Vol. 218 No. 1
asked the Minister for Finance if he is aware that the restrictions on loans imposed by the Agricultural Credit Corporation are having a retarding effect on agricultural development; and if he will take steps to make adequate credit facilities available for farmers.
35.
(Cavan) asked the Minister for Finance if he will take immediate steps to put the Agricultural Credit Corporation in funds to enable them to meet and discharge all loans offered by them to farmers during the past twelve months where the borrowers have entered into commitments on the strength of the said offers and where the borrowers are prepared and anxious to take up the loans.
36.
asked the Minister for Finance why the Agricultural Credit Corporation have sanctioned loans to farmers for the purchase of farms, livestock, fertilisers, agricultural machinery and implements and have not yet advanced the loans.
I propose with your permission, a Cheann Comhairle, to answer questions Nos. 34 to 36 together.
The State capital budget for the current year, 1965-66, provided for total lending by the Corporation amounting to £4¾ million. This figure substantially exceeded the provision of £3.3 million in the Second Programme for Economic Expansion. I recently reviewed the requirements of the Corporation in consultation with the Minister for Agriculture and, despite the general shortage of capital which has made it necessary to reduce expenditure on the public programme as a whole, I made arrangements to supplement the resources of the Corporation to enable it to achieve the same level of lending as in 1964-65, namely, £5¼ million or more than double the 1963-64 figure and more than treble the figure for 1962-63.
When capital is short, productive needs must have first claim; this accords with the general principle governing national credit policy. In order to ensure that this principle is given effect to, it has been necessary to confine the Corporation's lending to projects of a directly productive nature and to exclude loans for land purchase, funding of bank debts and motor cars.
In pursuance of this policy, funds are not currently being made available to the Corporation from the Exchequer to meet the non-productive purposes mentioned, except where there is a binding commitment between the Corporation and applicant which must be honoured. There are no restrictions being operated by the Corporation in relation to loans for productive purposes and, where such loans are sanctioned, advances are being made as quickly as possible.
There can be no suggestion, therefore, of agricultural development being retarded by the current credit policy of the Corporation. On the contrary if the Corporation did not restrict its loans to directly productive purposes, it could at a time of general scarcity of capital, be charged with operating a policy prejudicial to agricultural development.
(Cavan): Is the Minister not aware that the Agricultural Credit Corporation have cancelled many loans on technical grounds, where farmers had sought these loans, where these loans had been sanctioned to buy land, and where these farmers had entered into commitments and paid deposits to purchase farms? Does the Minister not agree that is most unjust? First of all, does he agree that it is a fact?
I do agree it is a fact, because the borrowers did not comply with the requirements of the loan.
(Cavan): Is the Minister aware that for years past letters offering the loan had a three months' limit, that that three months' limit was never observed and that it was honoured much more in the breach than in the observance? The borrowers were led to believe that this was a mere formality and that if the loan were accepted within a reasonable time it would be forthcoming. Without any warning or any discussion the Agricultural Credit Corporation, because they have not got the money, are now enforcing this three months' limit and are creating chaos and hardship. I would, therefore, appeal to the Minister to put the Agricultural Credit Corporation in funds to honour these offers of loans where farmers had entered into commitments on the strength of them.
Would the Minister not agree that where they have got out of it on legal grounds, the Agricultural Credit Corporation have a moral obligation in these cases?
I am not going to challenge the Minister on his statement but I know for a fact that offers of loans were made to people who, having entered into a commitment to buy land, were then refused without even a case being made. I want to know when the Minister had the consultations with the Agricultural Credit Corporation embracing the wider aspects he has explained to us. Is it more than three months ago?
Does the Minister not agree that where a farmer has given the deeds of a farm to a commercial bank and has a relatively small sum from that bank, which he cannot increase, and wishes to put a proposal to the Agricultural Credit Corporation in respect of a productive plan, he cannot obtain accommodation from the Agricultural Credit Corporation because of a Government direction? The position is a small bank debt debars a farmer from getting accommodation for productive purposes from the Agricultural Credit Corporation.
Would the Deputy bear in mind there are over 200 questions on the Order Paper?
(Cavan): This is a very serious matter. Will the Minister not undertake to ascertain the amount involved in these cancelled loans where people have entered into commitments on foot of them, and put the Corporation in funds to discharge these loans?
In reply to Deputy Barry, I am not going to be a judge of the morals of the Agricultural Credit Corporation. In reply to Deputy Lyons, it is true that the Agricultural Credit Corporation are now pursuing a policy of lending only for productive purposes and these purposes exclude land purchase and funding of bank debts. A considerable amount of their lending has been donated to those specific purposes hitherto but having regard to the fact that they are now more in funds than ever they have been and that these funds are required for productive purposes, I cannot instruct the Agricultural Credit Corporation to change their policy in that respect.
(Cavan): With your permission, Sir, I propose to raise this matter on the adjournment.
With regard to the Minister's statement that the Corporation are confined to the advancing of loans for schemes of a productive nature, would the Minister not consider that the buying of an additional parcel of land by a small farmer is a scheme of a productive nature? How does the Corporation make out that such a scheme is not of a productive nature?
That would be a matter for the Corporation to decide.
Could the Minister give any indication when any farmer went to the Agricultural Credit Corporation with a productive plan and had not got a bank deposit——
The Deputy should remember that Deputies at the end of the list of questions have rights as well as Deputies at the beginning or in the middle of the list. At this rate of going we shall never reach the end.
May I ask a supplementary in view of the fact that I have one of these Parliamentary Questions? Is the Minister aware that in support of the Agricultural Credit Corporation a Senator of the Fianna Fáil Party publicly stated that a veterinary surgeon applied to the Agricultural Credit Corporation for money to buy a Mercedes car and got it; while I am aware that a local farmer who applied for as little as £100 was refused? Surely this is bad practice on the part of the Agricultural Credit Corporation.
I accept that accommodation has been made available for the purchase of motor cars by way of hire purchase. I discovered this and, having regard to the credit situation, I instructed the Corporation to stop that practice.
Mercedes cars are no longer needed for the by-election.
