Private Members' Business. - Agricultural Credit Bill, 1972: Second Stage.

I move: "That the Bill be now read a Second Time."

The primary purpose of the Bill is to increase the resources of the Agricultural Credit Corporation in keeping with the growing demand for agricultural credit. The Bill proposes to increase the limit on the amount which may be borrowed by the corporation and similarly to increase the amount of such borrowing which may be guaranteed by the Minister for Finance. It is also proposed to enable the corporation to raise moneys in foreign currencies and to enable the Minister for Finance to guarantee repayment of such moneys and indemnify the corporation against any foreign exchange risks involved.

The Agricultural Credit Act, 1969, fixed the limit on borrowing by the ACC at £25 million. Borrowing by the corporation at that time amounted to £11 million and it was thought that the new limit would suffice for four or five years ahead. The growth in the corporation's activities has however been greater than expected and the borrowing limit of £25 million has already been reached. The total amount of loans and hire purchase advances issued by the corporation has doubled during the past few years from £6.8 million in 1968-69 to an estimated £13.5 million in the current year, with total loans outstanding now exceeding £30 million.

It is expected that lending by the corporation will increase to £18 million in 1972-73 and that the expanding demand for credit will accelerate over the next few years, particularly with the prospect of entry to the European Economic Community. Farmers will require additional capital to increase their stocking rates and adapt their enterprises to benefit from the higher prices and improved marketing conditions available in the EEC. Additional credit will also be required by the agricultural processing industries, particularly the milk and pigmeat processing industries.

On the basis of this growing demand for credit, it is felt that the borrowing limit placed on the corporation should be increased to £70 million to enable them to meet their commitments over the next few years. Section 5 of the Bill provides for this new borrowing limit and section 6 provides for guarantees by the Minister for Finance up to £70 million.

I turn now to the question of foreign borrowing. The existing borrowing powers of the ACC have been interpreted as empowering the corporation to borrow in Irish currency only. Suitable opportunities for foreign borrowing may arise from time to time and the corporation should be in a position to avail of such opportunities. Loans negotiated through the World Bank are a case in point. Section 2 of the Bill enables the corporation to raise deposits in foreign currencies and section 3 extends their borrowing powers generally to include foreign borrowing. Section 4 enables the Minister for Finance to guarantee such borrowing. A conversion formula is included in each of these sections for calculating the equivalent in Irish currency of any foreign borrowing involved.

Section 7 deals with losses or gains arising on foreign borrowing as a result of changes in exchange rates: the Minister for Finance would meet any losses and receive the benefit of any gains.

I have given a summary of the objects of this Bill. I now wish to give a brief review of the work of the ACC. The corporation provide a wide range of loan facilities tailored to meet the diverse and expanding needs of Irish agriculture. Loans are available for the purchase of livestock, machinery and fertilisers, for land dainage and other land improvements, and for the erection of farm buildings and dwelling houses. Periods of repayment vary, ranging up to five years for livestock, 15 years for land drainage and other land improvements, 20 years for farm buildings and 35 years for dwelling houses.

The corporation also operate a budgeted loans scheme to help farmers to meet their seasonal financial needs; a written promise to repay is accepted as adequate security for loans up to £2,000 under this scheme. Loans to agricultural processing industries are becoming an important feature of the corporation's work and it is probable that the corporation will have an important role to play in emerging plans for the rationalisation of creameries and bacon factories.

The corporation's main interest rate is 8½ per cent but, as a concession to small farmers, a rate of 6½ per cent is payable by those whose total indebtedness to the corporation is not more than £400.

I already referred to the rapid expansion in the corporation's business in recent years. It is of interest to note that the bulk of this expansion has taken place without recourse to the Exchequer. During the past two years the corporation were able to finance their lending programme mainly from repayments on existing loans and investments by the public in their farm credit bonds and deposit accounts.

The scheme of deposits has been particularly successful. The minimum initial deposit is £100, and the rate of interest ranges from 5 per cent on deposits subject to seven days notice of withdrawal to 7½ per cent on deposits subject to 12 months notice. The total amount on deposit at the end of December, 1971, was £20m. compared with £11m. at December, 1970.

The ACC are pursuing a progressive and flexible lending policy geared to meet the credit needs of an expanding agricultural industry. Their deposits scheme offers a good return to the investing public and gives them an opportunity of contributing to the development of the Irish agricultural economy. This Bill will put the corporation in a position to increase their resources and thus sustain a rapidly expanding level of business. I recommend the Bill for the approval of the House.

The Parliamentary Secretary very properly included in his remarks a survey of the objects and activities of the Agricultural Credit Corporation. In this Bill he seeks greater borrowing power for the corporation and implicit in what he says is the extension of the corporation's activities. So far as this party is concerned we would, of course, support a Bill of this kind in principle.

The establishment of the ACC goes back to the first decade of this State and it is well to remember and record in this House that the idea of agricultural credit being provided by a State organisation was made possible by reason of the vision of the men who composed the first Government of the State. It was indeed part and parcel of their thinking and political philosophy that agricultural credit should be provided at a cheap rate of interest for working farmers. It is refreshing and pleasant that now in 1972 we can pay tribute to the work of the ACC through the years and to the help they have given agriculture and particularly the small farmers and those who need credit for development. It is also refreshing and a good thing to be able to say that we look forward now to the expansion of the work of the ACC in the immediate future. Like so many other things that were set up during the first decade of this State, the Agricultural Credit Corporation have endured and have been proved by the test of time. What is significant in the Parliamentary Secretary's speech is his indication that in the immediate future, by reason of Europe and the events now upon us, there will be need for an expansion of the activities of the corporation. I am glad to hear that. We are all aware that there will be a tremendous opportunity and also a tremendous challenge to our agricultural industry in the immediate future. On our entry into Europe we will be one of the primary producers of food in the Community. We will have an opportunity of almost unlimited expansion in relation to our agricultural industry. Therefore, credit must be available for every producer to enable him to get the optimum yield from his farm. To the extent that the corporation need to be empowered to finance themselves to provide that credit, this Bill is timely and has our support.

Correctly, the Parliamentary Secretary refers to the growing need for loans to agricultural processing industries. As everybody will appreciate, these industries are becoming more important all the time. Many of us can look forward in the immediate future not only to a very rapid and a significant expansion in agricultural products but also the expansion of the food processing industry. The groundwork is there for that expansion. We will have increasingly the raw materials for a variety of food processing plants. We will have a tremendous opportunity to lead significantly in the new Europe in this particular field, but we must rationalise and co-ordinate our efforts. Perhaps we must set down a new pattern. We may have to provide new finance for the adapting of existing plants and for equipping them for expansion. This is a field in which the corporation can play a very significant role. I am pleased to note from the Parliamentary Secretary's speech that this role for the corporation is envisaged.

There are other details of the work of the Agricultural Corporation that some of my colleagues will deal with but, generally speaking, I would say that this Bill is necessary and that there is need for an expansion of credit for our farmers, both small and big farmers. There is need for gearing the corporation to provide credit for the food processing industry. I wish the proposed legislation a speedy passage through the House.

On behalf of the Labour Party I assure the House that this Bill has our full support. The role of the Agricultural Credit Corporation is becoming more important and the extra capital proposed here will be needed in the agricultural transition facing this country between now and the end of the decade. This Bill is non-contentious. It is essential for the progressive development of Irish agriculture. By this measure the farmers, particularly the relatively small farmers, will be assured of the credit facilities which they need urgently if the industry is to meet the challenge of Europe and, above all, if it is to meet the challenge of the need for more intensive capital investment in the industry. I have pleasure in supporting the Bill.

I, too, welcome this Bill, the purpose of which is to increase the resources of the Agricultural Credit Corporation in keeping with the growing demand for agricultural credit facilities. It is worth noting that the Bill proposes to allow the corporation to borrow money from outside the State, which borrowing will be guaranteed by the Government. The 1969 Act fixed the limit on borrowing at £25 million but this Bill proposes that the limit be increased to £70 million. This increase indicates the extent to which our agricultural services are developed. It is worth noting, too, that the amount paid to borrowers increased from £6.8 million in 1968-69 to approximately £13.5 million in the current year. From this increase one will realise that substantial aid is being given by the corporation to the farming community.

As Deputies are aware, the purposes for which loans are made available are for the purchase of livestock, machinery and fertilisers, for land drainage and other land improvement and also for the erection of farm buildings and dwellings. Of course, money is lent to smallholders who are anxious to purchase other smallholdings near their premises so that they can have a unit that is viable. I do not think money could be allocated for a better purpose than the latter.

There is a real need now to empower the corporation to lend more money to farmers because much money is required to enable farmers to get the maximum benefit from the great potential of the industry. This money is needed also because of the increase in the value of land and also because of increasing cattle prices and increases in the cost of buildings.

All these increases mean that the ACC requires more money for lending to meet even the existing level of demand. It is very important that credit should be available to smallholders who have both the courage and the initiative to purchase land adjoining or close to their own holdings. If these smallholders have the courage to tackle their own land problems then the credit they require should be available for them. The ACC is the best organisation to provide this credit and that is one of the reasons why I support this Bill.

Priority in borrowing should be given to farmers who have a development programme prepared in consultation with the local agricultural committee and the local agricultural advisory officer. There should be a closer liaison between the ACC and the local agricultural advisory service. The ACC should not refuse a loan to a farmer who is commended by the local agricultural advisory officer. The corporation sometimes, not often, rely a little too much on the previous performance of the applicant for a loan from the point of view of the repayment of loans. An applicant for a loan should be judged on his present standing and on the manner in which he is carrying on his farming at the time of his application. Many farmers, big and small, run into difficulties and may on occasion find it difficult to repay loans. The ACC, however, should have a second look at an application before they refuse primarily on the ground that the applicant was difficult from the point of view of repayment of a previous loan. Farming today is being carried on on a very different basis and only a few farmers might find themselves in the position of not being able to repay loans.

I compliment the Minister and his Parliamentary Secretary on the introduction of this measure. I should like to take this opportunity also to pay tribute to the board and officials of the ACC for the manner in which they have carried out their duties down through the years, often under fairly onerous circumstances.

I should like to add my voice in commendation of the officers of the board and the chairman of the ACC for the manner in which they have developed the company over the years. This company was early in the field. It was established by the late Paddy Hogan, God rest his soul, and when I used to go in there, not so many years ago, the man who received me at the door was a county man of my own, Lord rest his soul. He was appointed by the late Paddy Hogan and I am glad to say that the man who now receives me is his son. That shows how long the ACC has been on the road. Their journey has not been wasted. If there was a brake then that brake came from this House. As I say, the ACC were early in the field in soliciting money from outside. For many years the position was that the money came from the Capital Budget. I am right in saying, I think, that the ACC were second to the ESB in soliciting money from outside. Certainly they were before the Industrial Credit Company. Indeed, they are the envy of the Industrial Credit Company now. This is no criticism of that body. It simply means that the ACC borrowed money in a most efficient and proper way and lent it at the correct rates and for the right term.

It has been stated here that there is a huge need for agricultural credit. Of course, there is. There is a situation which was not adverted to in the Bill. Mine may be the first voice to be raised in criticism but, in the words of the song, "Po-Po, the puppet, can do anything, when somebody else pulls the string". I have always been interested in the work of the ACC and the first item I have always examined in the Capital Budget was the amount of lending to be permitted to the ACC. Even after the ACC had begun to borrow from outside they were limited in the amount of lending they could do in each financial year.

There is nothing in this Bill, as I understand it, which changes that situation. About five years ago there was a deficit of £1.7 million in the amount being made available to the ACC in relation to the money they were to lend and there was no indication of how this deficit would be met. I questioned the then Minister for Finance, the present Taoiseach, and he said it would come from the repayment of loans. Eventually, on the Adjournment, I extracted a promise from him that, if there was a short-fall, the Exchequer would make good the deficiency. During the credit squeeze in 1965 or 1966—I forget the exact year—it was estimated that a figure of £6.7 million would be reached in loans. That gave me the information on which I was able to check and prove that there was a limit. I hope that, from now on, as we are now about to enter Europe, there will be no limit because there is no limit to the amount of money required by the farmer to go into Europe fully equipped to do the job. There is, of course, good lending and bad lending. The fact is that repayments have never been less than 99 per cent. They may have been slow on occasion but there have been very, very few bad debts. This excellent company have been to some extent retarded in their expansion over the years. They should now be released from any binding of any kind by this House or the Government and in respect of moneys which they can borrow they should be allowed to lend to the Irish farmer, and if the amount they can borrow falls short of what is required as we move towards Europe, it should be supplemented as before from capital. These are the things which are not in this Bill and which must be guaranteed by the Minister for Finance or by the Parliamentary Secretary when he is replying.

I note in one section of this Bill that the power to indemnify against loss in the transfer of a foreign currency to our money is taken by the Minister for Finance but the power is also taken to take gain. That is hardly fair. There could be a situation—and it is most unlikely—that there was a sudden devaluation of currency which would mean a crippling loss to the Agricultural Credit Corporation and which would have resulted presumably from a mistaken decision on the part of the board, and boards being human will make mistaken decisions. That would be a crisis situation where the Agricultural Credit Corporation fund had been depleted by accident. At the same time, over the year's trading there are many times when an astute executive of the ACC might be in a position to make a gain on borrowing abroad and, in so doing, he should be allowed to make that gain and to keep that money in the coffers of the ACC for lending to the Irish farmer.

Let us take the situation in relation to the eradication of brucellosis. The average compensation given to people is between £120 and £130. It is of no use at all to the dairy farmer who has lost the income from the milk produced by that cow which has gone to be slaughtered because it had brucellosis. The calf is lost as well, and that could mean as much as £40.

I do not want to widen the scope of this debate, but this is something that must be considered and I want it to be considered in the light of my own story. I had 37 cows down with brucellosis. They were very good Friesian cows which were being bred by my late father for 20 to 25 years before I was ever farming. The average compensation was between £120 and £130. Having lost these 37 cows, I had to decide how I could get an income from the farm as quickly as possible. At that time young cattle about 6½ cwt happened to be cheap and I decided that the best thing I could do was to buy them. I bought 46 and they cost £64 each, but within 12 months I got £124 each for them. You might think I did well. Of course I did extremely well, but I had to sell to find out. When I went out to buy stores to replace them, I paid £124 for them also.

That gives an idea of the amount of money that is required by farmers to stock their land. The fact that there has been an appreciation in the price of stores, beef and of calves does not mean that the farmer has the money in his pocket. We must get full production and the land must be stocked to the hilt, and every heifer that can be mated must be mated in order to create an upsurge in our stock. This is the area in which there will be a huge demand for credit.

We have not gone into the dairying areas yet in the eradication of this disease and the reason we have not is exactly the same as that in relation to tuberculosis eradication, that we are leaving them to the very last, because they are the worst areas for brucellosis. When we go in there every farmer in that area will be faced with the same dilemma with which I was faced. I was lucky in the way I overcame it, but let us face the fact that, with the appreciation in the cost of stores, a farmer who gets between £120 and £130 compensation for a beast that goes down with brucellosis will not be in a position to get any income within the next 12 months. He has to get money immediately to pay, perhaps, £160, £170 or £180 for a cow to replace the cow that went down. I want to impress upon the Minister for Finance and his colleague, the Minister for Agriculture, that there will not be enough of those cows to go around.

The terms of a loan with the Agricultural Credit Corporation are infinitely superior to those that can be got anywhere else. Any bank lending money to a farmer at the moment desires repayment in a maximum period of seven years. If this is a loan for capital goods such as a farm or for anything except, perhaps, a tractor which should be depreciated over a certain number of years, then that farmer is up against it. Not only is he confronted with the difficulty that seven years is too short a term to repay from farm income but he also has to contend with the constant depreciation in the value of money, which you might think would be running for him; indeed, if he died and his estate was assessed or if he sold out, it might be proved to be running for him on the basis of what he borrowed, but as it happens, the stock, the machinery and all he requires to run a farm is also costing more, and his money is tied up in the land or in one way or another is not available to him.

Even though he is working hard, even though he is doing a good job and making a reasonable profit, the only way he can operate is on the basis of increased agricultural credit. The only place he can get it over a long term for such things as farm buildings is the Agricultural Credit Corporation. A decent farm building needs to be repaid over a minimum period of 15 years, because the capital expenditure thereon is too great to ask any farmer to pay it over a shorter period.

An interesting commentary on how successful the Agricultural Credit Corporation have been in their lending appears in the Minister's speech, in which he says that no money is being provided from the Exchequer; when the Minister talks about £20 million being injected into the economy a few months ago and mentions a sum of £8 million in relation to the Agricultural Credit Corporation, it means that the ACC have borrowed successfully £8 million and have put up £8 million of the £20 million from their own resources. I suspected that from the day the Minister for Finance said it, and the Parliamentary Secretary in his speech has now verified it as true. That is a great commendation of the ACC, and I want to see no brake on this excellent machinery. I want to see acceleration. I want to see them expanding to the limit they can borrow and lending to that limit and more if necessary. As I said, when we reach the worst areas in relation to the eradication of brucellosis and as the cost of agricultural goods and animals increases in Common Market conditions, it will be seen that more and more will be required, and that in fact this Bill is absolutely necessary and, if anything, does not quite go far enough.

Mention has been made of lending money to creameries, bacon factories and to what the Americans call agri-business. This is necessary because this country is not sophisticated enough in regard to the services provided for our farmers. In the dairying areas of the south if you are lucky enough to be near one of the first class co-operatives or near its headquarters such as perhaps Mitchelstown or Dungarvan you may get a service that is not available to your neighbour 50 miles away. If you go right across the co-operative area of the south, and what is largely 50 per cent co-operative and 50 per cent business area of Leinster and the Midlands, it is quite clear that the amount of service which should be provided for farmers is not being provided. I say this merely in appreciation of the fact that there have to be millions of pounds properly pumped into the provision of a proper service for farmers.

We do not want any great losses or failures. Therefore, the Agricultural Credit Corporation, its executive side, the expertise in its executive side and the expansion of that is absolutely vital for this country and is something we have got to face up to in the most detailed way. I mentioned on a Supplementary Estimate some time ago the question of machinery partnerships and the fact that farmers are not availing of the facilities of the ACC in this regard. The old idea was you could not have a farmer in partnership with his neighbour owning something to make hay because when the sun shone each of them wanted to make hay in his own field and they inevitably fell out. Making hay is gone and the conservation of grass in silage is in. The cost of machinery for the conservation of silage is only bearable if you have something in the order of 150 acres to cut. You need to have the most efficient machinery and to have it in good order and 150 acres is quite a lot of silage on a mixed farm.

I am a member of a machinery partnership with my two neighbours. We have a simple partnership in a solicitor's office. I do not own a tractor, plough or silage harvester. I do not own any piece of machinery and neither do my neighbours. We have agreed on the basis of our average acreage of silage that we will take shares in the partnership, we will use Cork as a repository of funds and this will be a bank none of us deals with. We fine ourselves per acre for every acre we cut with this machinery for which we borrowed the money from the ACC, a sum which will not only pay the ACC's half yearly repayment but also have a figure for depreciation. After three or four years we can sell our machinery on the second-hand market and have enough money to go back to the ACC and say: "There is a deposit. Lend us money again." We always have new machinery and as well as doing our own three farms we now have two adjoining farmers who are not members of the partnership but who have agreed that they will come in and pay us the ordinary contractor's fee for doing their silage as well. This is something which is not being availed of. It is a service which the ACC are eager to provide. Farmers are inclined to be hesitant because of their old experience of binders, combine harvesters and hay-making machinery. It is even possible in the making of silage to arrange in November or December or before that that you will have one farmer's grass ready at an earlier stage than the others by earlier application of fertiliser or an earlier withdrawal of cattle. It is possible to give every farmer in his turn the first cutting. I hope this Bill will allow more of this to take place.

The ACC over the years have scored on the institution of area managers and area offices. They have one man who is a specialist in one particular type of lending. It does not matter what salary this man has because his costs are very much lower than the cost of the bank up the street. The bank is doing many things but this man is merely accepting deposits and lending money for agriculture. This man is somebody who for one salary can report on the spot on whether or not farmers should get loans. He can keep contact with the farmers in the area, he can collect deposits and he is not costing the ACC a lot of money. The ACC head office can mechanise to a greater degree, can departmentalise to a greater degree not only in areas but in various types of lending and so provide their specialists who know all about a particular field in which they are in rather than the position with the banks.

It is possible for the ACC to borrow money at higher rates of interest and to lend money out at lower rates of interest. I am aware that they are seeking less profits and, in fact, any profit remains in. The Minister for Finance is the only beneficiary. I hope he will not be a beneficiary, that all profits will remain in and that the expansion which should go on will go on indefinitely as we approach Europe.

I should like the Parliamentary Secretary, when replying, to tell us whether or not there is any hope in relation to the EEC, when we go in, of the difference between the economic lending rate which is charged by the ACC being reduced to a much smaller lending rate by any fund within the EEC. Would that apply to the whole country or would it apply to depressed areas? If you have, for instance, drainage in west Limerick and reseeding and development of the land afterwards, when a loan is required from the ACC would a farmer in that area, which is not the best land in Ireland, be entitled if he was borrowing at 8½ per cent to get any subsidy from EEC funds to reduce the interest rate to 2 per cent or 3 per cent? If there is such a hope I would like to know whether or not a farmer in Meath, who is on the best land in Ireland, could also get this help.

I am delighted to see an expansion of this semi-State company. We have, as usual, the extension from £25 million to £70 million and this is in keeping with the fall in the value of money and the expansion we hope to have. I disagree with the provision that any gain accruing from changes in the rate of exchange should go to the State. I think the proper thing would be that all gains should accrue to the benefit of the Agricultural Credit Corporation and if there was the occasional loss because of devaluation of currency or something like that it should be borne by the Minister for Finance. I agree with section 8 that it should be lawful for the corporation to make such alterations in the memorandum and articles of association as are necessary because there is no point in coming back to this House for such a thing. The memorandum and articles of association of a company are usually all-enveloping and allow the company to do anything and if perchance there are changes needed in the articles or the memorandum the board should have the power like any ordinary company to make those changes.

I should like to close by commending the chairman, the officers and the work of the Agricultural Credit Corporation over the years. The men who have done that work have contributed greatly to the prosperity of Ireland. I hope the men who are there now will have as much success, and, indeed, greater success and that the expansion in personnel that will occur because of this Bill will result in men just as good coming into the employment of the board, men who will be able to keep the good lending rate expanding day by day, the good repayment rate at its high level and let this company remain as the shining example for all other semi-State companies within the country.

I rise to commend the ACC and the Government for taking steps to make it possible to increase the amount which can be borrowed. This is a very sensible idea. I would query whether it is a good idea to limit it to £70 million in view of the fact that if Ireland goes into EEC, and I hope it will not, the amount which will be required, I fear, will be very much more than £70 million within a very short time.

I am sorry Deputy Donegan has left because I was going to comment that Deputy Paddy Burke often says: "Great things have happened in our time" and I was very glad to hear Deputy Donegan commending the communal use of farm machinery. No doubt in a few years time he will be talking about communal farms and we will be getting down to proper farming.

I was a little surprised, and perhaps the Parliamentary Secretary would comment on it when he is replying, on the use which is made by very wealthy people of the ACC. I was under the impression that the ACC in the main were intended to help those who really needed help in agriculture. If in addition to that they are used for the purpose of helping to improve agriculture by lending money at reasonable rates to the wealthier people so that they can make the best use of their farms that is policy and we know it all right, but when one meets a farmer who says that he required a very small sum, a couple of hundred pounds, or maybe up to a thousand pounds, and he applied to the ACC but was refused and no reason was given for the refusal it makes one wonder if the money available for lending in the corporation is being allocated in the proper way. Perhaps I meet more people who are not so happy with the activities of the ACC than Deputy Donegan does. Perhaps I meet people who are not as creditworthy in that they are not wealthy. It is pretty rough on the small farmer who has been finding it difficult to carry on and who, when he needs some money and applies for it to the only body in a position to lend it to him, is told that he is not eligible. The very least he should be told is that he is not entitled to get it and given the reasons.

I am not criticising the ACC as such because as a business firm they seem to have done extremely well. There are very few such organisations handling big money in this country that can say that over a period of years they have had no major losses. While this is a great credit to them it does, to me, mean that they are conservative in their outlook. They do not lose any money because they do not lend it to people who, they believe, are not in a position to refund it. Therefore, they take no chances. The ACC should take chances, particularly with smaller amounts, because a few hundred pounds to a man who has not got the necessary money at a particular time may mean a lot. I think this House would forgive them if they had an odd loss and if the record showed that when people really needed money they could get it from the ACC. A few years ago it was the complaint that the only way to get money from the ACC was to prove you did not need it. That is not so to the same extent now but people come to me and complain that they have applied and have simply got a letter of rejection. If I ask for the case to be reconsidered I get a very polite note saying that following my representations the case has been reconsidered but it has not been found possible to make a loan, a loan of £200 or £300 to some poor devil who felt he could get out of the mud if he got it. That attitude is wrong. I would ask the ACC not to be so conservative and to consider the fellow at the bottom of the pile because I do not think the ACC was ever intended to supply money to the bigger people, particularly if there are two or three of them together, who can have 150 acres of silage and need the necessary money so that they do not have to sell any of their stock for the purpose of buying it. Maybe I am wrong but that is my view.

Some years ago I was instrumental in getting a certain organisation to deposit money with the ACC on a six months demand. During that period they required that money in a hurry. It is normal procedure in most countries and indeed with a number of organisations in this country that in circumstances like that the money can be refunded to the lender on a fine basis, they lose a certain amount of interest. The ACC said: "No. You will not get it until the end of the period which is six months." I would hate to think that the fact that the organisation that had deposited the money was a trade union and that the money was required for the purpose of paying strike pay had anything to do with the decision but at the back of my mind I have an idea that it had. It had this effect: never again will that organisation, as far as I know, be prepared to deposit money with the ACC. They made a mistake there. Again it is the conservative attitude. There should be some way of relaxing the regulations. The amount would not break the corporation. It would have meant that when funds were available further deposits would be made. I hope this was simply a temporary lapse, that it is not the policy of the ACC to do this kind of thing.

With regard to borrowing foreign currency, I do not agree with the suggestion that if the State is to carry the losses the State should not carry the gains. Let us be fair. I believe the State should. A few years ago an astute Minister for Finance succeeded in making a fairly substantial profit through manipulating money borrowed abroad. I grant you he got very little thanks for it. He was rooted out pretty quickly afterwards. He lost his job in the Government.

(Cavan): They are shaking hands with him now.

I have no objection to people shaking hands. If we all remember old sores for a long time we will make no progress. I would love if we were in a position to shake hands with certain people at the other end of this country and settle some of the differences that exist at present. There is no harm in shaking hands. I believe, however, that that Minister was a very good Minister. He succeeded in making a considerable amount of money and he did a good job generally in this House, but I wonder what is the situation in regard to it. Although the Minister I referred to made a profit for the State, it was on the cards that the opposite could have been the case. If we are to talk about profits and losses in foreign currencies, do we not involve ourselves in the danger that somebody might be inclined to gamble? I do not think the present Minister would do that but no matter what happens it should be the Minister for Finance who would carry the responsibility because otherwise there is always a danger.

There is little more I wish to say on the Bill which has been fairly well flogged by the experts and I can be regarded only as a hurler on the ditch. However, I should like to comment on what Deputy Donegan said in regard to the amount, £20 million. I do not believe it exists at all. He spoke about a figure of £8 million found out of their own resources by the ACC, the rest being a paper transaction. No effect has been shown for that £20 million. If this country is unfortunate enough to decide to go into the EEC, I am afraid the amount of money being given here and regarded as being the amount needed for borrowing for agricultural purposes for a number of years, is far too small. In EEC conditions, particularly if one remembers the differences in costs between there and here, I am afraid some Minister will be coming back within a few years and asking for permission to borrow because they have not enough. A few months ago the farming organisations were talking in terms of £900 million which they thought was required to gear Irish agriculture to Common Market conditions. Here we say we are allowed to borrow up to £70 million. I honestly think this is not enough, that we need provision for further borrowing.

The fact that all the money which has been lent has been repaid shows that the ACC are an organisation which does not take chances. To my mind, one of their primary purposes should be to take chances on behalf of Irish agriculture and by Irish agriculture I mean those at the bottom of the pile, the small farmers whom the ACC were set up to help rather than the wealthier types who can obtain money from other sources.

I welcome the Bill which is refreshing in that it enables the ACC, a major force in our economy, to continue to be an even greater force in our agricultural expansion. It enables the ACC to have better resources to meet growing demands. Deputy Tully advocated a strange policy. I think he would be one of the first Deputies to criticise the Department concerned or the Government for allowing a situation to develop in which finance would be wasted.

It is to the credit of the ACC that they have transacted their business in the way they have done, and as a farmer I believe the worst service that could be done to any small farmer would be to load him with financial commitments that he could not carry. That is not to say that there could not be instances given or plans arranged for farmers by agricultural advisers to meet the requirements of the ACC. It is in this range of farming that credit is greatly needed. For years many of our farmers have fought shy of credit for many reasons, some historical. This is disappearing and as it disappears all of us want to see a massive injection of finance, a new approach to this whole question through which our farmers can see advantage in investing money in their farms. They can be enabled to do it by help from the ACC which have been providing not only the necessary business organisation but the expertise to put the finances available to them into the more remunerative areas of farming. The ACC have also been capable of determining the type of action and the line of approach each farmer should take. Almost every field has been covered.

There are just two points I should like to make in particular. The first is in relation to the stocking rate in this country. We have seen a fixed growth in the stocking rate, better use of fertilisers, more reclamation of land, improved advisory services, all contributing towards growth in agriculture, but now as we look into Europe and as we see for the first time great coming opportunities for our farmers not tied as deliberately as in the past to the British market, which was often very much to our disadvantage, we must be able to get credit directed to our farmers so that they can obtain the maximum benefits from new markets and so that the country as a whole can consequently gain immensely and immeasurably.

This will take even greater confidence from this House and it will need greater confidence from our farmers. It will call for a wider approach in some instances on the part of the ACC. I can see instances at the moment of small farmers, particularly, selling young breeding stock because of the temptation offered by increased prices. I should like to think it would be possible for that kind of small farmer to hold on to those breeding animals which will not only push up numbers in the country but will enable the individual farmer to build up his dairy herd, if he is in dairying. To do that he needs capital now to supplant the income that would be available to him if he were to sell his young animals.

We have the case where land becomes available, small parcels of land which would enable small farms to become viable. Small farmers are not now capable of purchasing these patches of land because they are unable to compete with larger farmers. The ACC should be empowered to give loan facilities to this kind of farmer at an even lower rate than is available at the moment. I wonder whether the ACC would consider the case of a group of small farmers who wish to purchase a fairly large-sized farm and either develop it collectively or add it proportionately to their own farms? Could they encourage this kind of investment to build up the farming range which is capable of becoming viable and which would strengthen the rural scene?

Deputy Donegan referred to the machinery syndicate. The Deputy said machinery can be utilised over a long period. Where the need did not exist for a machine on a particular farm on a particular day the overall costs of production can be reduced by farmers involving themselves in getting credit facilities over as long a term as possible and ensuring that the machine is operated economically. This is of advantage to the group. This is to be welcomed. It would be encouraging if arrangements could be made for the implementation of such a scheme.

Referring earlier to the purchase of land, I neglected to mention the ceiling of £6,000 which operates at present. Land prices have soared in recent times and the only kind of credit which is worth while to the smaller farmers for the purchase of land is credit over a long term. Very often a farmer may find himself unable to purchase land while the £6,000 ceiling operates. I know that that ceiling has some advantages. It attempts to direct to the right areas the limited financial resources which have been mentioned already. At the same time, some flexibility might enable farmers reach the level of land prices which are sometimes necessary. It appears that in the future prices will be even higher.

The question of the ACC being involved in granting credit facilities to the food processing and meat processing plants all over the country has arisen. These plants are mostly allied to agricultural production. The desirability of rationalisation demonstrates the need for credit in this area. In my short experience in public life, I have watched how the corporation operate in this particular field. Their schemes and their methods of investigation, and the thoroughness with which they go about their job, are, in fact, examples to the business community as a whole and particularly to the semi-State bodies.

There is nothing else I wish to add except to say that agriculture today and in the future needs more and more capital. I see the ACC as the body capable of supervising and maintaining the momentum and drive to ensure that our farmers reap the vast benefits from the credit facilities available to them. This House welcomes this Bill. We hope that in the years to come many other similar Bills will come before us, phased intelligently and laying down the demarcation line in progressive development in agriculture.

The necessity for this Bill arose because of the increased demand for credit from the agricultural sector in this country. We, on this side of the House, welcome this Bill because it provides scope to the lending agency, the ACC, to borrow. It also provides that additional sums will be guaranteed by the Minister for Finance. In the past 12 months the deposits of the corporation have doubled. That indicates the confidence in the corporation and the willingness of the lending public—the business people, professional people, and people who have money to put into lucrative investments. It indicates their confidence in this lending agency.

What is most important in the ACC and what, in fact, has given rise to this expansion in credit which is so obvious is that they have established an administrative structure. They have gone throughout the country and established area offices with area officers. They have decentralised their administrative structure and set up a chain of command throughout the country. This has established communication with the people. They have come closer to the farming public and become more intimate with their requirements, and because of that there is possibly a more prompt and expeditious approach to requirements. The waiting period for a loan has been reduced because the administrative problems have been dealt with more quickly.

I do not know about the activities of the ACC outside the country. I know of a commercial bank which set up an office in England and in a short time a sum of £1 million was invested in the bank. If we established some contacts in that country I am sure our emigrants would invest in the corporation. I would ask the Parliamentary Secretary to explore this possibility and to permit officers of the ACC to go to England to investigate this matter. When we enter the EEC we will need finance to meet the demands of the farmers who will be forced to adjust to more modern methods in agriculture. I do not believe that we lag behind any of the EEC countries. In fact, my information is that in many sectors we are ahead of them. It is vital that we have more confidence in our ability to survive and succeed in the EEC.

The priorities of the ACC are the replacement of livestock, the purchase of machinery and fertilisers and drainage of land. It should be realised that the less developed areas of the country should get a considerable share of the capital available to the ACC and I hope that adjustments can be made to channel a greater share of the money invested in the corporation into those areas. I know of areas where the farms are small and the quality of the land is comparatively poor but, because of the combined activities of the farming organisationts, the Department of Agriculture and Fisheries, the Land Commission and the ACC, the farmers have succeeded in obtaining a good standard of living. I know of the achievements that have been made in the pilot areas. They have pointed out the way in which we should go in the future.

I should like to refer to a disease that is ravaging the herds in the dairying areas in the western counties, namely, brucellosis. In the well-known dairying areas the prices of livestock have doubled in the past three months; the price of in-calf heifers has increased from £100 to more than £200. I hope that the ACC will help those people who have low valuations and that they will lend them money at low interest rates. It is necessary that the farmers be helped if we want to keep up production.

The farm credit bonds and the deposit accounts of the ACC have been so sound that it has been found possible to give loans in the last few years from the repayments that have been received. We must give credit to those who administer the affairs of the corporation. We cannot speak too highly of the economic experts in that organisation and of the men in the field. I am proud that the chairman and secretary, both of whom have done wonderful work, are from County Clare. They deserve credit for their achievements.

I appeal to people with money to invest it in this country. We will achieve real progress if we have a developed and sound agricultural industry. When the farmers have increased profits the money is circulated throughout the rest of the community. However, it should be realised that the ACC must have money if they wish to finance worthwhile projects. I am sure that the EEC will realise that the corporation are the body best equipped to deal with loans to the agricultural sector. I am sure that the Minister for Foreign Affairs and other have made known to people in Brussels that the ACC are the agency best equipped to deal with this matter.

The number of 40,000 borrowers gives the lie to those who think that few people benefit from the activities of the ACC. That figure indicates that the activities of the corporation extend to every county. However, more people could avail of the services of the ACC. We have been rather shy in accepting credit—that fear probably goes back to the days of the lending offices and fear of eviction. I do not know of any case where the corporation have brought a person to court. People should not be worried about applying for loans from the ACC. In a way the ACC have a socio-economic outlook with regard to the long-term policies of farmers.

It might be asked if we should always accept the advice of a particular group when money is given out. The corporation would be well advised to reflect on the fact that the number who avail of advice from qualified graduates in agriculture is comparatively low. There are others who have possibly greater contact with farmers. They are agricultural advisers of various grades who allocate grants for farm buildings and so on in land project offices. They have greater contact with farmers and their advice should be sought before loans are issued.

We welcome this Bill to increase the power of the Agricultural Credit Corporation to issue credit from £25 to £70 million and we know that the increased credit facilities will be very productive.

I want to join the other speakers in welcoming this Bill, the primary purpose of which is to increase the resources of the Agricultural Credit Corporation in keeping with the growing demand for agricultural credit. I notice from the Parliamentary Secretary's speech that it is expected that lending by the corporation will increase to £80 million in 1972-73 and that the expanding demand for credit will accelerate over the next two years.

Now that we are about to enter the EEC it is most important that farmers should be fully equipped to obtain the maximum benefits from that entry. Ready cash is required by farmers to increase their lands and to purchase machinery and livestock. It is important that they should make full use of the services provided by the ACC. Some years ago it was almost impossible to get farmers, in particular small farmers, to borrow money but I am glad to say that that position has changed. Some years ago I attended agricultural classes where the agricultural instructors pleaded with farmers to borrow from the Agricultural Credit Corporation in order to increase their output from the land. This was something that they were afraid to do. The small farmer always tried to pay his way. He resented anybody thinking he had to borrow from any institution in order to improve his farm. I am glad that this idea has been dissipated. At present the small farmer can go to the Agricultural Credit Corporation and borrow money to enable him to build up his herd, improve his farm buildings and, if land becomes available in his locality, to purchase it in order to enlarge his holding. This is very important and is something that I welcome because in many cases where small holdings come on the market they are snapped up by big farmers. Without credit facilities the small farmer is unable to compete for land. The small farmer has always been the backbone of the nation and should be given every opportunity to expand.

The pilot areas selected in the western counties have proved what can be achieved on a small holding when capital is available, where the advisory service is available and where the farmer is willing to co-operate with the agricultural adviser and work to a given plan. Dr. John Scully, in a recent report on western farming, has stated that there are almost two million acres in the west of Ireland which are not being utilised. Perhaps if sufficient credit had been available in the past, the picture might be different but even at this late stage I hope it will be possible for the Agricultural Credit Corporation to contribute towards the reclamation of some of this land.

The Agricultural Credit Corporation have done a magnificent job for the farmers and I want to congratulate the corporation, the board of directors, the field staff and everybody else connected with the corporation on the magnificent job they have done for Irish farmers. They are contributing to the expansion of the agricultural community. It is vital to the economy that the agricultural sector be improved. I wish the Agricultural Credit Corporation every success and I hope they will be able to keep up the good work.

In conjunction with other Deputies, I welcome the Bill. It would appear that there is a provision of £70 million as against £25 million but when we consider the cost of materials and of livestock, there will not be very much left over. At the moment a great portion of land is not properly developed. Along the western seaboard there is a great deal of land that is not in full production. That is due to the fact that the farmers are starved of capital. That applies to practically every country.

Bord Fáilte represent the second biggest industry in the country, tourism, and the Agricultural Credit Corporation cater for the largest industry. Bord Fáilte have a scheme whereby they pay the rate of interest on borrowings from the bank. I see in the Parliamentary Secretary's opening speech that the rate of interest payable by a small farmer should be 6½ per cent. That rate of interest to a man who is starting from rock bottom leaves him in the position that he will be struggling for the rest of his life. The amount of stock that some small farmers have is negligible. To enable small farmers to derive the profits anticipated from EEC membership, they should be put in a position to build up their stocks. For this they would require interest-free loans. That is the only method by which they can come into full production.

I know hoteliers who spend hundreds of thousands of pounds in improving their hotels in order to be able to meet modern demands. If Bord Fáilte can devise a scheme to provide them with interest-free loans, the Agricultural Credit Corporation should be able to provide a scheme whereby a certain sum of money would be available interest-free to the farmers. This should be done in the case of farmers under £45 valuation. In order to enable a small farmer to increase his stock, to purchase up-to-date machinery and the necessary manure and lime, he will require about £1,000. The interest on that at 6½ per cent is £65. It is not a practical proposition.

I think I am right in saying that most other countries provide loans to farmers at much lower rates of interest than have obtained here. If the Agricultural Credit Corporation are not themselves in a position to provide the necessary finances, they could make arrangements with finance houses and others who are only too willing to lend money to farmers provided a satisfactory scheme was worked out with the assistance of the agricultural officer to ensure that the investment would be profitable and that the return would be commensurate with capital outlay.

Most people in my constituency who seek loans are already up to their necks in debt and have been struggling for years to pay a high rate of interest to the banks. Invariably they are seeking to borrow more in order to pay off the bank overdraft and to try to purchase a little stock and to improve their position.

The corporation should advise farmers in regard to the desirability and feasibility of co-operation in the use of farm machinery. Deputy Donegan could probably buy and sell me. He is quite a wealthy man. He is running a co-operative scheme with his next door neighbour. I think it is an excellent idea to do so because it is quite impossible, with the cost of machinery today, for anybody, unless he is in a fairly strong way of farming, to buy machinery. The only tractor you can buy at the moment under £1,000 is the Zetor and that, unfortunately, is manufactured on the other side of the Iron Curtain. The prices of all other tractors have gone up to absolutely astronomical heights and the same thing applies to all farm machinery, so that what agriculture really wants is a tremendous inflow of capital, but there is no use in giving capital on the terms suggested in the Bill, or not so much suggested in the Bill as suggested in the Parliamentary Secretary's speech.

There is a small paragraph on page 3 which says that the corporation's main interest rate is 8½ per cent. Even big farmers who are trying to build themselves up find it hard to pay 8½ per cent. I do not think it is economical or profitable to do so because they are national producers and the entire nation is dependent on agricultural production such as it is to service the money paid for the import of raw materials and so on. As a concession to small farmers, a rate of 6½ per cent is payable by those whose total indebtedness to the corporation is not more than £400. That is mentioned by the Parliamentary Secretary as if it were some great innovation, some great benefit being conferred on the small farmers. It is not, of course; a rate of 6½ per cent is not a low rate of interest.

Another point I want to make refers to the interminable delays in getting a loan granted. Farmers are not people who think a long way ahead, particularly small farmers, and if they are looking for a loan, and I know many cases of people who have applied for a loan, there seems to be interminable delay before it comes through. I suppose that as a finance corporation, the Agricultural Credit Corporation has to ensure that it is lending money to a person who is creditworthy, but if a farmer decides that he wants to buy, and he may be in the position of having established exactly what he wants and where he can buy it, he is held up pending the coming through of the loan.

The same applies to the purchase of farms for which, I understand, the Agricultural Credit Corporation provide money. If a farmer decides to buy a farm, there is, again, this interminable delay, even though it is communicated to the corporation that he has to have the money or a guarantee of the money by a certain date and that otherwise he cannot bid. It simply means that the deal is off and he is not in business. I would direct the attention of the corporation to the fact that there is a human or social side to it. Most of those people have not got a bean to their name and they are entirely dependent on securing services from the Agricultural Credit Corporation and I would hope that they would bear these facts in mind. It is we, the elected representatives, who living in rural Ireland know this because we have people constantly coming to us with these problems.

I have been somewhat critical of the Agricultural Credit Corporation but I want to say that they have always treated me with the greatest courtesy. I never tried to borrow any money from them yet and, perhaps, they would not give it to me, if I did try.

I welcome this Bill and would like to pay my tribute to the chairman of the Agricultural Credit Corporation and his staff. The work they are engaged in is worthy of praise. Agriculture is our main industry and it is only right and proper that funds be made available to this industry for expansion, particularly in view of our forthcoming entry to the EEC.

There is one aspect I should like to mention. I do not know what proportion of the investment in the Agricultural Credit Corporation comes from the farming community, but I feel that a further campaign should be launched, with particular emphasis on investment by the farmer in the corporation, because the corporation should have special attractions for investment by the farmer. He knows full well that the money he invests will be utilised in his own industry and, perhaps, the people in the Agricultural Credit Corporation might devise some new means of encouraging the farming community to invest more of their savings in it.

Last week we had a motion by Deputy Tully on the workings of the Land Commission and we had quite a bit of discussion on the Land Commission. One of the criticisms of the Land Commission, with which most people agree, is that it is very cumbersome and very slow to acquire land for allotment, that the whole machine is very slow and tiresome, that it does not work very well. I wonder if some working arrangement or form of co-operation could be devised between the Land Commission and the Agricultural Credit Corporation whereby corporation funds could be utilised for the purchase of land when it comes up for sale. We are all very tired of the system by which the Land Commission acquire land mainly through land bonds. This is criticised all over as being an unfair way of purchasing land, that it is unfair to the seller and does not work very well. I feel sure that some working arrangement could be devised whereby the Agricultural Credit Corporation could come into this scheme of land purchase, thereby making it more workable and much quicker for the benefit of everyone concerned and particularly those who are in need of land, people who have non-viable holdings and need more land.

I know that the Agricultural Credit Corporation are involved in this in their own way, but perhaps the corporation and the Minister for Lands, with the Minister for Finance, might be able to devise a better scheme. The Minister for Lands is anxious to do a lot of reconstructing in the Land Commission and this is one means by which he could get on with what he has in mind. I would ask the Minister concerned to look into this and see if the funds which are now available and which will be available in the future with further expansion of Agricultural Credit Corporation funds could be utilised for land purchase for the benefit of the agricultural community.

(Cavan): Apart from the foreign currency sections of this Bill, the principal section as far as I am concerned is section 6, which extends the borrowing powers or the lending powers of the ACC from £25 million to £70 million, or at least authorise the Minister for Finance to give guarantees up to £70 million instead of £25 million as at present. I welcome that provision because I think it will enable the ACC to extend its activities and to have regard to inflation, the increased cost of land and the increased cost of machinery and manures and so on which it enables farmers to purchase. I would like to say that from my experience of the ACC it is doing a good job and doing it efficiently within the powers available to it at the moment and within its policy, about which I shall say a few words before I conclude.

I was interested to note from the Parliamentary Secretary's speech that the activities of the ACC are being financed out of repayment of loans and by borrowing of money from the people of the country in the form of credit bonds and deposit accounts. I am glad to hear that. I think it really means in effect that with the tremendous rise in the amount it is lending the ACC is financing most of its activities from borrowing. It is an ill wind that does not do somebody good. The stupid bank strike of a couple of years ago has probably done a good deal to channel money into the accounts of ACC. The bank strike was stupid——

If the Deputy will allow me, it was not a strike; it was a bank closure. That is an important distinction.

(Cavan): It may be to a professor but from the ordinary countryman's point of view I think the net result is the same.

The banks were closed.

(Cavan): At any rate if the lock-out, closure or suspension of business, strike or whatever it was directed the attention of our farmers to the fact that they had money lying in the banks at a miserable rate of interest and instead they channelled it into institutions like the ACC, it did a good day's work.

As regards borrowing, I did not know that the ACC adhered rigidly to its withdrawal notice provision. If that is so it should change its policy in that respect. Personally, I did not know that was the practice and I had advised people from time to time to put money into the ACC. I was asked by somebody the other day when he could draw out his money and I said: "Any time you like." I hope he does not want to draw it out in a hurry, at least until the ACC change their policy. As Deputy Tully said, there are banks in the country with which people became familiar during the bank lock-out, suspension of business or closure and they certainly gave higher rates of interest for longer notice but if somebody wanted to withdraw at short notice he could do so and get a lower rate of interest. That is good business and a reasonable approach. People will not want to withdraw money unless some unforeseen circumstances crop up and if they do want to withdraw they should be allowed to do so at a reduced rate of interest. It is unlikely there would be a run on the ACC which would seriously hinder their activities.

There has been controversy as to whether the policy of ACC should be to gamble a little or take risks. Deputy Tully thought they should; Deputy Smith seemed to think they should operate on a sort of gilt-edged security basis. As I see it the ACC was created by statute in 1927 to provide a service, an agency for lending money to farmers, which existing lending agencies were unlikely to provide. That is a fair description of what the corporation was founded to do. I do not believe it should take unnecessary chances but neither do I believe it should refuse to lend on other than gilt-edged security. In my opinion and experience the corporation have relaxed and are a little more flexible than they were. I think they are doing a good job. I can only speak from my experience in my own constituency —I shall come to that again. I should think the fact that they have no bad debts and that they have 100 per cent repayments is perhaps evidence that they are not as flexible as they should be. Therefore, I recommend that they should be more flexible. I do not want them to lend even small sums to people borrowing for other than agricultural purposes but if there is a reasonable doubt as to whether a man will make good or not if put in funds, I think the corporation should err on the side of giving such a man a chance and allowing him credit.

I am also pleased to note that borrowing from the ACC has jumped from £6.8 million in 1968-69 to an estimated £18 million in 1972-73. That is a healthy sign. The fact that they have no bad debts is evidence that they are lending to the safest borrower and the most conservative community, the agricultural community, in the country. The difficulty over the years was to prevail on the farmers to avail of credit, go into debt and build up their farms. Up to not very long ago a farmer was not prepared to take a chance of putting a millstone around his neck or burden himself with debt. That was one of the difficulties in getting agriculture into action. I am very pleased that one section of the agricultural community now seems to be providing the money to lend because it is mostly farmers who are investing in the ACC and other farmers are availing of the credit facilities provided. That is as it should be. I cannot help thinking that the advice and propaganda of the farming organisations, notably the NFA, Macra na Feirme and the Irish Creamery Milk Suppliers Association, and their encouragement of farmers to expand and to borrow money are largely responsible for the fact that so many farmers appear to be availing of the facilities.

It is a good point but it is a pity that there is nobody in Fianna Fáil like the Minister for Posts and Telegraphs to listen to it.

(Cavan): The Minister for Posts and Telegraphs has a very different kettle of fish for us.

When this Bill was introduced, there was nobody on the Labour benches.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

On a point of order——

(Interruptions.)

Deputy Fitzpatrick on the Bill.

(Cavan): On a point of order, while the House was in recess because of the Government party not being here, the Parliamentary Secretary gave notice to the effect that he would become out of order if there was a quorum. I had dealt with the borrowing and lending activities of the corporation. It was suggested here today that lending rates should be reduced and that borrowing rates should be increased. I appreciate that that seems a contradiction in terms but, nevertheless, it would be a good day's work if the Government decided to subsidise interest rates to the farming community because in that way they would be encouraging further the agricultural community to avail of the facilities provided by the corporation.

Therefore, I would recommend that, as the corporation are costing the Exchequer nothing, the Government should consider seriously subsidising rates in certain circumstances. I know this could not be done in individual cases, that it would have to be done in classes. The rate of interest at 8½ per cent is rather high. Of course, I appreciate that the corporation must pay a reasonable rate in order to attract money in but if possible the Government should subsidise the interest rate charged.

This brings me to the point that I want to make in so far as my own constituency is concerned. I do not think that in recent times the Agricultural Credit Corporation have realised the extent of inflation or the dramatic increase in the price of land. At present the corporation have a policy whereby they will give the full cost of a farm to a farmer who intends to buy it for the purpose of bringing his existing holding up to an economic level. That is a sound policy. As has been said here recently, the Land Commission are slow in their operations. This is not through any fault of their own but it causes frustration among people who are waiting for land. Small progressive farmers with holdings of 30 or 35 acres should be encouraged in every way to purchase another 25 acres. Up to recently the Agricultural Credit Corporation were doing that but they have a regulation whereby they will not advance any more than £6,000. That figure is out of date now.

It would not buy two and a half acres in the Common Market.

(Cavan): I come from a constituency where land, perhaps, fetches less than land in the average constituency but even at present £6,000 is in many cases insufficient to buy 30 or 40 acres, which amount would be required to bring a smallholder's farm up to economic level. I encountered the case of a man the other day who is, admittedly, one of the most progressive farmers in his area. He lives in what would be regarded as the best part of Cavan, the region adjoining Meath. His land is grossly overstocked and he is taking grass. There was a farm for sale within a few miles of him which he wished to purchase, but in order to be able to do so he would either have to sell his stock completely or borrow more than £6,000. Because of the policy of the corporation in confining their loans to £6,000, so far as I know this man was deprived of the opportunity of purchasing the farm and it is not likely that within the next ten or 20 years there will be any land available to the Land Commission in that vicinity.

I urge strongly that the corporation should now change this policy of confining their loans. I am surprised that in the Parliamentary Secretary's brief there was no mention of land purchase in connection with the activities of the corporation. In my constituency their most important activity would be the advancing of money to farmers who wish to bring their smallholdings up to economic standards. I hope I will be forgiven if I have harped on that particular aspect and I urge the policy-making body of the corporation to make a revision there. The Agricultural Credit Corporation are a worthwhile semi-State body. It is refreshing to be able to discuss a semi-State body in these terms. Many others are not as successful or are not doing as good a job as the corporation are.

The Minister for Posts and Telegraphs will not be pleased.

(Cavan): His is not a semi-State body but a corporation sole. I was not even thinking of him. I hope the activities of the Agricultural Credit Corporation will continue and that the corporation will get sufficient money to finance its activities. My advice is to relax the rule —which, according to Deputy Tully, is inflexible—about the withdrawal notice. If that is done I think the ACC will get more money and, if the Government will subsidise the corporation, then the corporation will be able to give more by way of interest to lenders and charge less to borrowers.

The £6,000 limit must go. It was the policy of the corporation to lend only to a farmer who was buying a farm in his own immediate vicinity. In the days of horses and carts that was a sound policy. Now, with tractors and motor cars, it is not so important that the two farms should be adjacent. A few miles does not matter.

The Land Commission do not accept that.

(Cavan): One of the farms could be used as a dairy farm and the other for dry stock.

I shall be brief. This is one of the most important pieces of legislation introduced in this House in the recent past. I say that remembering that on 1st January, 1973, this country will accede to the full terms of the Treaties of Rome and Paris. This Bill is designed to give more aid to our farming community. I represent an urban area but that should not preclude me from contributing to a debate on that which is regarded as our largest single industry. Being an urban dweller does not preclude me talking about the position of my brethren in the country. The most significant thing about this Bill is the fact that, when it was introduced by the Parliamentary Secretary to the Minister for Finance, there was no Labour Deputy present in the House.

Sir, in view of the fact that the Parliamentary Secretary is making one of his rare appearances in the House, I think we should have a House for him.

Notice taken that 20 Members were not present; House counted and 20 Members being present.

I was making the point that the Labour Party were not present to welcome this Bill when it was introduced.

Sir, I was having my tea. It was my responsibility. For half an hour there was nobody but the Minister for Posts and Telegraphs on the Government benches; there was no other Fianna Fáil Deputy except him.

This is a reflection cast by a party which is urban-based in the main. It is quite understandable to me why the Labour Party does not take an interest in agriculture. It reflects the lack of support for the Labour Party in the country when they do not think it worth their while to be here when an important Bill like this is introduced. This is a Bill which goes to the very foundation of agriculture and it is no credit to the Labour Party that the Members of that party were not present when the Bill was introduced.

We missed five minutes of it. I will admit that.

Their absence is a reflection of their point of view in relation to agriculture generally.

The Parliamentary Secretary is making very heavy weather. He is having a tough time.

As I say, I welcome the Bill. It is vitally important in relation to our entry into the European Economic Community.

The general agreement on this Bill is an indication of its importance. We have always maintained that agriculture was starved for credit. Had a measure like this been introduced five years ago the benefits would be quite evident now. When money is injected into agriculture the farmers automatically produce more; increased production on the land means increased employment. If, in the past, some of the money invested in tourism and other industries had been invested in agriculture we would not today have the appalling high rate of unemployment that we have at the moment because, as a result of increased production on the land, there would be increased employment in the processing, the transport and the marketing of that agricultural produce. Fianna Fáil failed to realise that agriculture was our major industry and the sheet anchor of our economy and, by failing to make available sufficient credit to enable farmers to get the maximum potential from the land, the Government killed the goose that laid the golden egg.

We are glad that this extra credit will now be available for farmers. On the Minister's Estimate I was critical of the Agricultural Credit Corporation. I am still a little disappointed because of loans refused to some applicants on whose behalf I made unsuccessful representations. I thought that they were creditworthy and that the loans should be forthcoming. Since then I have had discussions with the area officers in Cork city and I have heard the other side of the story.

It is necessary to have in this House an all-party committee that would have discussions and consultations with semi-State bodies, that would become conversant with the day-to-day workings of these semi-State bodies. We are not in a position to tell our constituents what the position is in relation to these bodies. Having had the opportunity of holding discussions with the area officers in Cork, the criticism I would have of the ACC is that, like some other State bodies, they seem to work behind closed doors and it is very difficult to get the information that is so necessary.

I do not want to repeat what has already been said here over the last two hours. Some very good points have been made and I should like to add my voice to that of a number of Deputies who referred to the smallholder who is anxious to enlarge his farm. Every assistance possible should be made available to him. The only other way in which he can reach a viable holding if sufficient credit is not available is through the Land Commission. It is a few years since I started farming and I know from my experience in developing a small farm that it would be of greater assistance to the farming community if cheap credit were made available to them rather than the grants that are available at the present time. This is a personal view, but where there is, in particular, a dairy farmer who cannot reach the maximum herd because sufficient credit is not available to him, if the dairy farmer who is supplying milk to the creamery enters into a contract with the creamery to repay the instalments to the ACC, this should be security enough to enable him to obtain an advance in order to support himself and his wife and family.

In every parish in rural Ireland today you have, say, two sons the second of whom, either through foolishness, lack of initiative, or whatever you like to call it, stays on the family farm. When the parents pass on the other son is left high and dry. The only thing he was qualified to do was to farm efficiently because he was not reared to anything else. The ACC should advance credit to such people to enable them to buy a farm. The ACC should be enabled to come to the rescue of this second son who perhaps has emigrated and who, if he does not get the wherewithal to purchase a farm will be lost to the country. However, a maximum grant of £6,000 is not relevant to present-day costings or to the high price of land and the increased costs of production.

The question of co-operative farming was raised by Deputy Donegan. I am very much afraid that some of our younger people have not a proper knowledge of the application of credit. A farmer's son takes over a farm and because his neighbour has a tractor, a harvester or some other machinery, he feels he must be in a similar position. There should be greater co-operation between the agricultural advisory service and the ACC. When a farmer buys machinery he does not always realise that this machinery in which he has invested so much money will be lying idle for three-quarters of the year. The advisory service should encourage three or four people to combine together so that one would have a tractor, another would have a muck spreader and another a silage harvester and so that there would be a pooling of this machinery. I am rather surprised that the ACC and the other State agencies dealing with agriculture have not done more to encourage this kind of co-operation, because it is vitally important, particularly in our preparation for entry to the EEC. I would ask the Parliamentary Secretary when he is replying to clarify a point for me. It says here:

Additional credit will also be required by agricultural processing industries, particularly the milk and pig-meat processing industries.

I want to know if this is a new departure, or was this always available to processing factories and to bacon or pig-meat factories? Processing, transport and everything else in connection with agriculture will have to be efficient. There is no point in having efficiency inside the farm gate unless there is efficiency right down the line to the consumer. If efficiency is lacking this will reflect back to the producer, and it is the farming community that will suffer as a result. If this is a new provision I want to welcome it because it can play a very important part in the development of agriculture.

There is the question of whether the ACC should be more flexible. A more appropriate phrase would be "more generous". As regards the extra money that is being made available under this Bill I should like to see some of it used in connection with the re-examination of some of the refusals that have been made in the past year or so in relation to making money available to people. I can quote one case where a man borrowed money to buy a farm. He got married and started to rear a family and because of the cost of rearing the family and the cost of trying to bring his farm into full production by applying lime, fertiliser and so on, he has not got over the initial debt he incurred. I made a statement here in this regard that I thought it was because such people were already in debt that the ACC would not make money available to them. Maybe this is not so and there is some other reason for it. This is why I believe it is so necessary to have the all-party committee set up to engage in constant discussions with the semi-State bodies. I believe that many people in offices, although having the best intentions in the world, do not realise that when you buy a farm at present it will cost more than half the purchase price to stock it and to get it into working order. Farmers need a lot of credit for machinery and everything else that is required at present.

The ACC did a very wise thing in setting up area offices because up to that time the position was that where a man was refused a loan by the ACC he only received a note saying that he was deemed to be ineligible, or words to that effect. This gave the impression that you had a type of ivory tower decision. Now you have the situation, for instance, that in Cork, where you have an area office, when a farmer requires credit he goes to this office and discusses the matter with the area officer. It is necessary to show to the farming community that the ACC are human beings like everybody else and that you can go in and discuss your problems with them.

I am not sure of the number of offices they have but I hope they will extend them to cover the country because in the years to come this will be a great advantage. We have heard much talk about regional development within the context of the EEC. I have been told that all this regional development will be channelled through the ACC. Even though they have provided a very important service to the agricultural community up to now once we become members of the EEC the ACC will become far more important because it will be their responsibility to channel credit into regional development. In preparation for that there should be a further extension of area offices.

We have heard about investment in the ACC and we have heard a number of people suggesting ways and means to do this. If you had a greater incentive towards saving you would have, in turn, a greater investment in the ACC. The ACC never get what is regarded as dead money which wealthy people lodge in banks. I appeal to the farming community to invest in the ACC rather than leave money tied up in banks at very low interest rates.

It was stated in the Parliamentary Secretary's brief that the total amount of loans on hire purchase issued by the Agricultural Credit Corporation has almost doubled during the past few years from £6.8 million in 1968 to an estimated £13.5 million in the current year. We are glad to see this progress being made. There is also an enormous increase in production costs. If you take the position in relation to cattle, land and machinery it is very important that increased credit should become available. When a small farmer is anxious to purchase a farm quite close to him he can avail of credit from the ACC. You also have the bigger farmer fighting for credit. I believe there is a strong case to be made for giving the smaller farmer a loan at a reduced rate of interest. If we are serious about solving the flight from the land this is one way we could encourage them to stay at home. The objective of every farmer, whether he owns ten acres, 20 acres or 100 acres, is to make his farm an economic holding and one important way we can do this is to give him credit at a reduced rate of interest.

The fertiliser scheme has done more to improve farmers' incomes than any other scheme. It is not too long ago since the Fianna Fáil Government realised grass is very essential but you cannot have good grass without fertilisers and lime. The credit made available can be reflected in the green fields all over the country.

We have the beef incentive bonus scheme and because of the appalling price paid for milk over the past two years people were forced to get out of milk and go over to beef. I know from experience that the price of milk would not pay for the amount of effort put into producing it seven days a week. When the farming community moved over to beef production you had the situation where the monthly cheque, bad and all as it was, stopped. In many cases where multi-suckling was involved, an investment had to be made in order to buy more calves. Some farmers put as many as four calves with a cow. During the year the farmer had no income. I am glad to know that the ACC came to the rescue of those people. Many farmers were not aware that such credit could be obtained and many of them sold their stock at low prices. The middleman came in and made the profit which the farmers should have made.

The ACC through their advisory service should make known to the farming community that credit is available so that they will not have to sell their stock when prices are low. They could carry them over until they are two years old and make the maximum profit from them. This is where the ACC can be of great benefit to the farming community. In order to do that there must be proper liaison between the agricultural instructors and the ACC. They are very familiar with the farming community. They are very capable people, very interested in their job. They know what is happening in their areas and they can transmit this information to the farming community.

Is there any money available from the ACC to pay a debt already incurred? There are people who are anxious to get money from the ACC to pay off outstanding debts to the bank. This is important and I should like to know if this can be done.

This Bill is a step in the right direction. I welcome it and I want to point out to this House, and particularly to the Government, the important role which the ACC can play in the development of agriculture, in getting maximum results. We should encourage people who have money to invest, to invest it in the ACC. Somebody already mentioned an appeal to our emigrants. There are Irish people working in other countries who have made money and who would be anxious to invest if they knew of this. I wish the ACC well and I hope they will continue to do their work and to improve the farmer's income.

I welcome this Bill and I agree entirely with the Parliamentary Secretary as regards the urgent need to increase the resources of the ACC to keep pace with the growing demand for agricultural credit. We on this side of the House have faith in the farmers. The ACC now seem to have faith in them. I think it is agreed by all that 1972 will be heavy with destiny for the people of this country because political decisions taken in the referendum will settle the future of our country for years to come. The farmers have been in the front line trenches in many wars in the past—national, social and economic. They and their labourers saved our people from starvation by hard work during the last war. I have no doubt now that if the farmers get what they will need in the years ahead, more and more money, they will be able to put this country on its feet and provide employment for those who unfortunately have had to emigrate and indeed for the unemployed in our midst at present.

It is proposed in the Bill to enable the ACC to raise money in foreign currencies. I agree with what Deputy Creed said with regard to incentives to save and the appeals he has made to Irish people abroad to take an interest in their own country and if they have spare money to invest it in the ACC. By doing that they will be proving that they have faith in their country; they will be investing in its future and perhaps in the future of their children because if this country prospers as we would all like to see it prosper there could be jobs here to which they or their children could return.

I think we should also appeal for repatriation of at least some of our external assets. Deputy O'Donovan knows more about this than I do. I think we have £400 million in external assets.

I hope it is more than that now.

It may be £480 million or £490 million. I am not sure.

The pounds are not as good as they used to be.

We should appeal for some of that money to be brought home and invested here. We should also appeal to people who have money lying dormant at very low rates of interest. Many of those people have been afraid to take a chance in the past. They have left their money in the bank at low rates of interest. Any of us who can help to mould public opinion should try to get those people, in their own interest, and in the interest of the nation, to have faith in the farmers, to have faith in the future of the country and to invest their money here where they will get a good rate of interest and where undoubtedly it is quite safe. We should all be interested in the future of our people. It should be pointed out to those people that the prosperity of all our people depends on what the farmer and his labourer can get from the land and export profitably. Since we have very little underground wealth the prosperity of each and every one of us, in the last analysis, depends upon this. It is of the utmost importance that we should appeal to those people, whether they be Irish people at home with money lying dormant or people abroad, to invest here. They will get good interest rates and their money will be safe because it is backed by the State. The figures we have got from the ACC prove that it is good business to lend to the farmers, that 99.9 per cent of them meet their commitments and live up to their responsibilities.

Agriculture is under-capitalised. The only fault I find with this Bill is that I do not think the Parliamentary Secretary has gone far enough. We need a massive injection not of £70 million over the next few years but, as many experts have pointed out, we almost need a yearly injection of £70 million for the next five years. What is needed at present is a well-defined programme or plan for agriculture, particularly with the prospect of our entry into the EEC. We have 12 million acres of fertile, arable soil. We have the grass. The people, perhaps, may not have believed in it in the past but late conversions are no harm and we have the people to work it. However, most people realise that the land is not worked to its full potential and we may ask why. The answer any farmer, agricultural inspector or person connected with agriculture will give you is that the land is not worked to its full potential today because of shortage of money. The Parliamentary Secretary was quite right in stating that the expanded demand for credit will accelerate in the next few years. It certainly will and we must be prepared for it. Therefore, I submit we are not going far enough in this Bill.

We may ask where is the planning we should have today for agriculture? Where is the design for the future of agriculture? The Department of Agriculture and Fisheries have been too conservative and lacking in initiative. The Department and the ACC must become more active and more alive to the situation and they and the farmers' organisations must work together to have a proper plan for the injection of £70 million per annum into agriculture, not that figure over a period of several years.

After all, agriculture is the foundation of the country's economy. As I pointed out earlier, if the people on the land are more prosperous so will the whole nation. If they are poor on the land the whole nation will be poor. Therefore, more and more agricultural credit is necessary. So far, those concerned with agricultural credit have been doing a good job throughout the years.

At this stage it is necessary to point to the disparity between investment in agriculture and industry. According to figures given by the Parliamentary Secretary, investment in agriculture in 1972 is unlikely to exceed £18 million. We can compare that with the £95 million which it is expected to expend in industry. I have always said we should endeavour to bring those two arms of our economy closer together but I think in the matter of investment the reverse should be the case. According to all the experts, we must have massive extra investment in agriculture. We have 12 million acres of land. Roughly 11 million is grassland. We must remember we have the best grassland in the world. Because agriculture is undercapitalised—admittedly grants are available to bring land up to proper fertility—that grassland is carrying only 1.7 million cattle, 200,000 heifers, 1.1 million beef cattle for sale, 2.8 million others, totalling 5.8 million. If agriculture were properly financed by an extra £70 million a year we could sustain at least, according to the experts, 5 million cows, 1 million heifers, 1 million culled cows and 3.5 million beef cattle of 10 cwt. for sale each year. That would be an output of £1,490 million, compared with our present output of £470 million. This, adjusted to Common Market prices, would mean an increase of £1,020 million. This would be good for the whole country and it would help to solve the problem of 80,000 unemployed by providing useful employment.

I believe our farmers would and could meet this challenge if given proper leadership, backed up by proper services and proper finances from the ACC. The farmers of Ireland represent 28 per cent of the population; they are responsible for more than 65 per cent of total exports; yet they have for themselves only 17 per cent of the national income. We all know of the misinformed opinions given of the farming community which have helped to bedevil them for so long. What is needed at the moment is an injection of capital each year to the extent I have mentioned. This would make agriculture more efficient and more competitive in EEC conditions.

Debate adjourned.
The Dáil adjourned at 10.30 p.m. until 3 p.m. on Wednesday, 8th March, 1972.