss in that year again demonstrated the Company’s difficulty in continuing to trade under the burden of higher energy costs and of the debts incurred through past losses. He also referred to the forebearance and co-operation of the Sugar Company in allowing its substantial balance to remain unpaid and to Nítrigin Éireann Teoranta for continuing to supply fertiliser for the 1978 and 1979 seasons while allowing its accumulating debt to remain unpaid.

II OPERATING ENVIRONMENT

(a) Uses and Value of Grassmeal

8. Grassmeal is produced by drying grass in a drying plant and pressing—or grinding—the resultant dried grass into grass nuts or a fine grassmeal. Originally grassmeal was used as a vitamin source in pig and poultry rations. In particular, it helped to give the yellow colouring to egg yolks. With the advent of synthetic vitamins, grassmeal has not been used to the same extent in feeding stuffs. In the course of the taking of evidence, it was pointed out by a representative of Min Fhéir that cheaper additives can now be imported.*

9. It has now been recognised, following experimental work, that grassmeal has an important role to play in ruminant nutrition for milch cows, cattle and sheep.† Coincidentally, in recent years a much higher proportion of all compound feeding stuffs is being produced for cattle. The changed composition between 1970 and 1978 can be gauged from the following Table:—

TABLE 1

Compound Feeding Stuffs

Source: Department of Agriculture—Annual Statistical Series.

It can be seen from the Table that only 15% of compound feeds was provided for cattle in 1970, and that the proportion had risen to 49% in 1978. In the course of the taking of evidence, a technical witness pointed out that grassmeal has an energy value of 75% to 85% of that of barley and 50% more protein than barley. It has to have a minimum crude protein content of 14% in dry matter to qualify for EEC production aid—see paragraph 12. The special value of grassmeal derives from its richness in fibre, which plays a unique role in ruminant feeding.‡

(b) Market for Grassmeal

10. The market for grassmeal has been contracting in recent years. The number of producers has also declined—from nine (in 1954) to five (in 1978). Of the present producers three are in the private sector and two in the State-sponsored sector, i.e. Min Fhéir and Comhlucht Siúicre Éireann Teoranta. The contraction in grassmeal production is at variance with the trend in compound feeds. Consequently, grassmeal constitutes a declining proportion of the total market. This can be illustrated in tabular form:

TABLE 2

Grassmeal and Compound Feeding Stuffs Production

Source: Department of Agriculture.

11. At present the sale of grass products is governed by regulations (principally by the Fertilisers, Feeding Stuffs and Mineral Mixtures Regulations, 1957) made under the Fertilisers, Feeding Stuffs and Mineral Mixtures Act, 1955. The regulations state that a person shall not sell grassmeal under the description of High Grade or Grade 1 unless it contains at least 16% protein and 220 parts per million of carotene. In the case of Standard Grade or Grade 2 grassmeal the specifications are that it should contain at least 14% protein and 150 parts per million of carotene. In the course of the taking of evidence, a technical witness suggested that the digestibility of feeding stuffs should be specified in the regulations.* The Joint Committee considers that the Department of Agriculture should examine the current regulations in the light of present nutritional concepts and make any such revision as is found necessary.

(c) EEC Aid

12. The EEC aids the production of grassmeal and similar dehydrated fodder crops. The scheme was introduced in 1974 to help promote the increased production of protein within the EEC. The aid is now made up of a fixed component and a variable component, which at present is 70% of the difference between the world price and the EEC Community Guide price. Both components are subject to annual review.

13. In 1974 the EEC aid was as low as £2.77 per tonne. It peaked at £23.91 per tonne in September 1978. It has been reduced dramatically for the current 1979/80 marketing year. In June 1979 it was £12.64 per tonne, a decrease of almost 50% on the September 1978 aid level. This resulted from changes in the world market prices and the EEC Community Guide price, which this year has been fixed at 104.55 units of account per tonne. The proposals made by Min Fhéir to the Department of Industry, Commerce and Energy† assumed an EEC aid per tonne increasing from £20 (in 1979) to £27 (in 1982). The impact of EEC aid on Min Fhéir is considered in more detail in Chapter III.

14. A number of requirements have to be met before production aid is paid by the EEC for dried fodder. In the case of dried grass, the product must contain a minimum of 14 per cent crude protein and a maximum of 12 per cent moisture. The aid is payable in respect of dried grassmeal leaving producers’ premises or blended with other raw materials in the manufacture of compound feeding stuffs. The Department of Agriculture administers the scheme for the EEC. Sampling of grassmeal to ensure compliance with the requirements of the EEC scheme is, pending the adoption of a standard Community method, carried out in accordance with the Fertilisers, Feeding Stuffs and Mineral Mixtures Regulations, 1957. In the course of evidence to the Joint Committee, a private grassmeal producer stated that he doubted if there would be very much profit in grassmeal production if it were not for the EEC subsidy.*

(d) Grass Growing on Bogland

15. From a technical standpoint Min Fhéir has shown that grass can be successfully grown on bogland. In the course of the taking of evidence, a technical witness expressed the view that grass grown on bogland is not far behind that produced on the best mineral soil.†† To obtain grassmeal of satisfactory quality, the grass to be used must be cut while it is young. If, due to wet weather the harvesting has to be delayed, the grass may mature to such an extent that it may not be capable of producing grassmeal of acceptable standard for use in compound feeding stuffs. Re-seeded leys will remain fully productive for three to five years, depending on the type of soil, the type of seed sown, the extent of liming and subsequent management.‡ The timing of cutting is crucial if the required levels of protein are to be retained. Protein levels drop and fibre levels increase as the grass crop matures. Weather conditions also influence the number of cuts during the season and thereby affect the total quantity of grassmeal produced per acre. Min Fhéir has three, Sometimes four, crops cut each season, which generally begins in May and ends in November.§

Usually the grass growing season is shorter in West Mayo than on the East Coast. As a consequence, less output of dry matter per acre is produced by Min Fhéir than by a private producer in County Wexford—4 tonnes per acre by the former as against 5 tonnes per acre by the latter.†

(e) Future Prospects for Grassmeal

16. Varying views were expressed to the Joint Committee as to the future prospects of the grassmeal industry. One witness said that the future for grassmeal is “not rosy”* He said that formerly grassmeal carried a premium because it was such a natural contributor to the feeding of pigs and poultry and that it has qualities which are now available synthetically at much cheaper prices.* Other witnesses, while aware of the growing competition from other feedstuffs, were not prepared to commit themselves to any positive forecast on the likely market for grassmeal. However, one witness stated that it was in the area of ruminant nutrition that the potential still remains for grassmeal as an animal feed.** It is clear to the Joint Committee that there has been a movement away from the sale of grassmeal per se towards the production of compound feedstuffs. This trend has occurred because many producers have striven to minimise their reliance on sales of grassmeal in a volatile market with fluctuating prices. Instead producers are now making compound feedstuffs— using grassmeal as one input—which provide greater flexibility and relatively less variability in price. In the course of evidence to the Joint Committee, one technical witness suggested that Min Fhéir should also use its grassmeal in the production of compound feeds. He stated that in the North-West Mayo area, where milk production can be increased, there is tremendous potential for grassmeal compounded into a complete dairy ration, and that that has been done in the eastern part of the country‡ Another technical witness stated that Min Fhéir should ensile the grass it produces and rent kennels to farmers for their dry stock over the winter period.§ The Joint Committee took cognisance of the views of these witnesses in making its evaluation of Min Fhéir’s future—see Chapter V.

III THE COMMERCIAL ROLE OF MIN FHÉIR

(a) Market Share

17. The Committee on the Glenamoy Grass Meal Project (1958) concluded that grassmeal could be produced without a continuing subsidy after a period of five years from the commencement of reclamation, provided the rate of production was 2,000/2,500 tons a year.* While Min Fhéir has been predominantly loss-making, it has consistently achieved the production target in the present decade. In six out of the eight most recent years production has exceeded 2,500 tonnes per annum.** In the last four years production has on average exceeded 3,000 tonnes. The Company now accounts for a quarter of grassmeal production—see Appendix 4. However, it must be borne in mind that in recent years total production of grassmeal has been declining and the number of producers has been contracting.

(b) Financial Performance

18. Min Fhéir’s turnover (i.e. sales) remained at a fairly even level in the years to 1970—the sales between 1964 and 1969 averaged £30,000 per annum. While turnover varied in the subsequent six years, the underlying trend was upwards. In 1976 the Company achieved its highest turnover when sales totalled £356,000. However, turnover in the following year fell to £62,000. The turnover for 1978 was considerably higher—£325,000. Appendix 5 illustrates the Company’s performance as regards turnover over the past fifteen years.

19. As regards profitability, the Company has made a profit on only one occasion—in the year ended 31 March 1968 it made a net profit of £200 and that was a direct result of having received insurance compensation of £17,000 for stock destroyed in a fire. It can be seen from Appendix 5 that the Company’s net losses in most years were less than £20,000. However, in the years 1974/75, 1977 and 1978 the net losses exceeded £40,000. The Company’s accumulated deficit in the balance sheet has now built up to over a £1/4 million.

(c) Costs of Production

20. The Company’s costs of production have been exceeding the price it can realise for its product. In 1977 it experienced major difficulties in disposing of its product. The cost of production was about £100 per tonne but the Company was obliged to sell under cost at about £85 per tonne. Although selling below cost the Company, nevertheless, was unable that year to sell a large volume of its stock and had approximately 1,500 tonnes still unsold at the beginning of the 1978 season. The Company’s marketing programme was more successful in 1978 and the early part of 1979. Accordingly, orders were secured for all the 1977 and 1978 product. Because of the plentiful supply of barley, tapioca and other imported cereals, the Company in 1978 was again forced to sell its product at £15-£20 per tonne below the cost of production.

21. In the course of evidence to the Joint Committee, a representative of Min Fhéir stated that the total cost of producing a tonne of grassmeal was in the region of £110 and that the price obtained was £85 to £90 per tonne during the 1978/79 marketing season, although it reached £105 per tonne in March 1979.* A private grassmeal producer confirmed that these prices also pertained for his production in 1978/79.† The price Min Fhéir gets for its product does, however, vary between the different forms of sales outlet— £105 per tonne for direct sales to farmers and £90 to merchants.‡

22. In the past five years the shortfall between Min Fhéir’s selling price and its cost of production has been offset to an extent by the payment of EEC aids—see paragraphs 12 to 14 inclusive. The aid reached £23.91 per tonne in September 1978. The Department of Agriculture has intimated that the aid for May 1979 was £11.36 per tonne and £12.64 per tonne for June 1979. The reduction in aid will have a negative impact on Min Fhéir’s operations during the current marketing year. Moreover, it could have an impact on its future projections. The Company in its submission of September 1978 to the Department of Industry, Commerce and Energy§ assumed that the EEC aid would continue to increase over the next few years— from £20 (in 1979) to £27 (in 1982). If, however, the level of aid does not increase, the Company’s projected net profit, following a capital re-structuring, would be reduced considerably over the next three years (see Table 3).

TABLE 3

Projected Profitability of Min Fhéir: 1979-1982

It can be seen from the Table that the rate of EEC aid assumed for future years has a considerable impact on the projected profitability of the Company. It is the view of the Joint Committee that given the variability in the level of EEC aid for dried fodder the Company should not assume a high level of aid in making projections of its commercial viability in future years.

(d) Action to improve Min Fhéir’s Operations

23. In recent years Min Fhéir has had to rely to a large extent on bank borrowing and assistance from other State-sponsored bodies. Its dilemma was highlighted in Spring, 1976 when it had not the financial resources to purchase fertilisers for the 1976 season, and could not secure further supplies of fertilisers from Comhlucht Siúicre Éireann Teoranta, not having paid for supplies received since April 1974. In June 1976 the then Minister for Industry and Commerce asked representatives of Nítrigin Éireann Teoranta to undertake an investigation into Min Fhéir’s financial position and future prospects. At the Minister’s request, NET supplied fertilisers for the 1976 season pending an assessment of Min Fhéir’s future. Min Fhéir has continued to acquire its supplies of fertilisers from NET. At the end of March 1979. Min Fhéir owed about £160,000 to NET and £90,000 to CSET.*

24. In June 1976 the then Minister for Industry and Commerce felt that some of the financial difficulties of Min Fhéir might be overcome by bringing in additional managerial expertise. Consequently at Min Fhéir’s Annual General Meeting held in June, 1976, Mr. J. B. Hynes, Managing Director and Mr. P. McSweeney, General Manager of NET and Mr. J. Donovan, an Assistant Secretary in the Department of Industry and Commerce, were appointed to the Board of Min Fhéir.

25. NET’s investigation into the running of Min Fhéir, which was carried out in 1976/77, covered all aspects of Min Fhéir’s operations. Various possibilities aimed at ensuring the future viability of Min Fhéir were examined in detail. Particular attention was given to the condition of existing plant and equipment, the possibility of fuel and power saving, existing packing procedures, fertiliser costs, the possible extension of the present production acreage, the feasibility of diversification into other areas and marketing. On the completion of its investigation NET concluded that the only means of ensuring the future viability of Min Fhéir and maintaining the present level of employment was to:

—fully develop its partially developed acreage with a view to increasing grass production and utilising the existing plant to full capacity, and

—install fuel saving systems and a bulk storage capacity at its plant.

In mid-1977 the capital cost of the NET proposals was in the region of £300,000.

26. In mid-1977 Min Fhéir sought the introduction of amending legislation in order to implement the proposals drawn up by NET.

However, by 1978, following further consultations between Departmental officials and Min Fhéir and a reassessment of the market situation and the future for grassmeal production, it was considered that the development proposals as then envisaged would not ensure the future viability of the Company. The Department accordingly withdrew draft legislative proposals and requested the Company to expedite the submission of revised development proposals.

27. The Company has during the last two years made strenuous efforts to improve its performance. It has replaced or overhauled the field machinery which had been seriously run down. It has had the factory equipment, which was in a grave state of disrepair, examined by engineering staff and put in a proper state of maintenance. Studies on the improvement of plant efficiencies have also been completed with the assistance of the Institute for Industrial Research and Standards and effect has been given to the Institute’s recommendations. In addition, the Company dealt with serious labour problems and restored the confidence of its staff. It has reorganised its management structure and has taken positive steps to establish a sales organisation.*

28. In September 1978 the Board of Min Fhéir submitted revised three-year development proposals to the Department of Industry, Commerce and Energy. The Joint Committee considers the proposals in Chapter V.

IV SOCIAL ASPECTS OF MIN FHÉIR’S OPERATIONS

(a) Background

29. The Joint Committee felt that it was necessary to take account of the social aspects of the Min Fhéir operation before making any recommendations regarding the development proposals at present under review by the parent Department. The Company operates in North West Mayo which has extremely low population density, high dependence on agriculture and relatively low income. The social aspect of the region can be gauged to some extent from the economic and social indicators for County Mayo presented in Appendix 6. Despite declining farm employment, agriculture has been increasing its contribution to the County’s income. By 1973—the last year for which regional data are available—agricultural income contributed almost 28% of the total personal income of County Mayo. The development of agriculture is, inter alia, dependent on the extent to which other sectors can provide employment opportunities for those who are unable to obtain a viable income from farming.

(b) Employment and Income Generated by Min Fhéir

30. In the course of evidence to the Joint Committee, a representative of Min Fhéir stated that the Company was contributing well over £100,000 in wages, salaries and services in the area of North-West Mayo.* As regards employment, the Company employs about ten permanent workers and a further nineteen casual workers are employed for about half the year. Another Min Fhéir representative stated that alternative sources of employment were very limited.† In addition to the direct employment provided by Min Fhéir, small farmers of the area do contract work for the Company. They use their own machines for cutting and hauling grass for the Company.‡

31. Data are available on the extent of unemployment in the hinterland of Geesala where Min Fhéir’s factory is located. The numbers registered as unemployed in the Belmullet Employment Exchange on selected dates over the past six years are as follows:

TABLE 4

Numbers on Live Register: Belmullet (County Mayo)

32. The prospects for job creation in manufacturing industry in the Bangor/Keel area are limited.§ The Industrial Development Authority estimated that manufacturing employment in January 1978 was 150 in the area. The target for new grant-aided jobs in the area in the period 1978/1982 is 100. While no new industries have been announced specifically for North-West Mayo, under the IDA’s Fourth Programme of advance factory construction, a 7,000 square foot factory is to be located at Keel.

(c) Overview

33. The number employed at Min Fhéir is rather small. Due to the remoteness of Geesala and lack of infrastructure the area is unlikely to benefit significantly from any type of industrial activity in the near future. In the course of evidence to the Joint Committee, the Chairman of Min Fhéir stated that the Company’s operation is very largely a socially desirable thing and if it collapsed there would be a disastrous hole in the economy of the locality.** The Joint Committee recognises that the income generated by the Company is an important supplement to part-time fishing and farming in the hinterland of Geesala.

V PROPOSALS FOR THE FUTURE OF MIN FHÉIR

(a) Min Fhéir’s Development Proposals

34. The Board of Min Fhéir submitted development proposals costing £730,000 to the Department of Industry, Commerce and Energy in September 1978. The submission is reproduced in full in Appendix 7. The Chairman of the Company in his Annual Report for 1978 stated that the development proposals are under active consideration by the Department of Industry, Commerce and Energy in consultation with the Department of Finance. Moreover, he pointed out that Departmental approval for the implementation of part of those plans has already been received, relating to the installation of a turf-burning furnace to replace one of the two oil-burning furnaces at the Company’s plant; and that energy cost savings from this development will accrue this season. In essence, the Company’s development proposals consist of

In view of increased costs generally over the past ten months, the cost of implementing the proposals will have increased somewhat from the total of £730,000 envisaged in September 1978. In the following paragraphs, the Joint Committee examines various dimensions of the Company’s plans and the options open to it for the future.

(b) Options for the Future

35. One extreme option facing the Department of Industry. Commerce and Energy would be to wind up the Company. It is the view of the Joint Committee that the adoption of that option would have a detrimental impact on the income of the area around Geesala. The social consequences of such a decision have already been referred to in Chapter IV. In addition to the social consequences, certain costs would have to be met. For example, on closure “once-off” redundancy payments and pay-related benefits would have to be paid. In the medium term, additional unemployment benefits would have to be paid to the erstwhile employees of Min Fhéir. Moreover, the Government would be obliged to pay-off the substantial debts incurred to date by Min Fhéir. On the positive side of this option is the fact that the fixed assets and the 2,000 acres of land owned by the Company could be sold. The net position following closure might show a surplus in these circumstances. It is the view of the Joint Committee that such an option should only be adopted as a last resort, in view of the location of the operation, the tradition of the area, the dependence of a number of local small-holders on income earned from Min Fhéir and the fact that the area is unlikely to attract any significant new industries in the near future.

36. The Company cannot continue operating under the present financial constraints. In particular, the Joint Committee considers that, as the Company is not in a position to repay its cumulative debts, action should be taken, as a matter of urgency, to have them written-off by the Government. As regards the other portions of the Company’s proposals, some have greater merit than others. If the first turf-burning furnace (which has been introduced for the current season) proves to be a success, the Joint Committee would see merit in the introduction of a second one in 1980. As regards the proposal to develop the 426 acres of partially developed land in order to increase annual production from 3,200 to 4,800 tonnes, the Joint Committee believes that this should not be approved at this juncture. The expansion of production is unlikely to be economic unless considerably lower cost energy sources become generally available. As regards the proposal that there should be capital expenditure on turf cutting and crushing equipment, the Joint Committee suggests that alternative means of obtaining turf should be examined e.g. arranging with local contractors to supply it. The final element of the Company’s proposals relates to bulk storage. It appears that there is greater flexibility in having grassmeal available in bulk form, rather than in bags. As was pointed out in evidence by a representative of Min Fhéir, the provision of bulk storage facilities, which the Company lacks at present, would give much greater flexibility in the market place.* In the circumstances, the Joint Committee recommends that approval should be given to the Company for its proposal to provide bulk storage facilities at Geesala.

37. The Joint Committee recommends that the Government should undertake to finance the restricted package of developments recommended in the previous paragraph. That would cost the Exchequer about £½ million. The total package proposed by the Company would cost in excess of £¾ million at 1979 prices. Although the Company’s debts would have to be paid in full by the Exchequer, the cost of the bulk storage facilities and the turf-burning facilities might qualify for EEC aid. The Joint Committee recommends that the Department of Industry, Commerce and Energy should explore the possibility of obtaining such aid for Min Fhéir.

(c) Diversification

38. As regards diversification, the Joint Committee suggests that there are a number of areas that might be examined by the Company. Two ventures—i.e. production of compound feedstuffs and a silage/ cattle project—which might be examined in depth by the Company are set out in the following two paragraphs.

39. In the course of evidence to the Joint Committee, one technical witness suggested that Min Fhéir should used its grassmeal in the production of compound feeds.† He stated that there was tremendous potential in the North-West Mayo area for grassmeal compounded into complete dairy rations. The Mayo County Committee of Agriculture’s recent target for increasing the quantity of milk produced in that county by 20% a year over the next five years certainly points to increased demand for dairy rations. The demand for conventional grassmeal from the feed compound trade is quite volatile because of competition from alternative sources—for example, cheap cereals and soyabeans. Accordingly any producer depending exclusively on sales of conventional grassmeal is placed in a weak trading situation. The best prospects for such producers would seem to lie in developing production and direct selling of compound feeds based on grassmeal. In the case of Min Fhéir, the introduction of a compounding facility would complement its existing operations. In the circumstances, the Joint Committee recommends that the Company examine the profitability of engaging in the compounding of feedstuffs.

40. In the course of evidence to the Joint Committee, a witness stated that Min Fhéir should ensile the grass it produces and rent out slatted kennels to farmers for their cattle.* This arrangement would be for the winter period and would involve the feeding of the Company’s silage to the cattle housed in the slatted kennels. Very little labour would be required, insofar as the employees of the Company would be looking after the cattle during the slack period of the year. The resultant slurry from the cattle could be applied to the Company’s fields. The Joint Committee recommends that the Company examine the feasibility of such a silage/cattle project complementing the production of grassmeal.

(d) Integration of Min Fhéir with Another State-Sponsored Body

41. Min Fhéir in its submission to the Department of Industry, Commerce and Energy, adverted to a suggestion that the Company might be absorbed by some other organisation. The financial advantages of Min Fhéir being absorbed by another body would lie in the area of reduced overhead costs. The Joint Committee believes that, because of the limited size of Min Fhéir’s overheads, the reduction in such costs following absorbtion by another body would be fairly marginal. Indeed, the advantages of absorbtion might more properly lie in the area of expert advice and technical information. On this front, the Joint Committee is of the view that the appointment to the Board of persons with expertise affords the Company necessary information on marketing, research and development.† It was clear to the Joint Committee that Min Fhéir was already benefitting from the expertise of its existing Board Members. In these circumstances, the Joint Committee believes that there would be little advantage in having Min Fhéir absorbed into a larger organisation.

(e) Relationships with Government Departments

42. The Department of Industry, Commerce and Energy, as the parent Government Department, performs a variety of functions in relation to Min Fhir. These include administering the relevant Acts and the appraisal of short and long term financing. Functions of the Department of Agriculture which affect the operations of Min Fhéir are dealt with in paragraphs 11 to 14.

43. There are many aspects of Min Fhéir’s operations which lead to the conclusion that the Company relates more directly to the agricultural sector than it does to the industrial sector. On balance, the Joint Committee believes that Min Fhéir should be regarded as part of the agricultural sector. The Joint Committee accordingly recommends that the matter of transferring Ministerial responsibility for Min Fhéir from the Department of Industry, Commerce and Energy, to the Department of Agriculture should be examined by the Government. The Joint Committee makes this recommendation in the knowledge that transference of Ministerial responsibility would not prove a panacea for Min Fhéir’s problems.

VI CONCLUSION

44. The Joint Committee’s recommendations in regard to the future of Min Fhéir have been made in view of the location of the operation, the tradition of the area, the dependence of a number of local small-holders on the income derived from Min Fhéir and the fact that the area is unlikely to attract any significant new industries in the near future. In short, the Joint Committee believes that the Company, despite its bleak prospects from a commercial point of view, should be facilitated to continue operating provided it imposes only a minimum cost to the Exchequer.

45. Finally the Joint Committee would like to express its appreciation of the great assistance given to it in the course of this inquiry by Mr. William Roche of Comhlucht Siúicre Éireann Teoranta, Dr. Michael Maguire of An Foras Talúntais, Mr. David Gallagher of Wexford Field Products Limited, Mr. Patrick Bolger, County Development Office and Mr. Thomas P. Ferris, full-time consultant to the Committee.

Chairman of the Joint Committee.

4 July, 1979.

*A Summary of the Committee’s Conclusions and Recommendations are set out in Appendix 1.

*See Evidence (Question 10).

†See Evidence (Question 108).

‡See Evidence (Question 109).

*See Evidence (Question 123).

†See Appendix 7 (Table B).

*See Evidence (Question 143).

††See Evidence (Question 115).

‡See Evidence (Question 51).

§See Evidence (Questions 27 and 65).

† See Evidence (Question 115 and 131-133).

* See Evidence (Question 105).

** See Evidence (Question 108).

‡ See Evidence (Question 117).

§ See Evidence (Question 175).

* See Appendix 1.

** 1 long ton = 1.01606 tonnes.

* See Evidence (Question 19).

† See Evidence (Question 134).

‡ See Evidence (Question 14).

§ See Appendix 7 (Table B).

**These projections assume EEC aid per tonne of £20 (1979), £22 (1980), £24 (1981) and £27 (1982). In addition, the projections assume the repayment of debts by the Government; the installation of turf-burning furnaces; purchase of turf-cutting and crushing machinery; the provision of bulk storage facilities; and the development of further acreage under grass.

* See Evidence (Questions 91 and 93).

* See Evidence (Question 41).

*See Evidence (Question 34).

†See Evidence (Question 60).

‡See Evidence (Question 70).

§ For Industiral development purposes, the IDA has a separate subregion for North-West Mayo. It is referred to as Bangor/Keel and it embraces the Geesala locality.

** See Evidence (Question 79).

* See Evidence (Question 54).

† See Evidence (Question 117).

* See Evidence (Question 175).

† See Evidence (Questions 42 and 71).