andMr. Mac Giolla asked the Minister for Fisheries and Forestry if he is aware of the serious difficulties created for wood processors by their inability go get wood on a supply contract basis; the reason a supply contract was agreed with an American firm which is to open in Ireland; and if he will agree to supply timber to all firms on a similar basis.

The circumstances governing the pulpwood and saw-log processing situations are quite dissimilar. In the case of pulpwood there are now only two major processors here, including the firm mentioned. These firms are not competing with each other for available pulpwood supplies and their products, generally speaking, are not in competition with each other. In such circumstances limited contractual arrangements for supply of raw material are fully warranted and indeed essential in these two instances.

As regards saw-log, however, the limited and dispersed supply situation is such that it is not practical to conclude contractual arrangements for a constant supply of raw material, having regard to the large number of processors involved and the variations in their sawmilling capacity. I should add however that in an effort to guarantee some continuity of supply, the Department operate a quota system whereby sawmillers can qualify for a proportion of their large saw-log requirements on a regular basis outside the normal tender system for disposal of State-owned timber.

Arising out of the latter part of the Minister's reply, is this a new procedure in relation to quotas from the Department or has that system been in operation for some time? Is the Minister aware that the wood processing factory which closed down in Fermoy, Home Timber Supplies, stated that among the matters that created difficulties for them was the question of supply? The firm stated that when they were commencing operations they were promised they could get a particular size and type of wood but this was not supplied to them. For that reason will the Minister agree that the tender system should be reviewed in certain cases so that the supply of the correct type of timber can be given on contract?

In reply to the first part of the Deputy's question I should like to state that the quota system has been in operation for a number of years. The reason it was introduced was that some people in the trade failed through the tender system to get adequate supplies. In some cases, they failed to get supplies at all. It was felt that in order to alleviate the pressure on them they should get a certain percentage of their previous year's consumption. The last review brought this to 30 per cent. Saw-millers who can now get 30 per cent of their previous year's consumption of saw-log can seek the remainder under the open tender system. That is being reviewed at present and an interdepartmental committee is looking into the possibility of improving the present tender/quota system.

In relation to the second question I should like to point out that the company which no longer trades did include as one of their difficulties the unavailability of raw material. This matter is in dispute and while it may have been one reason it was very far down a long list of reasons as to why the company failed. I am sure the Deputy is aware of some of the more important reasons why the company failed. There is a problem with saw-log. Supply cannot meet demand and it is as simple as that. The reason is that timber is not growing fast enough and we cannot make it grow any faster; we must await the outcome of nature in relation to the provision of timber. The failure of the company mentioned cannot be put down to the unavailability of raw material.

It is a fact that in order to get supply of the correct type of timber they had to take timber which was not suitable for their purposes?

The normal tendering system that applies is that the tenderer purchases standing timber, big and small. If a successful applicant has timber that he cannot use he can dispose of it to people who need it. There is no problem with that. Normally one buys a forest standing and one takes the timber as it comes.