Dáil Éireann debate -
Thursday, 3 Jul 1947

Vol. 107 No. 7

Committee on Finance. - Adjournment Debate—Farmers' Interest-Free Loans.

Mr. Blowick

I gave the Minister for Agriculture a notice to-day that on the adjournment I would ask him the following question:—

"If he would be prepared to extend the repayment period of interest-free loans to farmers from four years to eight years and to increase the available maximum loan from five times the valuation to ten times that figure."

During the last few weeks I have received many complaints not only from my own county but from several counties in connection with this interest-free loan to farmers. At first sight it would appear to be splendid help for those who met with serious losses owing to the bad harvest, to the poor quality of the hay fodder, due to the bad harvest, and also because of the general shortage of supplies of stock food on farmsteads consequent on the severe winter conditions we experienced. Now that the loan is about to be put into operation, we find that it does not work out as satisfactorily as we had expected.

I want to suggest to the Minister that, in the case of small farmers with valuations up to £15 and £20, the loan is inadequate. The amount available will be five times the poor law valuation of an applicant's holding. We all know that we have a vast number of farmers with valuations of £5 and £6. In my county we have over 23,000 with valuations under £10. If we take the whole of the western seaboard from Donegal to Kerry, you will find there mostly small farmers. They represent the class that will need to take advantage of the loan. They are faced with this difficulty that the loan available is altogether insufficient for them. It will not afford them any real help. Take the case of a small farmer with a £5 valuation. He may have lost two or three cows which would each be value for £30, or take the case of a non-creamery district where there is a farmer, say, with a holding of a £5 valuation. He may have lost three or four yearlings, or one and a half year old cattle. They would each be worth anything from £10 to £14. The loan available to such men is £25. It would be very small help for the man with the £5 valuation. It would be absolutely inadequate to meet his situation.

The loan is intended to give farmers who have met with serious losses a chance not only of making a fresh start but of being able to repay the loan. In my opinion, it will not put them in that position, because the amount of the loan is too small. I think that if the Minister were to agree to double the amount of the loan that would be made available it would not impose any hardship on the Agricultural Credit Corporation, which is the body that is to loan the money. If the amount were doubled it would be of more help to those who will need to make application for it. I am also asking that the period of repayment be increased from four years to eight years. I think that is not an unreasonable demand, and I am sure the Minister will agree to it. If the figure is doubled for the farmer with the £5 valuation holding, he will be able to apply for a loan of £100. If he had to repay that in four years, with a payment of £25, I do not think he would be able to do it. A man might make a superhuman effort to do that as well as to meet his other commitments relating to the cost of running his house, the payment of rent and other things, but I really do not think he would be able to do it in four years. I am afraid that to ask him to do so would not only discourage him but disgust him. In fact, he might not be able to make the last two or three payments at all. If, instead, the repayments were spread over a longer period the position would be made easier for the borrower. I am well aware, of course, that this is an interest-free loan, to be repaid over a period of four years. I do not want to deny that it is a generous effort, but, at the same time, I want to put it to the Minister that, in my opinion, it is going to prove unworkable in the case of small farmers, who are most in need of the loan.

There is another point that I want to bring to the Minister's notice and that is the question of security. I would ask him to give very careful consideration to this. I have received complaints from farmers who are anxious to avail of the loan to the effect that they cannot easily get security. Many of them are of the opinion that their own holdings ought to be security enough for the loan. If a man's holding is not security for five or ten times the valuation of it, well then it is worth nothing at all. I know that in some of the backward areas— in the mountainous areas—such as Connemara and parts of the County Wicklow that when farmers there who need the loan went to their friends and relations to ask them to go as security, they found that the people on whom they were relying as security were themselves applicants for the loan, and, therefore, would not be accepted as security for others. I would ask the Minister to go into that question and see whether or not he cannot ease that particular situation. I would also strongly impress on him the desirability of extending the repayment period to eight years. Perhaps the Minister may have very sound reasons for not extending it to eight years, but I would ask him at least to consider extending it beyond four years so as to come to the rescue of the people for whom I think the loan is primarily intended, the small farmers who are in many cases living from hand to mouth and to whom the losses during the late winter and spring proved disastrous.

Mr. Hughes

I referred to this matter on the Minister's Estimate, but he made no reference to it whatever in his reply. I am glad, therefore, that Deputy Blowick has given us an opportunity of discussing it again to-night. I am aware that Deputy Mongan made representations to the Minister on the question of the short period for repayment and the matter of the valuation, as in some cases the valuations are very low. As a matter of fact, some farmers had stock out of proportion to their valuation, especially people with sheep who had access to mountain grazing, in whose cases the valuation basis does not meet the needs. I am informed that it is not a hard and fast rule; that is is flexible in its application.

I want, however, to put another aspect of the problem to the Minister. I feel that these people who have suffered very serious losses will have to buy at peak prices when they go to buy stock. If there is any depreciation in prices in the next three or four years, they will find it almost impossible to meet their commitments, notwithstanding the fact that they have not to meet any interest charges. I feel that part of this ought to be made by way of a rehabilitation grant; that whatever advances are made, the recipients should not be asked to repay the full amount. I am almost certain that it will throw a burden of responsibility on a number of people which they will find it impossible to meet, particularly at this very dangerous period. We know that prices have reached a very high level and, if they are provided with capital now and go into the market to buy stock, they will be buying it at an abnormally high level of prices. As a matter of fact, the stock may not show any profit over a period.

I directed the Minister's attention before to what they are doing in Great Britain and Northern Ireland, where they have provided grants for this purpose. It is true that the National Farmers' Union put up funds by voluntary subscription and that the State provided £ for £ for whatever money was put up. Therefore, so far as the individual is concerned, whatever losses were incurred by him were met to a substantial extent by a grant provided in that way. Even if the State is asked to provide a grant of that sort, it will be really a good investment from the national point of view and it will eventually pay dividends. If a man occupying land is hampered by charges that he is unable to meet, if he is not able to get the return that he ought to get from production, if the production is not there—and it will not be there— not only should the Minister meet the problem raised by Deputy Blowick as to extending the period of repayment and increasing the valuation basis from five times to ten times, but I think part of it should be treated as a rehabilitation grant; that the Minister might consider not insisting upon the full amount having to be repaid; that the amount ought to be abated by 25 per cent. anyway.

Mr. Cogan

This scheme was introduced to meet a very extraordinary and exceptional situation and it will not be any reflection on the Minister or the Department if it is found necessary to amend or improve it in any way. I questioned at the time whether it went far enough to meet the needs of those who were severely affected. Representing County Wicklow, I think I can say that that county suffered perhaps more severely than any other county. I know there have been enormous losses among farmers, not only in regard to sheep, but also in regard to cattle. There was an extraordinary death rate amongst cattle, as if an epidemic had swept them away. I think it is necessary to make a distinction between the types of people who suffered losses.

This is a very good scheme for the well-to-do farmer, the prosperous and extensive farmer, who lost a certain amount of stock. If he wishes, he is enabled to replace that stock and he is getting a loan free of interest, even though he may have some capital of his own. But take, for example, the mountain farmer who lost his entire stock of sheep and, perhaps, some cattle as well. That man has lost his entire source of income for the years to come. In the case of sheep, he has lost not only the sheep, but the lambs and the wool, so that the source of his income is gone and he is left almost completely destitute. That man's case is entirely different from that of the more prosperous farmer who might have lost a certain amount of stock but who can perhaps survive his losses. There might be a distinction made between these two types of cases. The man who has lost his entire means of livelihood should be given some definite grant to help him. In the case of the other man, a loan might be sufficient. The extension asked for by Deputy Blowick is, I think, absolutely necessary, particularly for the poorer type of farmer. It would, I think, be impossible for that type of farmer to repay the loan within four years.

The Minister and his Department must have learned a lot during the past one or two months in the course of their investigation into this question. It would be interesting if the Minister could give some estimate of the losses that have been brought to his notice as a result of this scheme. It would be interesting if he would give us, from the reports received from his inspectors, some idea of the counties or districts which have suffered most severely. This is a matter of vital national importance. The people affected are important producers and it is absolutely essential that, not only should the scheme be beneficial, but that it should be workable, so that the people whom it is intended to benefit will not find themselves worse off in the course of a year or two. If the period is extended, it will benefit a large number of these people.

Minister for Agriculture (Mr. Smith)

Deputy Blowick opened this discussion on the note that he had received complaints from people—I suppose farmers —in his district, and perhaps outside it, because of the unsatisfactory conditions attaching to this scheme. Deputy Blowick may have received these complaints.

Mr. Blowick

I did.

Mr. Smith

I say that he may have received these complaints, but my Department has received very few of them. It may be that farmers would never think of writing to me as an individual, but I am a Deputy, too, representing a certain constituency in which losses were sustained, and, as a Deputy, apart altogether from the fact that I am the Minister in charge of this Department, farmers do write to me off and on, telling me exactly how they feel about certain things, and, apart from their telling me how they feel, I have a fair idea of their views because I meet them and attend their fairs when I have time. I discuss various matters with them, and—I say it in no boasting way—I know that farmers feel that this is a good scheme. The farmers admit that it is a generous scheme. The farmers who have suffered losses and who are taking advantage of it tell me that it is a good, generous scheme, and, while one will always gets complaints, I can only say, while not disputing the fact that Deputy Blowick or other Deputies may have got complaints, that, as a Minister and as a Deputy, I could count on the fingers of one hand, and have some fingers left over, all the complaints I have received. It is true that I got a resolution from the County Committee of Agriculture in County Kerry and another from the committee in County Clare, one asking me to extend the two year period to five years and the other asking me to extend it to six years. The suggestion was also made by one of these committees that I should increase the limit of five times the valuation. That is not a limit, and I have announced in this House that it is not a limit.

Mr. Blowick

The Minister's inspectors have informed applicants that it is.

Mr. Smith

I have announced as best I can in speaking in this House that I have discretionary power and that I have given that figure as a general guide, but, in cases where the valuation is small and where the losses have been severe, I can depart from that, have departed from that and will depart from that.

Mr. Blowick

To what limit?

Mr. Smith

To whatever limit I think is just and reasonable, having regard to the circumstances presented to me by those who make the report.

Mr. Halliden

That is a very important statement and I hope the Press will take note of it.

Mr. Smith

The Deputy knows how it is with the Press. I have no control over the Press. The Press will take note of things as it pleases them and as it suits their business. Sometimes they will not take note of things and sometimes, without doing so, they will write a leading article without telling the public what that leading article is about, and so on. These are methods available to the Press and I cannot dispute their right to use them.

Mr. Halliden

In case the Press do not take note of it, would the Minister issue an advertisement to that effect, because the public are quite unaware of it? It is very important and very desirable and I appreciate it highly, but the public generally do not know it.

Mr. Smith

I do not think an advertisement will be necessary. I am nearly sure that I made in this House a statement that I would not regard myself as being bound by the five times the amount of the valuation, where the circumstances, as shown to me in the report of my inspector, warrant me in departing from it. I gave that as a general guide. Deputy Blowick talks about the man with the £10 valuation having lost a number of cows. We all know what a £10 valuation is and we know what a man can feed in the way of cows on a holding of £10 valuation. We know that, unless a man has conacre and is a very active and industrious man who extends his activities outside his holding of £10 valuation, if he carries three cows on that holding, he will be doing extra well.

Mr. Blowick

In creamery districts, they carry many more than three cows on a £10 valuation.

Mr. Smith

I wonder. They will not do it, unless, as I say, they take conacre. However, that is a matter about which we will not dispute. All I can say is that if that man lost two cows, it would represent a heavy loss, but five times ten are 50, and, dear as cattle have become, he will buy two cows for about £50.

What, then, is our experience? We have received under this scheme roughly 4,000 applications, and in some cases loans have been given—700 or 800 have been paid and 700 or 800 more approved for payment. A very large number are ready to go forward to the Agricultural Credit Corporation. It is we who inspect, approve and agree with the application and it is the Agricultural Credit Corporation which lends the money. We carry the risk, and I can assure the House that I have given instructions that they are to get on with these as quickly as possible. That has been done, and a very large proportion of these borrowers have not asked for five times the valuation.

Mr. Blowick

Amongst the small valuations?

Mr. Smith

I am saying that they have not asked for it.

Donnchadh Ó Briain

Let the Minister speak.

Mr. Blowick

Let Deputy Ó Briain mind his own business. This is much too important a matter to be dealt with by throwing interruptions across the floor. I am very interested in this matter, and the Deputy might mind his own business. I am trying to help the Minister out.

An Leas-Cheann Comhairle

The asking of questions can be a very serious interruption at times.

Mr. Smith

As the solicitor said when the daughter sought to prompt her mother in the witness box: "Let her alone; she can paddle her own canoe", so it is with me. I admit that assistance is all right, but I will paddle my own canoe in this matter. I have given the House the number of applications I have got, the number paid and the number in course of payment, and I have said that, in the great proportion of cases, the applicants have asked for less than they could have got, according to the terms of the scheme. Where they asked for more and where it was shown that, because of the special circumstances, they were entitled to extra consideration, they have got more, and, from whatever balance is left, will get more.

On the matter of time, I have had no complaint and whether I had or not would not make any difference, because I feel that, in spite of what Deputy Hughes has stated and the case made by other Deputies, farmers are satisfied with this scheme.

Mr. Hughes

I am glad to hear that.

Mr. Smith

And I feel that they are satisfied with the promptness with which it was made available to them— no shilly-shallying about it, a straightforward application form which could be filled in by a child, a form in respect of which they understand that they have to get some sort of sureties, to which they raise no objection, because, as reasonable men, they know that it is customary to give sureties. They find little difficulty in that matter and I think I have received only two letters stating that applicants had difficulty in getting sureties.

An Leas-Cheann Comhairle

May I remind the Minister that it is now 10.30 p.m.?

Mr. Smith

This is an important matter and perhaps I might be allowed to finish what I have to say. With regard to this matter of the four years' period being too long, it may be too long or too short. How do we know? How do we know what the circumstances of a man who gets a loan will be in four years' time? He might win the Sweep. Deputy Blowick apparently is able to assess the time it will take a man to get on his feet to such an extent as will enable him to pay back the loan.

Mr. Hughes

They will not all win the Sweep.

Mr. Smith

When you start off by saying to a man: "Here is £50, £60 or £100 for four years, free of interest, and you need not give a shilling back for a year and a half in order to get into your stride," I can give this assurance that none of these people will be hanged by the neck, even if they do not make good at the end of the period. I am quite positive, however, having regard to the history of previous loans, that, as I said before, while farmers may be slow to pay in certain circumstances, practically every shilling of this money will be recovered.

Deputy Hughes is a man whom I regard as a sensible man—he knows men and things—but I do not understand how Deputy Hughes can suggest that one could devise a means by which one could justly and equitably write off any portion of this amount and regard it as a sort of present, free, gratis and for nothing, to those who have suffered losses. There will be hundreds of farmers who have suffered losses who will not apply for this money, who will feel themselves able to make whatever replacements are necessary. Who is to say what organisation could be set up to go from farm-house to farm-house to determine the losses and apportion any sum of money one could name? The thing is not a practical suggestion.

Mr. Hughes

It is being done elsewhere.

Mr. Smith

It is really not expected by the farmers, and you are going far ahead of them and of what they are thinking in that suggestion. Instead of interpreting what is in their minds, I have interpreted what they expect under this scheme, and, as I say, the facilities were given to them in a way which made them feel that here was something they understood, something devised by people who understand them. You may try to decry as you like the merits of the scheme, but those for whose benefit it was devised and intended have approved of it, and, if they have any complaints to make of a serious nature, I would surely have heard of them just as any other Deputy.

Mr. Hughes

Has the Minister any figures?

Mr. Smith

I have tons of them.

The Dáil adjourned at 10.35 p.m. until 10.30 a.m. on Friday, 4th July.