I had hoped to have read the report on the review of State expenditure in relation to agriculture because I regard it as the most relevant document to date on this matter, apart from the Minister's speech. I regret I have not had an opportunity of reading it, apart from glancing at some of the recommendations contained therein, and I do not therefore propose to pass judgment on the report.
The Parliamentary Secretary said that the farming organisations had not yet furnished a response to this report. I hope those organisations will give the report the attention it deserves because, from my scanty reading, I could see that it is an important contribution towards agricultural thinking, particularly in relation to State intervention. It has grasped a number of nettles which many of us have been afraid to touch. I hope the farming organisations will come forward with their considered and detailed statements in relation to the recommendations and the thinking behind this report.
There is one point I should like to mention. From what I can see, this report was in the hands of the Government in January, 1969 but it was not published until May, 1970. Certainly the introduction bears the date of January, 1969 and, therefore, I presume it was with the Government at that date; however, it may be that I am misinterpreting that date. As the report was not published until May, 1970 the Government had more than a year to consider the matter. Instead of sitting on this report, as apparently they did, they should have released it immediately in order to get comments at that stage. It is a little late now for the Government to express disappointment that the farming organisations are not in a position to respond as quickly as the Government would like.
One of the themes of the report is that State intervention in relation to agriculture should be divided into social expenditure and economic expenditure. In practice it is difficult to make this division but an effort must be made. Economic assistance by the State might mean those elements of State intervention which are concerned with bringing an immediate cash return to the farmer. They are influenced by considerations of whether it is desired to preserve the maximum number of farmers on the land or whether it is considered that help should be given to small farmers. When one uses an economic yardstick, one is concerned with maximising income on the farm without regard as to who gets it or the social effects of this policy.
Many people would react to a policy of the Department of Agriculture which might be governed by social considerations by immediately thinking of dole. People in the cities tend to have strong feelings about what they consider is dole for agriculture. Social expenditure by the Department of Agriculture in relation to farming is not of a dole nature. It can have many justifiable reasons. It is in the national interest, apart from economic considerations, to maintain a large number of people on the land; if they are not earning as much as people elsewhere, the difference must be made up by the Government. The social justification for this might be that it avoids excessive urbanisation. Anyone who has read about the USA will realise that excessive urbanisation can have undesirable social consequences. It can lead to an increase in crime, to pollution and, generally speaking, can lead to much unhappiness. It is fair to say that life in rural areas does not have such problems to the same extent; frequently it has a sense of values that are absent in urban living.
If the State intervenes without an immediate clear economic justification but in order to keep people on the land, this is not necessarily a kind of dole exercise. Possibly it is an exercise in social engineering that can be justified in the light of the wider considerations of preserving a regional balance in the distribution of population and in order to minimise the problems of crime, pollution and so on.
Obviously it is impossible to use the purely social considerations as a yardstick because one would then be making an open-ended commitment with no clear point at which to stop. If purely social considerations were the yardstick, the case could be made for increased expenditure all the time and it would be impossible to continue indefinitely on this course. Therefore, it is necessary to intermingle the social objective and some hard economic realities.
In relation to agriculture the European Economic Community tends to apply to an excessive degree the economic yardstick; it does not take into account the social implications. I know that EEC policy in relation to agriculture is greatly misrepresented. When speaking about the Mansholt Plan people do not talk about it as it exists at the moment but rather discuss the proposals that were put forward in the past and which have since been modified. At the same time, the idea behind Mansholt is that State support to agriculture should gradually be phased out and that the farmers should be able to stand on their own completely in the economic sense without any intervention from the rest of the community.
This may sound very fine to economic theorists but the implications of this may be such a fall in the agricultural population that the social problems to which I referred and which result from excessive organisation could come about. The idea is that instead of people just leaving the land and going to a very big city they should be able to find employment in their own neighbourhood. It is quite possible that the cost of providing dispersed industrial employment to cater for these people and to enable them to live at home and work in industry might be even greater than the cost to the community of keeping them on in agriculture. The result might be that if you do not keep them on in agriculture they might end up in big cities which have social disadvantages. However, we just do not know this. It is something which needs to be studied. I certainly have not thought about it as much as I should.
It is fairly clear that if we are to preserve any sort of a proportion of the population in agriculture, then we must expand exports to a very great extent. Lambertine-Yeates wrote in the late fifties—he was one of the foremost agricultural economists in the world—at least he was when he wrote this, and I do not know if he is alive now—that only a country which exports twice as much agricultural goods as it consumes at home can hope to support 20 per cent of its population in agriculture at a remuneration comparable to that in other sectors. That is applying the economic yardstick.
It is quite clear that anything less than 20 per cent of our population being kept on in agriculture would be unacceptable. We must have at least 20 per cent in agriculture. It is also clear from looking at the figures that we certainly do not export twice as much as we consume at home. In fact, we export less than we consume at home. We export 47 per cent of our agricultural production, whereas we consume 53 per cent. Therefore, applying strictly economic considerations, if we are to preserve 20 per cent of our population in agriculture—and it is an objective which most people would agree with—we must more than double our exports of agricultural produce, that is, if we accept this man's thesis and I think it is a reasonable one.
Where are we to find the markets for these exports? This is where the crucial argument comes in in relation to agriculture, the EEC, international trade and so forth. We just cannot find markets at home to maintain the population in agriculture. To my mind, the EEC is probably the best way of keeping people on the land because it does provide us with export outlets for our agricultural produce which are so vital if we are to maintain at least 20 per cent of our population in agriculture.
One of the important points in relation to achieving this increase in exports and maintaining employment in agriculture is that there should not be any disincentive to expansion built into any State support to agriculture. It is difficult to know whether or not a particular differential subsidy is, in fact, a disincentive to expansion. It has been argued by the farming organisations that the present scale support for creamery milk is a disincentive to expansion in milk production, because the price which farmers get for milk produced above a certain gallonage begins to fall to the extent that they have no incentive to go beyond that gallonage. It is difficult to be sure about this one way or the other, but I think the indications are that there has been in recent months a fairly substantial fall in creamery milk production. I suppose it has been due to other factors as well as the scale system of price support but at the same time there seems to be a prima facie case for saying that rather than benefiting the small farmer this system has had the result of acting as a disincentive to expansion of milk production on his part. The case is not proven, I can see, but there is a fairly good indication that that is the case.
Another question which we have to look into is that of the average age of our farm population. I have not got these statistics with me but I think it is true to say that one of the great problems is the late age of inheritance of farmers. Very often a farmer does not come into ownership of the land until he is 40 or 45 years of age or the father may live on and retain ownership right up to his death.
If the State is going to intervene in other areas of agriculture there is possibly a case for some more attractive incentive to older farmers to transfer their land to their sons. I have not thought sufficiently about this to be able to make any definite suggestion but, as far as I can see, the present policy only has the effect that a pension will be given if a man actually hands over his land to the Land Commission or to some other State body. That, as far as I understand, is what is envisaged by Mansholt, that the farmer will not get the pension unless he hands the farm over to a State body who may distribute it to anybody, maybe somebody who is not related to him at all. I think it is necessary for the State to step in and possibly underwrite a pension or some regular payment which the farmer might receive from his son if the land is transferred from father to son. There is a need not only to encourage the transfer of a farm by an older farmer to the State for distribution but also to encourage the transfer of a farm from father to son. I know this is getting into a difficult area, but the implications of the high age of inheritance are so great for agriculture that there is a strong justification for trying to ensure that young farmers would be in charge of farms, and I would hope that this would be considered by the Government. Of course, it would have to be in the nature of an incentive. There could be no question of anybody telling a man he must transfer his land to his son. That would be interfering altogether too much with the basic rights of inheritance and of people to dispose of their own property. There is a case to be made for some form of incentive to encourage a father who is getting on in years to transfer land to his son.
Rationalisation is needed in relation to the industries which are spin-off industries from agriculture: for instance, the creamery industry and the bacon industry. The case has been made repeatedly, and I do not think there is any need for me to make it, that there is a need for rationalisation here. I was glad to learn from the answer to a Parliamentary Question yesterday that at last a proposal has been referred to the study group which was set up to consider practical proposals for creamery rationalisation. The Parliamentary Secretary, or the Minister, assured me that there were further proposals in the pipeline. I am very glad to hear this. However, I hope that decisions will be taken as soon as possible, and that we can get on with this job, because it is clear that the smaller creameries just simply cannot compete and cannot pay to the farmers the price which the bigger creameries can.
It is very important, therefore, that this rationalisation should take place. It is not enough for the Government to wash their hands and say: "These are independent co-operatives. We do not want to interfere with private enterprise." The Government have the responsibility in the long run, because Government intervention in relation to agriculture has been very great indeed. The influence which the Government can exercise is very great. It is important that, while not interfering to an excessive degree, influence should be used to secure rationalisation and to ensure that the farmer is not forced to accept a lower price than he could get elsewhere because his local creamery or pig factory failed to amalgamate with another in order to achieve the level of efficiency which would facilitate the payment of sufficiently high prices.
There is one point which I would very much like to welcome in this report on the review of State expenditure in relation to agriculture, that is, that the aids to farm efficiency, for instance, land improvement, farm buildings and water supply grants, will be integrated into a comprehensive farm development scheme. The idea here is that these grants would be paid to farmers who take part in an overall scheme for development of the farm. The basic criterion to be applied would be whether or not a sufficient increase in farm income would result from this expenditure. There is a lot of irrational activity in the field of farm buildings, and land improvement, and so forth. A certain farm building might be erected and a considerable amount of State funds might be pumped into it and, in fact, the benefit which the farmer would derive from this improvement, which he had initiated, would not be as great as it should be, and the return on the State investment would not be very great. However, these aids should be given as part of a comprehensive scheme with an applied standard to show whether this improvement would, in the comprehensive setting of the whole comprehensive scheme of development of that farm, result in an increase in income for the farmer. I hope the Minister will make haste in putting this proposal into effect.
It would also bring to a wider number of farmers this concept of farm planning. It is vital that a man should realise that what he is doing now, and the investment he is making now, are part of a scheme of phased development over a period of years which he has worked out in consultation with his adviser. The idea of setting targets for two, three or four years hence, and paying a man when he achieves them, is very important. This whole idea of giving a man something to aim at in the context of a farm plan is very important, to my mind.
I have criticised the present small farm incentive bonus scheme, which covers this area, because it does not apply to a sufficiently wide number of farmers. I forget the details now but I think it applies only to a farmer who is earning less than £700 per annum and who can reach £700 per annum at the end of a period. Farmers who can hope to earn much more than £700 per annum at the end of a period, say a five year period, could also benefit from the idea of having this type of farm plan worked out in co-operation with the advisers.
I hope that, as an interim measure, pending the introduction of this idea of a comprehensive farm development scheme outlined in the report, the Minister will raise to £1,000 the potential income. That would not cost very much. The case for it is pretty clearly made in a reply which I received to a question I put down today about the small farm incentive bonus scheme. There has been a pretty serious decline in the number of farmers who are applying for this scheme because the idea of getting only £700 per annum on the farm has now become quite unrealistic with the increasing cost of living. Farmers realise that a scheme which they can enter only if they can get up to £700 per annum is no use, or not much use.
In the last quarter of 1968, 1,210 farmers were accepted under the scheme. In the last quarter of 1969, this figure was right down to 418. In the last quarter of 1970 it was down to 374. Therefore, there has been a very substantial decline, year by year, in the number of farmers who have been accepted under this scheme. It is quite clear that the terms are not attractive enough. They may have been attractive when the scheme was started, but since then inflation has obviously had its effect and the incentives which are being offered, and the income targets which are being set, no longer mean what they did when the scheme was initiated. An improvement in this scheme is now well overdue.
I was very pleased to see in reply to a question to the Minister for Finance yesterday that there has been an increase in agricultural credit. To be honest, I thought there would not have been in view of the increasing restrictions on credit to other sections of the community. I was glad to see that the number and the volume of loans approved by the Agricultural Credit Corporation were higher in the last quarter of 1970 than in the last quarter of 1969. I hope this will continue to be the case because it is very important that farmers should be able to make these investments in farm development which will enable them to compete in EEC conditions.
To that end I hope the present difficulties between the farmers and the Department will right themselves in due course. Perhaps greater clarity on both sides would be a help. I have not studied the proposals put forward by the National Farmers' Association. Some people are not absolutely sure what the immediate demands are which the farmers' organisation are making. Maybe I am misinformed, or maybe I have not read all the documents I should, but I think it would be helpful if we could have, shall we say, in normal bargaining terms, a statement of the immediate objectives of this campaign, and a corresponding response from the Government stating what they are prepared to offer and gradually, through the process of negotiation, we could come to an agreement.
I think there is certainly in the public mind at the moment an absence of information as to the immediate concrete objectives and the immediate concrete offer the Government are prepared to make. This may be cleared up in the pre-Budget talks which are taking place between the Government and the farmers in the near future. I hope it will. I hope that the differences will not continue for any longer than they need and I hope that the Minister will be able to make a satisfactory offer, an offer which will re realistic and can be accepted by the farmers. In this context, I think that perhaps a rather typical example of the conduct of the Government which has led to this impasse has been their attitude to the call for an increase in liquid milk prices. I think it is fairly clear that in 1970 alone there has been an increase in the cost of production of a gallon of milk equivalent to 6d. In that period, admittedly, increases were granted of 3d per gallon, but these increases were only compensating for increases in costs which had taken place in 1969 and did not take into account, as they were granted early in 1970, of increases in costs subsequently taking place for farmers during 1970.
This is a very bad situation and the Government have had the views of the farming organisations and the submissions of the liquid milk producers for some considerable time now and they know very well, I am sure, that the case for an increase in liquid milk prices is very strong, but they have, to my mind, unnecessarily dawdled in the granting of this increase which I think the Minister agrees as much as I do is necessary. But instead of taking the action which he knows should be taken and granting this increase, he is delaying, and this naturally leads to the frustration which has resulted in the present differences between the Department or the Minister for Agriculture or the Government—wherever is the door at which it should be laid—and the farming community—conduct like delay and lack of preparedness to come out and say exactly what the Government are prepared to offer.
I realise that there are problems in that the Minister might want to give something but he has to go to the Government as a whole and they continue to delay and are preoccupied with other matters and do not come to a decision. This is all very fine—they may be preoccupied with matters concerning the internal security of their own party—but it is not much use to farmers who want increases and a decision on their submissions. They are not getting this decision and that is the reason to a great extent for the present impasse between the agriculture community and the Department and the Government. I hope that this will be remedied and I hope also that there will be brought across to the public in clearer terms exactly what the immediate concrete demands are from the farming community and exactly what the Government, on the other hand, are prepared to offer, so that as in any normal trade dispute—I will not call it a trade dispute but discussions as to what should be the right policy—there will be clearly stated alternatives and we will be able to come to concrete conclusions as quickly as possible.
Returning to other matters which I was discussing earlier, one of the most important things in relation to agricultural development is the question of education in the wider sense of the term. It is absolutely vital that farmers be well up to date on the latest technical development in relation to agriculture. The answers to two questions which I had down today disclosed rather disquieting facts in regard to this. First of all, there is the fact that the number of people going to agricultural colleges has not appreciably increased between 1966-67 and 1970-71. In 1966-67, 565 people went to these agricultural colleges; in 1967-68, the number came down to 530; in 1968-69, it came down again to 514; in 1969-70, it was up slightly but not at all as high as in 1966-67 at 532; and I am glad to see that in 1970-71 it has gone up to 598 but overall the impression we get is of a fluctuating number going through these colleges without any overall increasing trend, without any trend which indicates an overall increase. I think this is very bad because it is clear to me that we do need more and more young farmers who have had the experience of going through an agricultural college and it is rather disquieting that this number has not shown any very dramatic increase.
Another item in this regard which does not show the scale of increase which I feel is essential is the number of farmers who have consulted their agricultural adviser at least once a year. In 1969-70, 36 per cent of the farmers were visited by their agricultural adviser at least once a year. We could analyse all day what happened in relation to the 36 per cent but the interesting thing about that situation is what happened to the 64 per cent who did not have any consultation with their agricultural adviser. Why did they not feel it necessary or did they not bother to have consultation with their agricultural adviser? I am not suggesting that the fact that they do not do so is the fault of the Government or anything like that, but I think the Government are not perhaps giving the leadership. It is possibly not making the advisory service attractive enough to induce farmers to consult with it and the point which I would also like to make is that the figure which was 36 per cent in 1969-70 was 34 per cent in 1965-66. There has only been a very slight increase in the proportion of farmers who consult their adviser once a year.
This is something which again should give grave cause for concern because if that trend continues, it will be 20 years maybe before we will have attained the position where 43 per cent or 44 per cent of the farmers will be consulting their agricultural advisers. That just would not do at all in EEC conditions, so obviously we must have some dramatic rate of increase in the number of farmers who consult these agricultural advisers. We have to take a hard look at the agricultural advisory service to see what way this can be achieved.
There was a plea made here by Deputy L'Estrange against the idea of putting the agricultural advisory service on a national basis. He felt very good contributions were being made by the county committees of agriculture. I do not have any experience in this matter so I cannot comment on that. A hard look needs to be taken at the agricultural advisory service.
One of the problems is that agricultural advisers do not stay in any area long enough to develop a personal relationship with the farmers, which is so important if they are to be invited frequently by farmers to give advice. It is very important that advisers should on their own initiative offer advice to farmers. If a man is in an area long enough he will get around to calling on farmers who have not sought his advice whereas if the adviser is constantly moving from one area to another he will spend all his time with those who seek advice and will never get an opportunity to give advice to those who do not seek it.
Agricultural advisers need to stay in the same place for a considerable length of time. This is not happening because the system which obtains at present means that promotional opportunities are greater for the man who moves around than for the man who remains in an area. If his superior is not much older than he is, his promotional opportunities are next to nil. We must endeavour to find a way to encourage advisers to stay in an area for a reasonable length of time in the interests of the farming community. The best approach to this would be the payment of an extra increment to men who stay in an area for a specified number of years. It is necessary to compensate advisers who do this because they are possibly foregoing promotion by staying in that area.
I want to make one or two points in relation to the eradication of animal diseases. As far as I can gather from a reply made by the Parliamentary Secretary today it is not the policy of the Government to eradicate warble fly completely. He said we could never hope to eradicate the warble fly. If a concerted effort were made, warble fly could be eradicated in one year instead of having this extended State expenditure over many years without getting the desired results. This could be done by compulsory autumn dressing of all cattle at a cost lower than the 4s per beast which is at present borne by the farmer. This would involve the State subsidising the cost of dressing. It would be acceptable if the State put up 2s and the farmer put up the other 2s and it would ensure that farmers would co-operate fully in the general autumn dressing, which is something which did not happen last year.
If the Government are not prepared to spend the money now they are being penny wise and pound foolish. It will cost them a great deal more than the 2s per beast because if warble fly is not eradicated the scheme will have to be reintroduced in a few years time. It should be announced that spot checks will be carried out and farmers who have not had their cattle dressed should be liable to penalty. This type of system was operated in relation to the dehorning of cattle. If this policy were adopted we could have total eradication of warble fly in a short period of years. The present attitude of the Government is defeatist. They seem to think we will never get rid of warble fly. This is not a veterinary problem, it is a political one, of lack of resolution on the part of the Government.
At the present time we have no farm plan. The great defect of the Third Programme for Economic and Social Development is that it does not set targets for the various agricultural commodities. There is no way of knowing what Government policy is in relation to sheep, cattle or milk. The programme sets only an overall target for "agricultural output", which is meaningless. If the Third Programme in relation to agriculture is to be meaningful, targets for each commodity must be set. The Third Programme does not do this although the Second Programme, for all its faults, did. I do not understand why the Government went back on this. The only explanation is that some commodities, particularly sheep, failed dramatically to reach the targets set out in the Second Programme, and this led to so many red faces in the Department of Agriculture that they were not prepared to commit themselves to any targets in the Third Programme. This may keep everybody in the Department of Agriculture happy but it is not in the best interests of the agricultural community. We should at least have some targets so that when we are discussing the Third Programme we will know which commodities are living up to expectation and which are not. The lack of targets should have been contested more vigorously at the time the Third Programme was introduced.
From a reply to a question I had down yesterday it would appear that the 1¾ per cent growth target was not achieved in the years 1969 and 1970. The excuse made by the Minister was that the base year, 1968, proved to be a high one and it was consequently very difficult to improve on the 1¾ per cent in 1969. I cannot understand why that was not taken into account in the reply to my question. Possibly an adjustment could have been made to take account of that so that we would be able to see whether or not we are proceeding towards the target at the rate of expansion which was set out. I did, in a supplementary question, ask whether the Department or the Government expected to achieve the 7 per cent overall growth rate in agricultural output over the period but the Minister was not prepared to commit himself as to whether or not they would achieve the target and more or less told me to wait and see the review of the Third Programme. That sort of question should be answered and the Minister should be in a position to answer it at all times. There is no point in having a programme like this unless the Minister is in a position to say at any given time whether the targets set out are being attained or are in the process of being attained. If that sort of question cannot be answered there is not much point in publishing a document like this.
One of the most welcome trends in farming in recent years has been the development of vertical integration by the farmers. We now have the farmers themselves going into the meat processing industry in a big way through the IMP. This is very valuable and is something which should take place over the whole range of agricultural production because in this way the farmers are in a position to ensure that they get a fair price. There is no necessity for them to take over the whole industry. If they can take over the significant sector of it and ensure that it is run in the best interests of the farmers then they will be able to call the tune for the other sections of the industry, because if the other sections do not keep pace with them in this regard all the farmers will be selling to the farmer-owned business and not to the others and the others will then be forced to come to heel. If we could find a way of getting an IMP situation over the whole agricultural industry, whereby the farmers would be going into the processing of their own goods, and possibly into the retailing of their own goods, they would then be in a position to ensure that they got a proper price for their goods. I hope that such a development will take place.
One point which I raised on many occasions here and which came home again to me with increasing force last night when I was speaking to a number of farmers is the question of compensation for reactors in the brucellosis eradication scheme which is now becoming really effective in County Meath. The idea of having a limit of £120 is wrong; there should be no limit. You can have a cow in calf the combined value of which would exceed £120 but under the present scheme only £120 can be given. If the Department's valuers are competent they should be in a position to decide the worth of the animal. If the animal is worth only £120 the valuer will not offer more than that if he is competent, and if it is worth £130 he would, if there was no limit, be in a position to offer more than £120. At present he cannot do this. This limit is a declaration on the part of the Government of their lack of confidence in their own valuers. They feel they have to put this rein on their valuers and that they cannot allow them freedom to value the animals at their true worth. They are, in effect, saying to them "We believe that if we let you go beyond £120 you would be doing it all the time and you would not be doing it competently, that you would be giving the farmers more than the animals were worth." This is the implication.
There are one or two interesting statistics in this document on State expenditure on agriculture which are indicative of the way in which Government intervention can distort to bad effect the pattern of agricultural production. One thing which has been repeated in this debate is that there has been a failure to keep sheep production up to the requisite level. The target in the Second Programme was only half achieved and, in fact, I think there was a decline in sheep production over the period of that programme, whereas an increase of 200,000 was envisaged. The explanation for this appears to be that Government intervention inadvertently had the effect of discouraging sheep production by making other lines more attractive. This should not happen and Government intervention should be reviewed to ensure that it is not distorting the pattern of production as a whole.
Figures which were presumably available to the Government in 1967 should have warned them that this was going to happen. They should have seen that the output of a particular product per £ of price support by the Government as between the different products was very different, that for every £ of price support given to cattle production the output was £19.3 worth of cattle; for pig production it was £19.8 worth of pigs; for milk production it was £3.7 so that for every £ in support given by the Department only £3.7 worth of milk was being produced, but for sheep production the figure was quite alarming —for every £ of support given by the Government £56 worth of sheep were being produced. Obviously in this situation it was quite unattractive for farmers to go into sheep production because the Government were not supporting sheep production nearly as much as they were the other areas of production. There was an obvious incentive as a result of Government intervention to go out of sheep and into other lines.
It was not, as the Government appeared to imply, that international market conditions had made sheep production unattractive to farmers. The Government's policy had made sheep production unattractive by giving it such a relatively low share of price support. As I said, the Government should have been aware of this as far back as 1967 but apparently they did little or nothing at that time and as yet there is no concrete evidence that sheep numbers are beginning to recover. The Minister says he has evidence of that but he has not produced it. I hope that the Government will be in a position to offer reasonable increases in agricultural prices so that the dispute between the farming community and the Government can be ended and so that farming can get back on to the road of high production which it must be back on if it is to compete in EEC conditions.
