Ireland’s Other Revolution BALANCED AGRICULTURAL AND INDUSTRIAL ECONOMY SOUGHT

Press, Volume CVI, Issue 31151, 30 August 1966, Page 16

Ireland’s Other Revolution BALANCED AGRICULTURAL AND INDUSTRIAL ECONOMY SOUGHT

<By

TERENCE PRITTIE.

in the "Guardian". Nanchetteri

(Reprinted by arrangement»

In mid-July the Prime Minister of the Republic of Ireland. Mr Sean Lemass, decided to send a Ministerial delegation to Brussels in September for talks with the Commission of the European Common Market and, possibly with the Foreign Ministers of the Six.

The Republic wants to enter the Common Market—necessarily in the wake of Britain, with whom Ireland comprises an economic entity—and its Government will do everything possible to back Britain’s claims for membership and to encourage the Labour Government to make a more forthright declaration of readiness to join.

Mr Lemass favours an unreserved British acceptance of the Treaty of Rome, followed by detailed negotiation of the arrangements for Britain’s phased union with the Six. Ireland would seek entry simultaneously, or possibly in association with Britain. In the meantime, Mr Lemass would favour a realistic reassessment by Britain of food prices—at present one of the major obstacles to acceptance of Britain by the Six. Food Prices the Key Food prices are the key to the Irish attitude. Irish farmers comprise roughly one third of the working population and contribute one third of Ireland’s exports—Britain’s farmers are just over 4 per cent of the working population. A flourishing agriculture is the necessary basis of the Irish economy and Irish agricultural products ought to earn fair prices and a fair return abroad. But British food prices are kept artificially low, by an outworn system of subsidies which may not even help to protect British agriculture. Britain—lreland’s principal markets—is paying too little for Irish agricultural products. As one of Mr Lemass’s Ministers said to me, without rancour: “The real subsidy on agricultural products is the one which is being paid by the Irish farmer.”

Membership of the Common Market would give a big boost to Irish agriculture, but it would not solve all of its problems. A freakish political past has resulted in the wildly excessive subdivision of the soil. In this situation two apparent enemies of farming have turned into two friends in disguise—the steady drift from the land into industry and the evacuation of farms which then become consolidated with next-door holdings. In fact, 14,000 people left the land last year, and the emphasis of Government planning may now move towards keeping as many there as possible. All the time, the Government is devising means of making the land more profitable. Agricultural education has been pushed ahead and “pilot schemes” have been started in a dozen localities in the poorer, more barren West.

The tourist trade is giving increasing employment in these areas. There is an ambitious afforestation programme, and there has been some minor industrial development. Connemara. Donegal and Kerry are littered with the ruins of the cabins of smallholders who stayed where they were in the days of national poverty but who have packed up and gone when the limited economic progress of the rest of Ireland passed them by.

Emigration Heavy About 30,000 Irish people emigrate each year. How long should such an exodus go on? It is a tragic paradox that the Government has had to institute a scheme for “pension-ing-off” farmers at retiring age, in order to speed the consolidation of farm holding, among a people more landhungry and more attached to the soil than any other in Western Europe. Perhaps the major objective of the present Irish Government is to create a balanced economy, in which industrial expansion is pushed ahead but agriculture is not for a moment neglected. The Irish “Industrial Revolution” if that is not too grand a term— is only eight years old and began with the institution of the First Economic Plan of 1958-63. The Second Plan will run up to 1970, with a number of formidable targets which may turn out to be unattainable. For the fulfilment of the plan is dependent on the prosperity of Britain. But the planners have, in any case; already begun to run into difficulties.

First, their achievements. They have raised industrial production since 1958 by 65 per cent and exports by close on 100 per cent. Industrial exports have risen steadily, while agricultural have roughly stagnated. There has been an all-out effort to attract foreign capital to the country, since its own resources were manifestly inadequate for a major programme of expansion.

200 Foreign Firms Today just under 200 foreign firms have established themselves in Ireland. One particularly successful project was that of the Customsfree zone at Shannon Airport, whose new industries exported £22 J million worth of goods last year. Now the Government intends to launch even larger (although not

Customs-free) projects in Galway and Waterford, which have fine harbours, good in ternal communications and local surpluses of labour.

Yet an industrial revolution has to entail growing pains. Last year the economy took some nasty knocks, due chiefly to rising wage demands, higher import bill and the British import levy. Since Ireland sends three quarters of her exports to Britain, she was hit far harder by the levy than any other country. In 1965 the trade deficit was nearly £l5O million, and in spite of takings of £77 million from the tourist trade and a substantial capital inflow, the balance of pav. ments deficit rose from £3l million to £45 million. The trade gap was narrowed by around £2O million during the first half of this year, thanks partly to a tough, antispending budget and a further “little budget” in June.

Crippling Strikes Wage demands have been a major adverse factor. In 1964 the unions secured an overall 12 per cent wage .increase which was to cover a twoyear period. In the event, wage demands began in earnest once more after barely one year. A series of crippling strikes followed. But a tenth of the labour force still earns £lO a week or under. The Government is calling for discipline and restraint, but the real answer is to make industry more efficient. In spite of low wages, unit wage costs are still 5 per cent higher than in Britain. What of the future for the Irish economy? The tourist trade should pull in an extra £l2 million a year by 1970. The newly opened mines at Tynagb. Silvermines and Gortdrum should be exporting £lO million worth of minerals by then. It is hoped to raise overall industrial output by 6 per cent a year, and although there has necessarily been a cutback in capital investment, foreign investment will go on.

Ireland will continue to change. But in spite of material progress the Irishman is managing to retain most of his humour and hospitality, his interest and compassion for other people, his tolerance, informality and occasional waywardness. The shedding of the old bitternesses of the past should at least cancel out the mundane influences of the new industrial age.