Dáil Éireann - Volume 91 - 17 November, 1943
Adjournment Debate. - Flax Development Board.
Mr. Dillon Mr. Dillon
Mr. Dillon: I asked a question yesterday about the way in which a certain payment of 2/6 per stone, which was forthcoming from the British  Government to flax growers in this country, was being disposed of by the Irish Government, through whose hands, I believe, it passed on its way from the British Ministry of Supply to the producers of flax here. I am trying to-night to clear up an ambiguity, and I am trying to do that on behalf of the flax growers in the Country Monaghan and, at the request of Deputy T. J. O'Donovan, on behalf of the flax growers of West Cork.
What happened was this. Our Government, on behalf of the flax growers here, agreed to sell the whole crop to the British Ministry of Supply, and our Government got the best price they could for it. That price bore some relation, though it was not identical, to the price paid in Northern Ireland. During the season, the British Ministry of Supply increased the price paid in Northern Ireland by 1/6 per stone. However, before they decided to pay that increase, certain producers in Éire had already been paid for their flax and the British Government said they wished these producers, who had already been paid, to get the 1/6 as well as the other producers, and they invited the Irish Government to take over the 1/6 on behalf of the growers here and see that those who had already delivered flax would get the extra amount of money. So far as I know, that was done.
But then, in the following year, a new price was fixed for flax, and I understand that that new price for flax included a bonus of 2/6 per stone on all flax purchased and sold to the British Ministry of Supply. That was to say, that the British Ministry of Supply would pay direct to the grower a basic price for flax and that then there would be paid to the Irish Department of Agriculture, for distribution amongst the growers, a bonus of 2/6 a stone on all the flax delivered, over and above the basic price. Growers in this country believe that they were given only 1/6 of that 2/6, that 1/- was retained by the Government, and that the Government used that 1/- to finance the Flax Development Board in Éire, which had been set up by the Government for the purpose  of assisting interested parties to erect flax dams, scutching mills and other equipment for the finishing of flax; that is to say, the separation of the flax from the tow and the preparation of the crop for export as flax, yarn and tow.
The beneficiaries of grants made by the Flax Development Board are largely persons who want to set up scutch mills in the immediate vicinity of districts where flax growing is carried on, on a large scale, notably in Cork. But the people who set up these scutch mills do not set them up out of love for the farmers; they do not set them up in order to accommodate the farmers; they set them up because they believe they are going to make a profit out of them. Some of the scutch mills were erected by very wealthy North of Ireland flax companies, who wanted to get the flax in those areas, and who knew they could make a good thing out of the scutching.
Deputies not familiar with the flax-growing areas may not be aware that the practice has grown up in this country of scutch millers retaining the tow. In the old days the scutch miller returned both flax and tow to the grower, because in those days the tow was not worth very much; some growers would not bother to bring it away. Inasmuch as some of them got out of the habit of bringing tow away, ultimately the practice spread of the scutch miller keeping the tow. During this war it has been discovered that tow is very valuable for some particular purpose for which the British require it. Indeed, some people now say the tow is nearly as valuable as the flax.
The gentlemen who set up the scutch mills do not do so because they have any love for the flax growers; they do it because they know that apart from the value of the flax, the residuary tow is something they can sell at a very handsome profit. The growers say: “If these gentlemen want to set up scutch mills, why should we be levied upon in order to provide grants to defray 50 per cent. of their expenditure in erecting scutch mills, out of which they will make a  fine profit?” I cannot but say that the growers have a just complaint, if this be true.
Now, during the last general election campaign this allegation was made to me. I understood the Minister's difficulties in making this agreement with the British Government, and I did not want to start a hare, even during an election in which it might be advantageous to me in County Monaghan, if the statement had no foundation. I put the case before the Department. I asked was there any truth in the allegation that the British Government gave 2/6 and the Irish Government passed on only 1/6 of that amount to the growers. I was assured, on the Minister's authority, that there was no foundation for it. I went back to Monaghan and said: “You cannot proceed along these lines. There is no use in spreading a rumour amongst the flax growers, which is calculated to deter them from growing the crop, when the rumour is not true”—and I had the Minister's word for it that it was not true. Judge my astonishment after the election when the Minister came to speak on the Estimate and when he told us that the allegation was substantially true. When he was winding up the debate, Deputy O'Donovan and I raised this question with him across the floor of the House, and I then understood him to say, quite clearly, that our allegation was substantially true, that of the bonus of 2/6 he was retaining 1/-, that it was going to the Flax Development Board, and was being used for the purpose of subsidising the erection of the scutch mills. Fearing I misunderstood him, I put down a Parliamentary Question and you may imagine my astonishment when I heard, in reply to that question, a denial that there was any truth in the allegation—exactly the same information as I got when I made the inquiry during the general election campaign.
I do not know where I am, and those representing the flax-growing constituencies do not know where they are. We want, if the Minister will be good enough to give it now, a clear statement of the facts, and if it be true that he is keeping back from the flax  growers 1/- out of every 2/6 per stone bonus that the British Government are giving to them. We want to know on what grounds can he justify subsidising wealthy firms erecting scutch mills here for their own advantage out of the proceeds of the price of flax. The people who grow flax here are not grabbing or selfish or unreasonable.
Deputies who are familiar with the process will realise that flax is one of the most laborious crops one can grow, and one of the severest on the land. It has to be pulled by hand. We have only one or two flax-pulling machines in the country. You cannot cut flax. You have to pull it and you have to ret it. Most farmers who have not lived beside a retting dam do not realise what that means. It is as if you killed a horse in your back yard and left it there until the slow process of decomposition set in. That is all part of the necessary operations to get the flax ready for the laboratories to work.
Furthermore, it is true that our farmers are getting the same price per stone for flax that the flax growers in Northern Ireland are getting, but the British Ministry of Supply in Northern Ireland gives the farmers who grow flax there, in addition to the price they are being paid for it, a subsidy of £10 per acre. Therefore, the farmers up there are getting a very much better price than our farmers. The flax growers here quite realise that the Minister for Agriculture cannot control the price. He can only try to get the best price he can. What they do complain of is that, when he has made his bargain and got the best price that he can for the farmers—producers in this country—he should retain 1/- of it and give it to people who are well able to finance their own business. That is the burden of our complaint. I would be glad if the Minister would first clarify the position, and then indicate to me, if he can, that whatever has been the practice in the past, if he wants to finance the Flax Development Board, he will do it from some other fund and not out of the price paid to those who produce the flax. If it is  to be the national policy to pay those fellows who erect scutch mills, let the Minister do that by getting the money from the Exchequer. I think that will not be necessary because they will do it themselves if they believe they are going to make money out of it, and if they do not think that they are going to make money they will not touch it.
If, however, the Minister wants to provide that inducement, let him do it out of the general taxation of the country. It is not fair to do it out of the labour of those who are producing the crop. The growing of flax is of great advantage to the country and to our general economy, and, therefore, the people who produce it should not be specially penalised simply because those who handle it want to make a little more money than they have been making hitherto.
Minister for Agriculture (Dr. Ryan) James Ryan
Minister for Agriculture (Dr. Ryan): I must say that I am glad in a way that this question has been raised by Deputy Dillon. The Deputy said he was raising it in order to clear up an ambiguity. I admit that, on my part, there was a certain amount of ambiguity, though I hope to explain the position more clearly now as we have taken it, if you like, in its historical background. I propose, first of all, to deal with the 1942 crop. At the beginning of 1942, the British Ministry of Supply agreed to pay prices from 21/6 to 26/6 per stone. As Deputies who are familiar with the flax trade know, there are six grades of flax, and there is a difference of 1/- between each of those grades. The price agreed upon by the British Ministry of Supply was, as I have said, 21/6 to 26/6 per stone, according to grade. As in the case of a lot of other commodities of that kind negotiations go on throughout the year. The spokesmen on our side tried to impress the Ministry concerned in England that that price was not remunerative or attractive, and evidently the arguments they put forward influenced and made some impression on the British Ministry of Supply. The result, at any rate, was that in February, 1943, they agreed to give another 1/6 on the 1942 crop. At that time a great  deal of the flax of the 1942 crop had been marketed, and the British Ministry of Supply, or its officials, seeing that the Flax Development Board was about to be set up here—I will deal with the board later—asked that the board would distribute this 1/6 on the 1942 crop. It was to be a retrospective payment.
About the same time negotiations were taking place in connection with the 1943 crop. I want Deputies to be clear that the price for the 1942 crop was 21/6 to 26/6 per stone, and that subsequently the 1/6 was added. For the 1943 crop the Ministry of Supply at the other side agreed to pay 25/- to 30/- per stone, according to grade, and, further, that if the acreage reached a substantial amount—as a matter of fact the acreage named was 25,000— they were agreeable to pay another 1/6. In other words, the British Ministry of Supply was anxious to get as much flax as possible grown, and as an inducement to the people here to go more into flax it agreed to pay a higher price for a bigger production. The extra 1/6 which it agreed to pay was on condition that 25,000 acres would be put under flax. It was verified to the British Ministry of Supply before the flax was actually harvested that we had reached the 25,000 acres. As a matter of fact, we went slightly over it, and the extra 1/6 was therefore being paid for the 1943 crop. In this case, however, it was not paid through the Board but paid direct to the growers, so that instead of the price being as originally announced 25/- to 30/- per stone, it was 26/6 to 31/6 for the 1943 crop. That is, so far as the growers and the bonus are concerned.
Let me now take the Board. The point was made—I cannot say whether it was raised on the British side or on our side—that we hardly had sufficient scutch mills and dams to deal with this large acreage. The negotiators on this side argued that their provision would not be a justifiable charge on the taxpayers here, because this was an emergency crop, and there was no guarantee that when the war was over the British Ministry of Supply would take our flax. If they agreed to take it for five years after the war, some  case might be made for meeting the charge that would arise on our funds. Deputy Dillon has asked why should we give anything to people like scutch-millers and those who make retting dams because, as he said, they naturally go into the business to make a profit. In turn, of course, they could look on this as a temporary business. It was not very easy to get either nationals or foreigners to come in here and erect scutch mills when there was no guarantee except perhaps for this year, next year and the year after; no guarantee, at any rate, except for one year after the war.
It was necessary, therefore, to encourage those people to put up those scutch mills and farmers to make dams and offer them a certain grant—not by any means the whole cost, but a certain grant. We, on our side, had argued that it was not fair to ask the taxpayer here to do it. The British Ministry of Supply said: “All right, we will do that.” That was done. The point at which this 2/6 arose was, I admit, confusing. I have looked up what I said in the Dáil. I did not actually say that the whole of the 2/6 was meant for the grower. I said that 2/6 was being provided, 1/6 going to the grower and 1/- to the board. The 2/6 arose in this way. At the time that the bonus of 1/6 for the grower was being discussed, the British Ministry of Supply agreed to finance the Flax Board. Roughly, what they had in mind was an annual grant of about 1/- per stone on the flax produced. In fact, that has not been adhered to at all. I think that for the last year, for instance, the amount provided for the board was much more than 1/- per stone. I think that is how the confusion arose in connection with the 2/6. As I say, the board did, in practice, get more than the 1/-.
The board was set up, if you like, to encourage scutch mill owners to improve their scutch mill equipment, and also to encourage growers to make retting dams, by giving them a grant as part payment of the capital involved. The board has also employed a staff for that purpose. All that has to be paid for by the board. Nothing arises on my Vote for it. The point I want to  make clear is this: If we had at that stage said we were not prepared to do that, the growers would not get any more. The growers got 1/6 and there was never any question of getting another 1/- by way of bonus. It cannot be said that anything was taken from growers in order to finance the board. It cannot even be said that it was suggested if the board had not been set up, that the growers would have got more money.
As Deputy Dillon proceeded with his argument a few points were raised that were not altogether relevant, concerning tow and the price paid for it here and in the North of Ireland. The question of the utilisation of tow has been a vexed one amongst flax growers and I met deputations about it from practically all of our flax-growing counties, Monaghan, Cavan and Donegal. I have been trying to frame an Order which would cover all the points they had in mind. It is not an easy matter to deal with, but we may succeed in doing so and, that being so, it should see the light of day shortly. It is to secure the right of the grower to get the tow back and to control the charges made by scutch mills.
Mr. Dillon Mr. Dillon
Mr. Dillon: For scutching?
Dr. Ryan Dr. Ryan
Dr. Ryan: Yes. I think we may succeed in making an Order of that kind. Deputy Dillon was not correct in saying that the price paid for flax is the same here as in the North of Ireland. The price here is 1/6 per stone higher than in the North of Ireland, but Deputy Dillon was correct in saying that in the North they get £10 production subsidy per acre, while no such production subsidy is given here. The ordinary yield from an acre of flax is from 25 to 30 stones. I do not say that the 1/6 paid here goes a long way to offset the difference but it goes some way. Generally, I am anxious to have the matter squared up.
Mr. Hughes Mr. Hughes
Mr. Hughes: Is it the board negotiates the price?
Dr. Ryan Dr. Ryan
 Dr. Ryan: From this on the board will advise me.
Mr. Hughes Mr. Hughes
Mr. Hughes: Can the Minister say how growers' interests are represented on the board?
Dr. Ryan Dr. Ryan
Dr. Ryan: Growers are not directly represented.
Mr. Hughes Mr. Hughes
Mr. Hughes: Why should not the growers be represented? Would it not settle the question if they were directly represented, as they would then feel that their interests were properly served? Will the Minister consider giving growers representation?
Mr. Dillon Mr. Dillon
Mr. Dillon: I think the Minister's statement has substantially cleared up the ambiguity. There is one point outstanding, and that is, the general uneasiness that prevails amongst growers as to whether grading is properly supervised on their behalf, so as to ensure that growers are getting a price appropriate to what they supply, and that the flax is not graded too low by the British officials. Has the Minister any check on that?
Dr. Ryan Dr. Ryan
Dr. Ryan: The only check is that our inspector is present at the mixing and if he is appealed to, he will examine the grading to see if it has been unfair. I am told that in a few instances where the inspector agreed with the growers he got the buyers to change the grading. My information from the Department, which, in turn, is from the inspectors, who attend the mixing is that the grading is very fair, on the whole, and that they have not had to complain. As to the question raised by Deputy Hughes, we are only concerned as to how the board is composed. We were not very sure what the functions of the board would be. There are, as a matter of fact, three directors, one an ex-official of the Department and two acting officers of the Department. They deal largely with the flax question. If there was any suggestion or hope that the board should be made permanent, then we would have to get representation for the growers and others concerned.
Mr. Hughes Mr. Hughes
 Mr. Hughes: How many are there at present on the Board?
Dr. Ryan Dr. Ryan
Dr. Ryan: Three.
 The Dáil adjourned at 9.25 p.m. until 3 p.m. on Thursday, 18th November, 1943.
Dáil Éireann 91 Adjournment Debate. Flax Development Board.