This 30-page pamphlet was published in 1957 with the support of the Irish Association, and with a foreword by Sir Graham Larmour (Ulster Weaving Co) who had in 1954 succeeded JJ as President of the Association. The production of the pamphlet was supported with advertisements from Ford, Hughes Bros, Ulster Weaving, Gentex, Batchelors, Golden Vale, the Educational Building Society, the National City Bank, Pye, Wolsey, the ESB, Mattersons, Roadstone, Duthie Large and Hibernian Insurance, reflecting the channels of influence available to the then Council of the Association.

Foreword by Sir Graham Larmour

Professor J Johnston SFTCD has a gift for expert diagnosis and for presenting the clinical picture in a most enlivening way. As a "hobby" farmer as well as a University Professor he has made a lifelong study of agricultural economics from a practical as well as an academic standpoint. He has also found time to serve his country for many years as a representative of Dublin University in the Senate of Eire, and has served from time to time as a member of various Government Committees of investigation and inquiry.

Professor Johnston followed the late Lord Charlemont as President of the Irish Association for Cultural, Economic and Social Relations which was founded in 1938 to foster goodwill and more neighbourly relations between Irish people who differ from each other in politics and religion; to stimulate business and commercial relations between the Republic of Ireland and Northern Ireland; and to work for fuller co-operation in matters of general economic and social interest.

The earlier articles in this pamphlet formed the subject matter of an address to the Irish Association in November 1955; the last was written after a discussion sponsored by the Association in Belfast on 12th November 1956, when Professor CF Carter MA, the Queen's University of Belfast, stated the implications for Northern Ireland, and Professor Johnston those for the Republic, of the European Common Market and Free Trade Zone proposals.

The present volume provides a most welcome sequel to the author's previous study of Irish Agriculture in Transition. Everyone whether farmer, housewife, industrialist or statesman has something to learn from the author's penetrating analysis of the economic problems confronting the Irish economy.

Author's Preface

It organises lectures and meetings in Belfast, Dublin and elsewhere, in which the real problems of our respective areas are discussed in an atmosphere of charitable objectivity. Part of what appears in the following pages originated as a lecture in Dublin, and part as a discussion in Belfast, under Irish Association auspices.

The presentation of the main argument was greatly improved as a result of the criticisms and suggestions of Professor Duncan who read a preliminary draft of certain sections which later appeared in the Statist.

I alone am responsible for the views expressed. The first section appeared originally in the Beetgrower and the final section appeared, substantially in its present form, in the Irish Times. All are republished now in pamphlet form by kind permission of the editors concerned.

SECTION 1: A Brief Clinical History

Diagnosis of our economic and social ills should be comprehensive as well as detailed. The historical background, international influences and relationships -- all require to be considered. Statistical measurements are also useful, although they can be misleading at times. Anyhow, most readers have a horror of statistics, and can only absorb them in small doses.

The historical approach is favoured by the politicians. Seven centuries of foreign rule -- or misrule -- have undoubtedly left their mark on the country. But foreign domination has disappeared from most of the country for nearly thirty-four years, and we still find the old problems persisting and new problems appearing which continue to defy solution.

At all events we escaped invasion in the recent world war. Other countries which were devastated and plundered by the invaders have since made a remarkable recovery, and are going ahead in all aspects of their economy in a manner that excites our envy.

Greatest recovery of all -- Western Germany, that lay prostrate at her victors' feet in 1945, is now one of the most solvent countries in Western Europe, and her balance of payments situation is an object of envy and emulation to the United Kingdom.

We cannot blame all our misfortunes on seven centuries of foreign rule, and we must admit some degree of national and individual responsibility for them.

Then, of course, there is Partition. Undoubtedly if this island could have started its self-governing career as a (peacefully) united political entity it would have been better all round. One of the worst aspects of Partition is that it has served as a smoke screen to darken counsel and as an excuse for failure that was perhaps due to other causes. After all, we have got national control of three-fourths of the island.

Its material resources, though deficient in some respects, are among the most fertile in Europe. There is much to be said for making the most of our human and material resources, and not devoting too much attention to things which are at the moment unattainable. If we had followed this course during the last thirty-four years we might, conceivably, have created a political household down here into which we could have invited our Northern fellow-countrymen with pride. They might or might not have accepted the invitation, but it is a worthy social and national ideal to strive to create just such a household.

Before leaving the historical approach, there are a few observations of a general character perhaps worth making.

In the eighteenth century, Ireland, in common with the American Colonies, was a victim of the Old Colonial System. This system, inaugurated in the reign of Charles II, aimed at maintaining primitive economies in the Colonies, and discouraging any growth of local manufacture or any commercial intercourse except with the "Mother Country."

Raw Irish wool might be exported to Britain -- but not to any other country. The export of woollen manufactures to any other country, including Britain, was forbidden. Of course there was a vigorous trade in raw wool smuggled to the Continent, in exchange for foreign wines, but it served to demoralise rather than enrich the country.

The export of Irish cattle to Britain was forbidden in the reign of Charles II. The indirect effect of this was that cattle had to be kept at home until maturity. They became the raw material for the production and export of salted beef, which was a characteristic feature of our eighteenth century economy. Dairying also became relatively much more important. The export of butter from the Cork Butter Market developed during the eighteenth century, and continued, with varying fortunes, nearly to the end of the nineteenth century. The Cork Butter Market was superseded by the Creamery era, and the export of creamery butter was a valuable trade until it disappeared during the second World War. It now shows signs of revival.

These adjustments were imposed on our economy by the commercial policy of another country. Even in our own day our economy suffers from the repercussions of external commercial policies to which we are still very imperfectly adjusted. Having survived the "slings and arrows of outrageous fortune" in the eighteenth century we should be more optimistic about our ability to survive the minor pin pricks of the present era. If dairying and the dead meat trade were the sheet anchors of our economy in the eighteenth century perhaps they may play a similar part in the latter half of the twentieth.

The American Colonies escaped from the old Colonial System by achieving their independence. Ireland achieved commercial but not political freedom in 1782, and profited by the former up to 1800. From that date until 1922 Ireland was part and parcel of the United Kingdom commercial system.

The Irish economy as a whole was unable to adjust itself to the new conditions created by the Industrial Revolution, and our incipient manufactures, with one or two well known exceptions, withered in the atmosphere occasioned by the Act of Union and intensified by the Repeal of the Corn Laws. There is, however, an important qualification to this broad general statement. Belfast and its immediate hinterland did successfully adjust itself to the Industrial Revolution, and built up an industrial structure in which linen manufacture and ship-building were -- and are --the principal features. The economic background of Partition is thus part of our economic history.

In 1922 we achieved political independence for most of the country, but Northern Ireland continued to be an integral part of the British economy. We now had the possibility of using the power of a national state to develop our national economy even if it was territorially truncated. Until 1932 our agricultural position was much the same as if we had remained part of the United Kingdom, and there was a modest expansion of industrial production behind the shelter of a moderate tariff. The Economic War, of 1932 to 1938 distorted our whole agricultural pattern.The World War of 1939 to 1945 produced further difficulties and disabilities which affected the national economy as a whole. Our Agriculture profited from the Second World War only to a minor extent, as its exports were confined to the British market, and could enter it only on terms dictated by the British Ministry of Food.

Meanwhile in the middle 1930s the United Kingdom had begun a new agricultural policy which guaranteed the British (and Northern Irish) farmer a privileged position in the home market. This policy was crystallised in the Agriculture Act of 1947. Production costs are reduced by subsidies on raw materials and final prices are increased to farmers by subsidies, the object of which is to "boost" prices to producers without any serious increase in the prices paid by consumers. The procedure involved costs the British taxpayer hundreds of millions of pounds, but it has increased the physical volume of British agricultural output by some fifty per cent, and multiplied agricultural incomes by about five as compared with 1938.

The effect on our Agriculture is, of course, injurious. The British now import only about 15% of their egg supplies, whereas formerly they imported some 50 per cent. It no longer pays our egg producers to attempt all the year round export of eggs to the British market. They cannot compete with the prices at which British consumers can buy eggs, and they cannot command the (subsidised) prices at which British egg producers can sell eggs. A similar situation exists with regard to most of our agricultural exports to Britain.

Looking back on the history of the last three centuries one might say that we were kept out of the British commercial system in the eighteenth century, when it would have paid Ireland, as it certainly paid Scotland, to be in it. In the nineteenth century we were forced into the British commercial system when it would have paid Ireland to have kept out of it. In the course of the present century, Ireland, apart from Northern Ireland, forced her way out of the British economy, and now our Agriculture is the victim of British agricultural policies, while Northern Ireland shares their full advantages.

In some respects we are back again in the eighteenth century, and the nation must derive what comfort it can from an artificially fostered industrial development, while it deplores an Agriculture that sometimes seems to decompose rather than develop.

Has our recent industrial development served to adjust our national economy to unfavourable external conditions and thus strengthened our national economy as a whole, or has it been parasitic on the agricultural economy, and thus operated as an additional cause of agricultural retrogression?

These are questions to which no simple answer is possible. My general impression is that while some of our new industries have been well worth while, from any point of view, there are others --perhaps many others -- which have merely altered the pattern of production without adding anything to the real income of the nation.

A well devised plan of regional industrial development would have been very helpful indeed. Actually the indiscriminate and over-hasty metropolitan industrialisation which has been promoted has aggravated rather than counteracted the other causes of social disorganisation and economic decay.

Section 2: Agricultural Anaemia

The facts Of our agricultural backwardness are generally admitted. Competent :experts say that our agriculture operates at about forty per cent of capacity. The Economic War undoubtedly upset the agricultural applecart. The second World War created conditions in which only a partial revival was possible. The evidences of failure can be seen by the casual traveller, when not obscured by lofty hedges, in the form of fields producing plentiful crops of ragwort, rushes and thistles. Except in the immediate neighbourhood of Dublin, where every kind of house has an artificial value, derelict cottages, farmhouses, and mansions occur with increasing frequency as one penetrates to more distant regions.

Migration from country to town, especially to the Dublin region, and emigration, have taken place at a rate which has accelerated since 1946. Town population between 1926 and 1951 increased by 284,000 but rural population declined by 295,000 in the same interval. Farm families as well as farm wage workers have been depleted by this process. The heaviest losses have been experienced in the case of the smaller farms but in recent years even families and workers associated with the larger farms have contributed to the exodus.

In the period since 1932, and especially since 1945, there has been a rapid increase of industrialisation. Since 1935 the volume of industrial output has increased by some ninety per cent -- agricultural by a doubtful ten per cent.

The commonly accepted remedy for the emigration disease is more and still more industrialisation. Undoubtedly the industrialisation we have already achieved has been a potent cause of migration from country to town. Once workers have become uprooted from the country and established in an artificial urban environment as migrants they are already more than half (potential) emigrants. It would be interesting to know what proportion of our annual flood of 40,000 emigrants have first acquired the "wanderlust" by becoming migrants. Even if statistics are silent on this point it is arguable that the particular type of industrialisation policy we have pursued, so far from being a fundamental remedy for emigration, has been a fundamental cause of our high rate of migration and emigration.

There are two alternative approaches to the problem of industrialising a mainly agricultural economy, so far as public policy can affect it. One is to consider what are the real human and material resources of the economy, and adopt such measures as will tend to bring about a better allocation of available factors of production to available material resources, with a view to the production of a greater volume of wealth for home consumption and/or for export.

If on such a view agricultural resources are inadequately exploited and the fuller development of these offers the greatest scope for the rapid increase of the national income then these will be given the highest priority, and industrial development in the narrower sense will be left to take care of itself. This approach implies the belief that the development of agricultural purchasing power is the sure foundation for the subsequent development of national industries, well and truly integrated with the national economy and capable of an export potential by reason of their natural vigour.

This was not the approach chosen by successive national governments. It may be noted however that in the case of Denmark, where this approach was chosen, the result was eminently satisfactory to Denmark. In a paper read to the Statistical Society on the 25th November, 1943, Dr Beddy has pointed out that whereas nearly half our working population was engaged in agriculture and only a little more than a quarter in industrial and commercial pursuits, the more efficient agriculture of Denmark occupied only a third of the working population and a further 40% were engaged in commerce and industry. "Denmark's industry and trade are," he points out, "closely linked with her agricultural system. They have developed so as to meet the needs of that system and have done so without tariff protection and despite proximity to two of the most highly industrialised nations of the world, until today Danish industry supplies about eighty per cent of total domestic market requirements."

Notoriously we failed to adopt this approach and, so far as domestic policy is concerned, that is the principal reason for our agricultural anaemia, and our demographic apoplexy and hemorrhage.

The approach we did not adopt was to consider which among the large volume of consumer goods imports it was physically possible to produce here for our limited market of three million people, and to give to prospective entrepreneurs whatever degree of tariff or quota protection seemed necessary for the domestic production of such commodities at a profit. If the result was a higher price (or a lower quality) to the consumer, that was just too bad, but it was the price we were prepared to pay for our particular type of industrial development.

Our industrialists (and who can blame them?) were not prepared to enter into competition with well established foreign rivals unless they had some compensation for the natural disabilities from which new industrial ventures, in a community lacking industrial tradition, must suffer. It would perhaps be unfair to say that they would take no risks unless the consumer's head (and pocket) was presented to them on an (appropriately named) Charger by the Irish equivalent of the Tetrarch of Galilee !

The Distribution Census of 1933 made it quite clear that purchasing power per head in Leinster, and especially in the Dublin area, greatly exceeded the average purchasing power of the more distant rural regions. The market for our rapidly expanding consumer goods industries was highly concentrated in the Metropolitan region. The raw, or semi-processed, materials for their production had to be imported and Dublin was the obvious point of entry. Public transport routes by road, rail and canal radiate outwards from Dublin, the eccentric centre of our whole national economy. In fact our public transport conditions are such that, in spite of Euclid's contention that any two sides of a triangle are greater than the third, it is nearly impossible to go by public transport from many points north or west of Dublin to other points south or west of it without first passing through Dublin. In view of all this it is not surprising that most of the new industries have been established in the Dublin region.

The population of the Dublin "conurbation" (our "great wen") has increased by nearly 200,000 since 1926. Since 1946 the rate of increase has been more than 11,000 per annum. It seems likely that much of the migration to Dublin has taken place from the Midland counties which are among the most fertile in Ireland.

There is a consequent shortage of agricultural labour in these regions, and this is one aspect of our agricultural anaemia. An ex-agricultural worker may think he is "bettering himself" by acquiring an unskilled or semi-skilled industrial job in Dublin at say £7 a week, instead.of remaining on the land at about £5 a week. He may be right in so thinking, but from the national point of view it might be better to lessen the temptation to leave the land by slowing down or altogether halting the rate of industrial development in the Dublin region.

There are, obviously, larger aspects of this matter which deserve separate consideration in another connection. There is, however, one which is generally overlooked, or not seen in its correct economic and financial perspective. The great increase of metropolitan population requires the provision not only of new houses on a vast scale, but also of new schools and churches, new roads, new water mains, new drainage systems, new gas pipes, new electric mains, new transport facilities, etc.

All this involves a heavy capital cost of the largely un-remunerative kind. The community as a whole has to shoulder a ,large proportion of the burden. The dead weight of the national debt is increased, and, as capital becomes more difficult and expensive to raise, the cost of servicing the growing national debt becomes more burdensome.

If the new houses in Dublin and our larger towns reflected an increase in the number of normal family units in the nation as a whole it would be a considerable gain. National statistics are defective from the "family" point of view, but with a static (or decreasing) total population and an abnormally low marriage rate we may infer that there has been no commensurate increase in the number of normal family units in the nation as a whole. Against the thousands of new houses that attract or offend the eye in County Dublin we must set the depleted farm households of rural Ireland and the derelict and abandoned cottages, farm houses, and mansions that offend the eye in every other region.

In the financial year 1954-1955 the State expended £10.5 millions on housing grants and loans. A country whose total population obstinately refuses to grow ought not to need new housing (though possibly improvement of existing housing if its inhabitants would only "stay put". We must debit the major part of our expenditure on new housing to the industrial policy which has caused so many of our rural populations to join a game of "musical chairs" in the Dublin area.

Section 3: Protectionist Alcoholism

Nearly all the major problems of which the Community and its individual members are painfully conscious are directly or indirectly related to the peculiar character of our recent economic differentiation ("development" is not the right word). It is not possible to do more than refer to a few of them.

The "Economic War" provided an occasion or excuse for rapid industrialisation behind tariff and quota barriers. Whether some other reaction to the peculiar circumstances of that period would have been preferable is a matter on which Economists express different opinions.

The Second World War imposed on us a degree of national self-sufficiency beyond anything which we would have freely chosen for ourselves. The momentum of the policies which we adopted during "the years which the locusts have eaten" has been continued right down to the present time, under successive governments, and it is only now becoming possible to consider whether those policies ought to be revised in the light of more fundamental considerations.

The community is rightly unhappy about the rapid rate of rural depopulation. The volume of agricultural output has become static once more after a recent modest expansion. Costs of production in agriculture and industry continue to rise, and we have priced ourselves out of some of our export markets for agricultural produce. "The export trade in manufactured goods, although it has been increased since the war, is still a comparatively small percentage of total exports. The exports of our newly established industries, with few notable exceptions, have been. rightly described as little more than negligible." (Majority Report of Committee of Inquiry into Taxation on industry, par 27).

Our imports of industrial raw materials present us with a formidable import bill. The drawing down of external assets must now cease, and only our agricultural exports can continue to pay this bill. The market for such agricultural products as we still manage to export is rather precarious. By a "set of curious chances" we were somehow able to postpone the date of international insolvency, but the day of reckoning has come at last. During the Second World War the external assets of the banking system increased, perforce, by more than £150 millions. The national economy has lost an equivalent amount since 1945 and the external assets of the banking system are now at or very near bed rock.

To neutralise our natural disabilities for industrial production, and give infant industries a chance to establish themselves, some degree of tariff and/or quota protection is generally admitted to have been necessary. The indiscriminate use of this method and the maintenance of an unduly high protective level produces results which are none the less dangerous because they are disseminated through the economy as a whole.

Every single industry catering for the home market has an interest in the fewest possible other industries being "protected". If an industry must export a significant proportion of its output, in order to survive at all it can gain nothing from "protection", and must be injured more or less by the protection afforded to industries catering exclusively for the home market. This is substantially the situation in which our agriculture as a whole has found itself in recent decades.

"Protection" raises prices and therefore increases the cost of living to the consumer, if the protected article is a consumer good. The consumer, who must pay more for any particular "protected" article, has less to spend on other goods and services, whether "protected" or not, and the producers of these find the home market to that extent contracted. If the "protected" article is a "producer good" the user of it finds his costs of production to that extent increased. Our farmers pay more for their implements and materials than their competitors elsewhere and too that extent their productive and export capacity is lessened.

Hence the general principle emerges that "protection" is more effective for good to the industries "protected", and less harmful to the national economy inversely in proportion to the number of industries "protected". "Protection" is like alcohol. A little alcohol at the opportune moment may save the life or restore the vitality of a generally sober and abstemious man, but the more he indulges on every occasion the less good it can do him on any occasion. Our economy suffers from a kind of protectionist alcoholism.

The effect of indiscriminate industrial protectionism on taxable capacity and the burden of public taxation is inadequately realised. It is a commonplace that the easiest way to reduce that burden is to increase the real income of the nation. The argument of this article is that our new industrialism, in spite of its impressive statistical record, has contributed little or nothing by way of increase of the real income of the community. On closer analysis it may be shown that, by its effect on taxable capacity, it has increased the burden of existing rates of public taxation, and thus operated as a hindrance to the increase of the national wealth.

In Medieval Europe, in fact right down to the time of the French Revolution, it was common in many countries for the sovereign to grant rights of private taxation to important individuals or tolerate the exercise of such rights when they had been successfully usurped. Castles built at strategic points along navigable rivers enabled their rapacious owners to levy toll on passing traffic.

This kind of thing, which was common in France and Germany, strangled the growth of a national exchange economy, impoverished the nations concerned, and delayed the development of a modern industrial and commercial structure. In strong contrast with Continental countries, the delegation by the sovereign power of rights of private taxation to irresponsible individuals was practically unknown in England. This essential freedom of internal commerce was a principle reason for the early emergence of England as a leader in industry and world commerce.

The indiscriminate use of the tariff weapon as a means of promoting new industries involves a similar delegation by the sovereign state of rights of private taxation to private individuals or concerns. About 20,000 new motor vehicles have been acquired by our citizens annually in the last few years. Most of them have been "assembled" (some of' them very badly) in Ireland. These cars probably cost their purchasers on the average at least £100 each more than if it had been possible to import them already assembled, at a normal rate of import duty. (There is a penal rate on the import of assembled cars).

If car purchasers must pay £2,000,000 extra for the privilege of buying an Irish assembled car, they are to that extent less able to contribute to the public revenue in payment for the legitimate services of the State. The extra cost of purchasing the products of an Irish industry, which has no natural foundation in our economy, is not necessarily reflected 100% in the wages and profits of the industry concerned. It may reflect simply the dis-economy of producing on a small scale for a narrow market.

The author of this little book is neither a fanatical teetotaller nor a fanatical anti-Protectionist, and the operative word on which emphasis is laid is "indiscriminate". A recent example is the new tax on imported agricultural machinery, the main effect of which must be to impose a further hindrance to the mechanisation and modernisation of our agriculture.

Even if the political disease of Protectionist Alcoholism had no special incidence on our agriculture, as such, its general effect in impoverishing the community has an important bearing on the agricultural interest, since that is still by far the most important element in our whole national economy.

A detailed analysis will show how it operates specifically to reduce agricultural production, and promote agricultural anaemia. It is a commonplace of economics that the economic activities which are devoted mainly to production for export are presumably the most efficient since they are capable of selling their products abroad in competition with the products of other countries.

It follows that the incomes which the factors engaged in such activities can command should govern the incomes obtainable in economic activities that cater exclusively for the home market, or are not directly concerned with external trade. It does not follow that the money wages of an agricultural labourer should be exactly equal to the money wages of a town labourer of equivalent capacity. There are elements in the real wages of the country labourer, and in the real position of the town labourer as worker and consumer, that justify a certain modest differential of money wage in favour of the latter. In our case the differential has now become far too wide.

The economic relationship has become inverted and so far from the real wage of the Co. Kildare agricultural labourer imposing a ceiling on the real wage of the Dublin labourer, the latter if employed in a "protected" industry (exercising a delegated right of private taxation) is able, by Trade Union pressure, to force his real wage up to a.level which attracts the Co. Kildare labourer to Dublin.

Thus agriculture in the very fertile counties near Dublin is depleted of personnel, and scarcity of agricultural labour becomes a limiting factor to the much needed expansion of agricultural production.

The housing boom in the rapidly expanding "Great Wen" operates in much the same way. The former agricultural labourer who becomes a builder's labourer in Dublin doubtless gains in terms of real wage, but he is no longer producing for export. His wages are now derived to a considerable extent from an increase in the dead weight national debt which now threatens the financial stability of the community. A wrong headed public policy, persisted in continuously for more than a generation, has invited and encouraged him to share in the building of, as it were, an inverted pyramid. Unless the policy is reversed sooner or later the pyramid must topple and then ----- ?

Keynes looked tolerantly on the building of pyramids as a remedy for unemployment in certain circumstances. The economic advantages of building inverted pyramids of the kind indicated would require the genius of a super-Keynes to explain and justify !

Section 4: An Eastern Wind Chill

Our agricultural economy has indeed been distorted by ill-considered domestic policies. It has also been the victim of external circumstances and of the agricultural policy pursued in the United Kingdom since the early 1930's.

The creeping inflation emanating from that country, and the growth of the Welfare State, providing opportunities for lucrative employment for so many of our young female emigrants, have also. had an unfavourable impact on our general agricultural position. A brief historical retrospect will help to elucidate the effect of some of these external influences.

After the turmoil of the Anglo-Irish "troubles" our agriculture settled down under the new national regime into its accustomed groove. The tendency to concentrate on livestock products reasserted itself. Tillage declined to about the normal proportion of some 14 per cent of the agricultural area.

In the middle 1920's our exports of butter usually exceeded 500,000 cwt. and nearly 5 million "great hundreds" of eggs were annually exported to the United Kingdom. Bacon exports were also just short of 500,000 cwt. annually. Live cattle were, of course,, a much more important export. Now cattle, alive or as beef, are almost our only important agricultural export.

In those far off days we had a native oat crop of about 10 million cwt. most of which was processed into animal products. As animal feed it was supplemented by an important import of maize -- usually over 7 million cwt. which is more than twice the amount now imported. Home grown feeding barley has taken its place to some extent.

The general position was that the producer of live stock products, whether he derived his animal feed from his own farm, or bought it from some other Irish farm, or used imported cereals, could count on a favourable relation between the cost of feed and the price obtainable for live stock products. Poultry population showed a slight upward trend and pig population reached a peak in 1031 which has not since been attained.

There are many different sizes of farms in Ireland, but three quarters of them are less than 50 acres in size and more than half of them are less than 30. The farmer with 50 acres or more can do pretty well with dry cattle as his principle source of cash income whether he is a grazier or a mixed tillage farmer. The farmer with 30 acres or less must specialise on live stock products if he is to make a tolerable livelihood at all, and he cannot possibly hope to produce on his own farm all the raw materials required for intensive animal husbandry.

Consequently the possibility of expanding production on a small farm depends on this all important ratio between the cost of feed and the price of animal products. In the first inter-war decade that ratio was generally favourable and the indications are that our small farmers could and did gradually expand the production of the products appropriate to their circumstances.

The index number of the physical volume of agricultural production, based on 1929 as 100, went up from 92 in 1926 to 101 in 1931. In the particular case of live stock product production the index number went up from 92 in 1926 to 103 in 1933. The inference is that small farmers and their families had scope in those days for increasing agricultural output, and the owners of the larger farms had little to complain of.

In 1926 there were 644,000 persons "at work" on farms of all sizes and 301,000 of them were occupied on farms under 30 acres in size --- nearly half our effective agricultural man (and woman) power.

There was a trickle of migration, especially from the smaller farms, in the 1930s which became a flood after 1946, and affected all sizes of farms and all categories of farm labour.

Rather more than a third of our agricultural personnel is now "at work" on farms under 30 acres in size. They constitute a most important section of our total working population. Our chief economic and social problem is to create or restore the conditions in which they may truly be said to be "gainfully" occupied on or near their holdings.

The Economic War of 1932 to 1938 penalised especially the grazier type of farmer who depended on the margin between the buying and the selling prices of dry cattle. Some of them went bankrupt but those of them, who had the wit and the resources to keep on stocking their land have profited by the gradual upward trend in the price of cattle which only came to an end quite recently. The type of animal which sold for 18 shillings a hundredweight in 1934 would at to-day's prices make about 100 shillings.

The wiser members of the grazing fraternity adapted themselves to the new conditions, and, besides cattle farming, equipped themselves to grow wheat and beet for sale in the home market at prices arranged for by the Government. They were thus in a favourable position to profit by the circumstances of the Second World War in which even greater emphasis had to be placed on the growing of wheat and beet.

As far as the small farmers were concerned it was the policy of government to "temper the wind to the shorn lamb". A bounty on eggs and similar provisions for the export of bacon preserved conditions in which livestock product production could be maintained if not expanded. There was no large exodus from the smaller farms between 1926 and 1936.

The Second World War created conditions which seriously prejudiced the circumstances of the small scale farmer while they favoured the large scale well-equipped farmer who had made the necessary adjustments in the previous period. It was no longer merely a question of the ratio between animal feed costs and animal product prices. It was a question of the utter impossibility of securing an adequate supply of balanced rations for the pigs and poultry which means so much to the small scale farmer. Hence a disastrous decline in the pig and poultry population which has not yet been made good.

Developments of British Agricultural policy since 1947 have materially worsened the economic outlook for the Irish small farmer. At considerable cost to the British taxpayer the prices of milk, pigs, and eggs have been raised much above the world level for the British farmer, while the cost of producing them has been diminished by liberal subsidies from the same limitless purse.

The differential price payable for similar products of Irish origin leaves little or no profit for the Irish producer whose production costs are reduced by no public subsidy. British production of pig and poultry products has greatly expanded, leaving less and less room for imports of Irish or other external origin. Consequently Irish egg exports now appear only occasionally and in small quantity on the British market.

Every Irish farmer fully realises that to keep a large poultry flock and feed them on purchased rations is to invite bankruptcy. Pig production is no longer profitable except on farms large enough to produce practically all the food they require. Butter production in the creamery districts is mainly for home consumption. It receives a subsidy at the expense of the Irish taxpayer. Output tends to increase and the price of the small surplus which is again appearing on the British market is supplemented by an export subsidy. If our export of butter reached even the modest dimensions of the 1920s the Irish taxpayer, under present arrangements, would have to shoulder a heavy additional burden.

All this adds up to the fact that the economic climate in which the Irish small farmer has to operate, unfavourable enough since the outbreak of the Second World War, has been considerably worsened as an indirect result of British post-War agricultural policy.

A country of small farmers has found itself impelled, partly as a result of external pressures, to adopt a pattern of agricultural production which would make sense only in a country of large farmers. Dry cattle and wheat are now the major features of our agricultural set-up. On farms of all sizes, wherever the land is at all suitable, wheat is grown. Wheat can only be grown at a reasonable cost of production on large well-equipped farms of fertile land. In order to get an adequate total supply the price has to be fixed high enough to compensate for the higher cost of production on small farms of poor land. This involves making a present of a supernormal profit to the fortunate owners of the more fertile land.

No small scale farmer can hope to make an adequate living by the growing of cash crops or the rearing of beef cattle to be sold as calves or young stores for further fattening on larger farms. The female members of the households who in a normal economic situation find so much to do in the farm dairy, in the pig house, and in the poultry run, found themselves faced with the alternative of twiddling their thumbs at home or clearing out. That they chose migration or emigration in such large numbers need not surprise anyone.

The rural hemorrhage was particularly acute in the intercensal period 1946-1951. In the period 1936-1946 the average exodus was 4,270 per annum. Between 1946 and 1951 the efflux proceeded at the rate of 14,900 persons per annum and affected farms of all sizes as well as all categories of farm labour. Between 1953 and 1955 the exodus suddenly stopped. It is to be hoped that a new equilibrium has been reached and perhaps the beginning of a reverse trend, but perhaps the barrel is, temporarily, empty.

If this new emphasis on the growing of wheat were properly integrated with the traditional importance of dry cattle on farms of suitable size it would be a desirable feature of our agricultural economy. The long term fertility of our land and a desirable expansion of the area under the plough depends on the amount of straw available for "bedding" and the number of cattle, house fed in the winter, that tramp that straw into farmyard manure.

In 1934 a differential price principle was introduced by the British Government which penalised the export of winter house-fed fat cattle. It was more profitable to sell them as out-fed forward stores at any season of the year. Between 1934 and 1948, when a new agreement was made which swept away the objectionable differential principle, only the bare minimum of dry cattle was adequately house-fed in winter. The quality and quantity of farmyard manure suffered accordingly. It would be difficult to estimate the damage which that differential price principle has done to the long term fertility and productivity of our land.

The new agreement of 1948 also created a situation in which it seemed possible to "drown John Bull in eggs". For a year or two there was feverish activity in hatcheries and a widespread tendency among our farmers on all sizes of farms to provide themselves with modern hen-houses and up to date poultry equipment. It was however a false start. The development of British agricultural policy and the Korean War of 1950 produced a further series of price rises, price differentials and price distortions, which did not favour the expansion of livestock product production in our economy.

Based on 1938-39=100 the index of livestock product prices was 271 in 1948. The index number of animal feeding stuff prices was 263.3 in 1948 (1938=100). They were in step. By 1951 the index number of animal feeding stuff prices (at,retail) had shot up to 352.0. The other index number rose only to 290.

In 1954 the index numbers were --- livestock products 320, animal feeding stuff 353.1.

Whether our small farmers buy their feeding stuffs from other Irish farmers or from importers a favourable price ratio must be restored or the economic causes of the rural hemorrhage will continue. The growers of feeding barley, which is rightly replacing Indian meal as our principal animal feed, have a short term interest in getting the highest possible prices from the Irish feeders of pigs and poultry. They have in any case a natural right to get a price equivalent to the world price paid for imported units of similar feeding value.

But the consumer cannot hope for cheaper animal products if animal feed prices remain at their present level or go higher. Perhaps all sections of our economy have a real long term interest in world prices (and national prices) remaining static at their present level, and in such changes of relative prices taking place as will enable the grower of feeding barley to count on an expanding demand for his produce at a profitable price, and the purchaser of feeding barley to plan for an increasing production of animal products with a reasonable prospect of a satisfactory profit margin and an expanding net income.

Section 5: A Drastic Remedy

Our economic difficulties are partly of internal and partly of external origin but it is generally agreed that our main effort must be to put our agricultural economy on a sound basis of economic and technical efficiency. However, a policy to this end which would be desirable if we had equal access to the British market with UK agricultural producers must be modified in certain respects, in view of the fact that agriculture in the UK now enjoys a highly privileged position, and the UK economy is tending to become more and more exclusive so far as our characteristic agricultural exports are concerned. Short of restoring the legislative Union (which is not practical politics), we cannot expect to share those privileges on an equal basis.

It is, indeed, a well-known fact of political history that the Act of Union was originally secured by the large-scale bribery of a few politically influential persons in Ireland. Northern Ireland's share of the £300,000,000 of UK taxpayers' money which is spent on subsidising UK agriculture is in no sense a political bribe, but it creates a situation in which neither Nationalist nor Unionst farmers in Northern Ireland could contemplate union with the Republic without the certain prospect of heavy financial loss.

It has been suggested that our over-hasty development of industrial production of consumer goods, aimed primarily at our small market of 3,000,000 people, has had injurious effects on our national economy. It added to the cost of agricultural production and diminished its export capacity. It increased our dependence on imported raw materials and semi-manufactured goods, and threatens to bring about a position in which our export potential (which is mainly agricultural) can no longer pay in full for such imports. It increased the cost-of-living for our people as a whole, and has diminished our taxable capacity for genuine public purposes by an amount which might well be of the order of £20,000,000 annually. It has created the problem of metropolitan congestion, and aggravated, rather than eased, the public transport problem, while at the same time imposing on the economy the burden of providing the very expensive "social overheads" which the large influx of population to the metropolitan area has made necessary.

Summarising the whole matter it might be said that fiscal freedom was rightly claimed and achieved in 1921 as a life line of economic salvation. As a result of excessive and indiscriminate use it has become a rope of economic self-strangulation.

And yet, if our agriculture must wither in some of its aspects, some degree of industrial development has been imposed on our economy by external circumstances, and the use of the tariff-weapon is entirely justified to foster " infant industries."

In these circumstances there is much to be said for a discriminating policy of regional industrial development, in areas where there is surplus agricultural manpower, relying, perhaps, not so much on tariffs but also on subsidies and fiscal concessions to the new industries it is sought to encourage.

The province of Connaught is such a region, but no politician in his senses has yet suggested that it should be separated from the rest of the country by a Customs barrier as a means of stimulating industrial development in that underdeveloped province. Is it heresy to suggest that, vis-a-viz the UK and the rest of Western Europe, our existing Customs barrier has much the same economic significance and effect as a barrier separating the rest of the Republic from Connaught would have?

We have made mistakes in our domestic economic policy. We should have concentrated our efforts on developing industrial projects which use locally available raw materials of agricultural or other origin, and 'which in the nature of the case might be expected to develop an export potential.

However, if in our economic policies we have drawn our iniquities with cords and our sin "as it were with a cart rope", we are not alone in so doing. Our great neighbour, the United Kingdom, has for decades been pursuing an agricultural policy which is analogous to our industrial policy and is open to much the same criticism. There is also this to be said. If a small country like the Republic or Denmark makes a mess of its national economy, the chief sufferers are, Irish or Danish citizens, and the rest of the world is relatively undisturbed.

But when a great country like the USA or the UK, which has important commercial relations with other national economies, artificially distorts her national price system, other national economies may become disordered and may even be ruined. In the inter-war period Danish exports of bacon to the UK were seriously restricted and the Danish economy made more dependent on trade with Nazi Germany. Denmark is now seeking and finding an outlet for dairy and other produce in the Soviet Union, and New Zealand is feverishly seeking an outlet in non-British markets for an increasing proportion of her butter production. Last year 23,000 tons of New Zealand butter successfully found such a market.

In a recent article in Lloyd's Bank Review, Professor Nash of Aberystwyth has pointed out that UK milk producers receive a price which is 43% in excess of the "import-parity" price. Total production now exceeds the demand for liquid milk and is spilling over into the manufactured milk market, where it competes with imported dairy produce and lessens the outlet in the British market for the dairy produce exports of any country, including the Republic. Subsidies to milk production in the U.K. cost the taxpayer £114,000,000 in 1955-56.

The subsidy to the production. of pig-meat amounted to £47,500,000 in that year. Production (based largely on imported raw materials, which would disappear in the event of war) is now 50% in excess of the pre-war volume. Egg production has as little natural foundation in the British agricultural economy as pig production has, though both are entirely appropriate to the agricultural economies of Denmark and the Republic, and also of Northern Ireland.

Egg production in the U.K. (also based on imported raw materials) cost the taxpayer £27,500,00 in 1955-56. Where formerly there was a 50% deficiency of eggs in the UK to be filled by import, the deficiency is now only 15%. In 1949 there was still a shortage, and our farmers exported nearly 4,000,000 "great hundreds" of eggs to the UK. In 1955 our exports fell to 393,000 "great hundreds," and are likely to remain of negligible amount in the future.

In a recent discussion that took place under the auspices of the Irish Association in Belfast, on "A European Free Trade Area: Pain or Gain?" I argued that our economy threatened with the gradual loss of the British market, must either break out into a European Free Trade area or break down. On the other hand, association with a European Free Trade area would have little attraction for us unless it embodied the "Green Pool" idea -- ie freedom of trade in agricultural surpluses as between the members and associated countries.

Professor Carter, of Queen's University, held that, if such an area came into existence, the UK would have to join, however inconvenient some of the adjustments would be. It was common ground that the UK would not contemplate freedom of trade in agricultural products, on account of her commitments to the Dominions by way of Commonwealth Preferences.

The fundamental reason, of course, is that if British farmers were suddenly confronted with a regime of free trade and world prices, most of them would go bankrupt, and, even if they had 12 years to adjust themselves to it, the adjustment would not be easy. Consequently, if the U.K. becomes associated with a European Free Trade area, it will be only in her industrial capacity.

If the UK was accepted as a member on her own terms, we would gain in terms of agricultural exports (if the "Green Pool" idea is adopted in the common Continental market area), but our industries, new and old, would be exposed to competition in our home market not only from Continental, but also from British, industrialists.

On the other hand, the UK's "own terms" may be too stiff for some Continental countries --- eg Holland, which find the UK's new agricultural policy as little to their liking as we do.

From our point of view, the best thing that could happen would be that the UK should be refused admission. In that case, we should not hesitate to join. If the markets of Western Europe were fully open to our agricultural exports, we would be fully compensated for the loss of all our uneconomic home market industries. In the new and invigorating climate all worthwhile industry, as well as agriculture, would expand and develop the export potential which is now largely a pipe dream.

Perhaps it is more realistic to assume that the United Kingdom will be accepted as a member of the wider European Free Trade area, but Holland, and possibly Denmark, can be counted on to use their influence in favour of some modification of the United Kingdom's proposed terms. In that case we should express our willingness to join the Free Trade area and associate ourselves with these two countries in an effort to persuade the United Kingdom to modify her agricultural policy in a sense favourable to our export interests.

In this connection it is worthy of note that Professor Cooper of Durham, in his recent book on "Competitive Farming", has roundly denounced the British subsidy policy, and in particular the economic waste, from a British point of view, of "boosting" a pig and poultry production programme that involves a heavy import bill for feeding stuffs.

Our industrialists should bear in mind that the reduction of protective tariffs will be gradual and extend over a 10 or 15 year period. Some concession may be obtained in this regard on the ground that we are an "undeveloped economy". If we are left with a tariff no higher than 25 per cent. ad valorem the best of our new industries will not only survive but expand and probably develop an export capacity. Those that cannot survive will be a good riddance and will present no formidable problem of economic dislocation in an expanding economy.

In all our planning we should bear in mind the desirability of developing here an economic structure that, in the fullness of time, will dovetail nicely into that of Northern Ireland. Membership of a European Free Trade area will facilitate us in developing just such an economy, especially if we can use our international influence to secure a favourable modification of the United Kingdom's domestic agricultural policy.

At the present moment, even if reunion with the North were politically possible (which it is not) it is economically impossible, partly because of the United Kingdom's agricultural policy, and partly because our industrial policy in the last three decades has envisaged only a twenty-six county area.

The alternative to joining a European Free Trade area is too painful to contemplate. Immured behind a brass wall of restrictive tariffs, confined to a market of three million people, and threatened with the gradual loss of the British market, while our neighbours in Northern Ireland and elsewhere enjoy the rising standard of living made possible by large scale production and a market of 250,000,000 people, we must watch helplessly an increasing drain of emigration, and endure a crescendo of social disorganisation, economic decay and political disorder that will be literally intolerable.

It is true that Bishop Berkeley queried whether, even if Ireland were surrounded by a wall of brass, we could not provide the simple necessities of life by a rational organisation of domestic production and commerce. But.he never advocated the erection of a wall of brass as a desirable form of economic, architecture. By all means let us practise the social and economic philosophy of Berkeley in our domestic concerns, but let us seize the opportunity of breaking down the wall of brass that surrounds this and many other European national economies.

Some navigational notes:

Copyright Dr Roy Johnston 1999