I gave notice that I wished to raise the subject matter of Question No. 7 on to-day's Order Paper on the Adjournment, because my question was not answered satisfactorily. I want to refer specifically to the tables in the Capital Budget and to Tables 4 and 5 of the Current Budget Tables, 1966. The tables in the Capital Budget indicate the sums to be raised from internal resources and from external sources other than the Exchequer, such as banks, insurance companies, and stock issues. The sums to be found from internal resources are indicated in this table at £1.6 million, and from external resources other than banks, insurance companies and stock issues, at £1 million. The total estimated expenditure from the Agricultural Credit Corporation in this year is £3.6 million.
I want to point to Table 5 of the Current Budget Tables to give the pattern over the past two years. At the end of the financial year, 1964-65, the Exchequer provided £3,850,000 for the Agricultural Credit Corporation and in 1965-66, £3,148,000. I submit that the indication as presented in the Capital Budget for this year is unrealistic and will not be attainable. The items in columns 4 and 5 are unattainable by the Agricultural Credit Corporation and will leave that Corporation, if there is no change in the allocation from the Exchequer, in a parlous condition, and one in which they will not be able to lend £3.6 million for productive purposes.
I want to point to the report of the Agricultural Credit Corporation for the year ending 30th April, 1965. I quote from the last page:
Most of our funds during the year were provided by the Minister for Finance.
If one turns to the balance sheet, one finds that Exchequer advances during the year increased from £600,000 to £4,000,000, an increase of £3,400,000. The position is that last year the Minister for Finance produced £3.4 million and this year he is producing £1 million.
From the balance sheet of 30th April, we find that the bank overdraft increased from £141,435 to £433,415, or in round figures, by something less than £300,000. It is my view, and I am sure the Minister will hardly say me nay, that it is unlikely this bank overdraft will be allowed to proceed at this figure. It will not be allowed to increase.
I want also to refer to another point made on the last page of the same report of the Agricultural Credit Company. It is stated:
As the Balance Sheet shows, the amount outstanding in Farm Credit Bonds on 30th April last was £3,016,735 as compared with £2,934,115 last year.
In other words, farm credit bonds remained almost static and increased during that year by a figure of approximately £82,000 only. Let us remember that in respect of new lendings, all that will be available will be the principal factor in the half-yearly repayments. Let us also remember that over the past two years we had a spectacular increase in lendings. Let us also remember that it is a principle of the Agricultural Credit Corporation that for the first two half-yearly instalments, one repays only the interest and not the principal. So, in fact, the principal will not be available from these heavy lendings in the past 12 months. It appears to me that the figure of £1.6 million in column 4 cannot be achieved. It is absolutely essential that there should be an expansion in agricultural credit if our capital problems and balance of payments problems are to be eased.
As reported at column 1819, volume 221, of the Official Report of the Dáil Debates of Wednesday, 16th March, 1966, Deputy Governey asked the Minister for Finance "the names of the State companies from which the Exchequer borrowed money during the past 12 months, and the amount borrowed from each company." In a statement that was circulated, with your permission, Sir, we find that the Exchequer borrowed back from the Agricultural Credit Corporation after 1st April, 1965, a figure of £500,000, and has since repaid £200,000. I would describe that as raiding the funds of an already hard-pressed organisation to the extent of £500,000 temporarily, and £200,000 as at the moment. In passing, I should point out that there is an error in the printed copy of the table but the editorial staff were good enough to let me know the exact situation. It can be corrected in the bound volume.
The out-turn of 1965-66 is something we must consider. The Minister for Finance succeeded in relation to the Agricultural Credit Corporation in squaring the books, but there was a period when the credit squeeze started which was described as a fortnight of hell for the Agricultural Credit Corporation, when no decision had been made by the Government, when there was no money available and when things were quite impossible.
Let us face the fact that the directors of the Corporation who are doing a good job, many of them for little more than directors' fees—and one may describe that as voluntary work—had made commitments for the funding of bank debts or the purchase of land, and they were instructed that if the security promised did not turn up on the exact date specified, the loan was not to be paid.
I have had the experience of having had to go to the Department of Lands and I succeeded in getting documents there within 48 hours, for which I am extremely grateful to certain officials. Had I not got those documents within 48 hours, a man who had sold a business and bought a farm would not have been in a position to pay his capital sum and would have lost the deposit. Things were that tough. When I see those two figures now, my complaint about them is there is not a hope in blazes of £1.6 million being produced from the internal resources of the Corporation in this financial year and a figure of £1 million from the external resources. Similarly, in the previous financial year, 1965-66, I refer to Table 2, page 5 of the Capital Budget, the out-turn from internal resources was £1.3 million in the previous year. I am aware that other sources produced £1.4 million, too. Even so, this was pre-credit squeeze days and there is no hope, in my opinion, of the Minister, who previously had provided and was constrained to provide, £3,850,000 in 1964-65 and £3,148,000 in 1965-66, being in a position to get away with providing £1 million in the current financial year and providing for productive purposes an adequate supply of agricultural capital.
Let us now examine the definitions upon which, I think, the Minister's case, no matter how he makes it, must rest. This year, according to the Capital Budget, page 23, he will give £500,000 more for productive purposes because the two items, refund of bank debts and purchase of land, have been compulsorily omitted from the lending policy of the Corporation. I want to suggest that definition is sometimes a very flexible thing and "productive purposes" may include purchase of portion of a holding to make it economic. As well as that, very small bank debts very often have to be refunded before a man can set up a policy for productive investment in his farm. All those men are debarred from receiving a loan.
The estimation of the Agricultural Credit Corporation in the past financial year was that they would finish, having lent £7 million, by reason of this cruel brake that was put on— some of this made necessary by the stringent times in which we live—with this reduced to something between £5 million and £6 million. I believe, in this year, that there will be a sharp fall in columns 4 and 5 of Table 4 of the Capital Budget and that, in fact, if the Minister does not assure us now that there will be further payments from the Exchequer, if such are necessary, then there will be a very serious time as far as agricultural credit is concerned, with consequent ill results for the entire country. I want to quote now from the Minister's speech in volume 221, No. 8, column 1309, of the 9th March, 1966, on the Budget. He said:
I am determined, however, that, as soon as possible, there should be a significant lessening of the dependence of the public capital programme both on bank resources and on foreign borrowing. I am anxious that this should take place without drastic cutting-down of the programme but if current savings do not improve sufficiently this may become unavoidable.
Examining the capital programme, as indicated in what has been circulated to us, and what was indicated in the Minister's speech, I find nowhere was such stringency applied as was applied to the Agricultural Credit Corporation.
This is a mistake of the Government. The items of internal revenue of the Agricultural Credit Corporation and of external resources such as banks and insurance companies will, in this year of stringency, not yield what is required. I would seriously ask the Minister, for whom I have the highest regard, and who will understand that there is no personal criticism in my raising this question, to indicate, from whatever sources there are, that he will give the necessary money from the Exchequer to keep the Agricultural Credit Corporation going and if the Agricultural Credit Corporation needs more than £3.6 million for worthy purposes—it seems to me to be a very small amount in an expanding business—that he will find it and provide it as well.
