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Dáil Éireann debate -
Wednesday, 8 Mar 1972

Vol. 259 No. 8

Agricultural Credit Bill, 1972: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Last night I stated that the only fault I had to find with this Bill is that I believe it does not go far enough. Instead of £70 million over the next three or four years the ACC should get power to spend at least £70 million per year. A huge injection of money is necessary. We are entering a huge market in the EEC. There are millions of acres of arable land. We have men who can produce the goods if they get the tools which are needed. They need money at present. As Ireland is an agricultural country, if the people on the land are wealthy the whole nation will be wealthy. If they are in poverty, the rest of the nation will be in poverty. It is necessary that farmers should get capital. They will not get the money for nothing but will have to pay interest on it. They should get this money as quickly as possible.

Last night Deputy Creed appealed to those who had emigrated and had money to send their money home here for investment purposes. I claimed last night that we should repatriate some of our external assets which now stand at about £500 million. Those in our community who have money in banks, and who have been very conservative, should take out that money and invest it in the ACC. Their deposits will give them a good return. Such investment would be gilt-edged, backed by the State.

The ACC should be in a position to give the farmers the necessary £70 million per year. The agricultural industry is the very foundation of the country's economy. The coming years may be hard but in the EEC we are entering a market of 250 million people. We have a guarantee that if the farmers can produce goods from the land they will have a ready market for them. Farmers will have stability, knowing that if they can increase their production they will have a ready market for it. In the past if they increased production they often found that the bottom had fallen out of the market for the goods produced. There was no encouragement for them to increase production. That will not happen in the future.

The Department of Agriculture and Fisheries should have a proper programme and a grand design for agriculture in the future. No such programme exists at the present time. If the Department show more initiative and co-operate with farmers' organisations and the ACC we could have a proper programme. The ACC could finance it and there would be a very bright future ahead for the farmers and people of this country. There is great disparity at present between investment in agriculture and investment in industry. Investment in agriculture this year will be between £15 million and £18 million. At the same time, we know the Government are investing £95 million in industry. I have always believed that industry and agriculture should be treated equally. Neither should be neglected. They are interdependent. Industry cannot prosper without a good home market. If the people on the land who purchase their goods are not prosperous, industry cannot prosper. The programme which I mentioned could be financed by an injection of capital. With a proper injection of capital the farmers of Ireland could treble their output and instead of produce worth £470 million at the present time they could produce goods worth £1,490 million. This would be an increase of £1,020 million.

Experts have stated that such an increase is well within the biological limits of livestock population growth. Our farmers are capable of producing much more. They need more money. Indirectly they could help in an industry which is going through hard times at present and which is of the utmost importance, namely, the dead meat industry. Many farmers have to sell cattle in the autumn because they have not money to buy feedingstuffs or artificial manure to put on their land to ensure early grass. They have to sell in September or October. If fewer cattle were sold in the autumn and more remained to be sold in the spring, this would help the dead meat industry which is of vital importance to the country.

People will say that the farmers are being mollycoddled again. The money they get will have to be paid for. Farmers paid back money in the past. The ACC have been repaid by the farmers although some of them may be slow with their payments. The money has been well spent in increasing production. The increase in farmers' incomes has helped the nation. It is imperative that it should be understood that agriculture needs a huge injection of money in order to make it more efficient. We all want to see agriculture more efficient and competitive before we enter the EEC. The prospects are now much better for farmers than they have been. The majority of our people reside in cities and towns and they may feel that they will not benefit from this money. If agriculture expands over the years, having got money, 80,000 people who are unemployed might be employed. More employment could be provided. More jobs would be created in non-farming occupations.

The Minister mentioned that additional credit was required for agricultural processing industries, milk, pigmeat and pig processing industries. Money invested with the ACC could be used to advantage if the Government had a proper plan. Farmers will have to purchase new equipment of many kinds such as bulk milk carriers, tankers, trucks, jeeps, tractors, silage harvesters, silos, milking parlours and other farm buildings. Extra drainage will have to be carried out on the land. The ACC will provide money for this work. Extra drainage equipment must be purchased. Extra fertilisers to manure the land will be necessary. The ACC can provide money also for that.

Extra creamery equipment will be necessary if the farmers wish to become more efficient. If they got extra money they could build additional cow houses, out-offices, silage pits, and they could spend more on fertilisers, medicines, paints and so on. Frequently farmers cannot afford to pay the veterinary surgeon's fees even though they realise their animals need attention. If the farmers had extra money more would be spent on feeding stuffs, on compounds, and medicines; they would be able to build new houses for themselves and to install electrical appliances. By ensuring that the farmers got additional money the benefits will be felt throughout the rest of the community——

The Deputy is getting away from the Bill.

The Minister stated that additional credit would be required for the agricultural processing industry. I am pointing out that if the farmers get this money it will be well spent. The Agricultural Credit Corporation give money for the drainage of land, for the improvement of land and for fertilisers. If the farmer wants to become more efficient he is entitled to get these things and his wife, who works very hard, is entitled to have the most up-to-date equipment in her house and to have a comfortable home. In speaking of these matters I do not know if I am drifting far from the Bill we are discussing.

Any expansion or development in agriculture automatically results in the expansion of employment in factories and in the sectors about which the Minister has spoken. These are the processing of agricultural produce, creameries, powdered milk, chocolate crumb, sugar, vegetables, cheese, animal foods, meats, pork, bacon; in the processing of these goods many thousands of workers are employed. It is important in the national interest to point out that the nation will prosper when our agricultural industry prospers.

Recently we were supplied with a booklet from the ACC and I should like to compliment the people who compiled it. It is a valuable booklet and should be in the hands of every Deputy and Senator and of members of all committees of agriculture. The booklet gives full information about account facilities, farm credit bonds, fertiliser and ground limestone schemes, hire purchase arrangements, interest rates, loans with security and loans without security, premium bull schemes, short-term credit for hay barns and requests for application forms.

The Deputy insulted the farmers.

It is quite true and it happened frequently in the past——

It does not arise on this Bill.

Whoever appoints the directors of the ACC should bear in mind that members of other parties have a certain amount of brains and a sense of responsibility and that Fianna Fáil members do not have all the brains——

ectors must be members of one polibrains and it is a pity that all the dir- area officers, budgeted loans, the dairy livestock schemes, deposit that members of other parties have

I wish to point out week that the farmers had no brains.

I did not. The Deputy should read what I said. I have no hesitation in repeating what I said. I said that in the past if a farmer had a bit of money and if he had four sons and if three of them were brainy he was inclined to send them away to be educated as doctors or solicitors and that is quite true——

The Deputy said last tical party. Those people who speak so much about cherishing all the children of the nation equally should think about this when they are appointing directors to semi-State bodies.

I always thought the ACC could give money to farmers only for the purpose of buying land. I am 20 years in politics but I have never known of anyone getting money from the ACC if he did not have land or was not a farmer's son. It annoys me sometimes when we make representation on behalf of an individual to get a letter from the corporation stating that the person concerned was not deemed eligible for a loan but they do not give any reason. In such an event I often tell the person that it might be no harm to go to a Fianna Fáil Deputy or someone who has influence. In a fortnight the applicant will come back to me with a letter from a director of the ACC stating that the applicant will get the loan.

This is wrong. Those who are entitled to loans should get them irrespective of whoever makes representations on their behalf. The officials know their work and they will give money to applicants they believe are entitled to the money. If I recommend a person and if the ACC claim that, from the knowledge they have, he is not entitled to the money I do not object, but I am annoyed when it transpires that someone else can bring some pressure to bear——

It is a figment of the Deputy's imagination.

I have here a document—I do not want to give the names of the people but it came from members of the ACC who were annoyed about what is happening. I will not read it in its entirety in case I disclose the names. It states:

Recently a farm of 94 statute acres at Leney, Ballinalack, or Ballinafid, Mullingar, was sold to joint buyers, both nurses in Mullingar Mental Hospital. Their income is £1,700 per year each and the price was £13,500 for the land. The position is that they bought it at an excessive price and against genuine local farmers and on the assumption that they could borrow the money from the ACC. This application was duly processed by us and was refused as they were not entitled to such a loan. Despite this refusal——

The Deputy should quote the source of information.

I think he has given it already.

——they went to another Deputy and had their loan granted in a few days.

I believe this should be exposed.

When the Deputy will not give the facts how can it be exposed?

This happened within the last three months. It is well known that certain people who have a hold on the Government get things done that even Fianna Fáil Deputies cannot get done at certain times. They should not be able to influence anyone——

The Deputy should check with Deputy O'Higgins and see what he thinks about the directors.

I am asking the Parliamentary Secretary to check this matter and to let me know if nurses are entitled to get a loan of £13,500 in order to buy land. People who can only be regarded as speculators are bidding against deserving farmers in order to get land.

I want to say that I welcome the Bill but I hope that those matters will be looked into and that the Parliamentary Secretary now or at any time within the next week can give me a satisfactory answer as to why those two persons got loans for this farm and say whether he is prepared at any time in the future to give loans to nurses and persons with £1,700 a year to buy land.

I, like the other speakers, welcome what is contained in this Bill. We are all agreed that farmers need a great injection of capital into their business in order to be able to compete in the EEC, which we hope to join in the next year.

As regards what Deputy L'Estrange said, I do not like castigating people. We should congratulate everybody connected with the Agricultural Credit Corporation. They are doing a good job. I find them, from the chairman and board of directors down to the area officers, very fair. They will listen to anyone who puts up a fair case. They are not involved in politics. They are of all shades of opinion. I have met the area officers and have found them to be very fair. Sometimes they refuse applications. I have been involved in applications which were refused, and rightly so. Deputies have said that when they reply to letters from them the reply is merely a matter of courtesy and that the application is refused. In many cases the corporation have private information which they are not likely to divulge and it is their business to ensure, when they give loans, that the money will be well spent and will be given to a person who has a viable proposition.

I notice that the corporation will be empowered under the Bill to go to the World Bank and to foreign markets for money. That is only right and proper. It could happen that they would not be able to get sufficient money on the home market. The demand on the corporation from the farming community will increase because farmers cannot borrow from the bank a loan repayable over 15 to 20 years. They may get credit from a bank repayable in three or four years.

In the case of a dwellinghouse, the corporation are willing to grant a loan repayable over 30 years. That is a long term. One does not expect a bank to give such extended credit. That is not their normal function. The rate of interest charged by the Agricultural Credit Corporation is more than competitive, which makes it very popular with the farming community in general.

There is a category of persons with whom the corporation should be more lenient in granting loans for dwelling-houses. A young farmer inheriting land, the poor law valuation of which may be £64, would not be entitled to get a county council loan. He would have to go to a building society. Building societies have a very strict rule that they will not lend money for the erection of dwellinghouses outside the urban areas. Therefore, the Agricultural Credit Corporation should be lenient with such applicants.

A farmer applying to the Agricultural Credit Corporation for a loan for the erection of a dwellinghouse may give the information that he intends to cater for farm holidays. In that case the loan will not be sanctioned. A broader view should be taken of this matter. If the farmer builds the house and then adds a section which can be used for farm holidays, the loan will be sanctioned for the original part of the house, regardless of the size of the house. The fact that the farmer intends to cater for farm holidays should not influence the decision. It may be suggested that this has nothing to do with agriculture. It has something to do with agriculture because the farmer concerned is anxious to make his holding more profitable by inviting people to stay with him. That should be encouraged. The rule should be changed so that his stated intention to cater for farm holidays would not disqualify him for a loan.

A young farmer who inherits land or buys land or who has a small farm can get a loan of approximately £6,000. Many people claim that more money should be available for the purchase of land but you could run into trouble there because if money were freely available for land it might inflate the price.

The corporation should work in closer liaison with the Land Commission in regard to the purchase of land. If the Land Commission were to select two or three small farmers for the purchase of a farm, those farmers should get the chance of going as a group to the corporation for a loan for that purpose. The Land Commission could recommend them to the corporation and then the loan should be sanctioned. A sum of £6,000 is not a great deal when it comes to purchasing land. Undoubtedly, it is a great help to a farmer who wants to make an addition to his holding. The Land Commission could select those farmers who, in their opinion, were the most suitable for the purpose of purchasing a local large holding and, on their recommendation, the money should be made available by the corporation. Last week we discussed the question of land bonds. This would be one way of getting over the problem. The vendor would be paid in cash which, in the main, would be supplied by the corporation. I would ask the Minister to consider the question of closer liaison between the Land Commission and the corporation.

The corporation is the bank that the farmers of Ireland will apply to for money. In the years ahead money will have to be poured into agriculture. Our young farmers are not afraid to borrow and they should be encouraged to use credit. In many countries a person over a certain age must have a credit card if he wants to borrow money. No matter what amount of security he might have a man of 45 years of age will not get credit unless he has proved his ability to repay. Young farmers should be encouraged to borrow from the corporation and, once having proved their ability to repay, they would be in a position to borrow larger amounts in later years on the production of a credit card.

Once again I should like to congratulate all those concerned with the Agricultural Credit Corporation. They are doing a fine job. When people apply to them for loans they have to decide on their creditworthiness. In the main, their decisions are very fair. I completely agree with the Bill and, if it is necessary, I hope we will be coming back seeking more money for the corporation, for the benefit of the farming community.

The usual reaction to a Bill of this kind is to say that it is very welcome and will be a benefit to a particular section, the agricultural community in this instance, and that its sponsors, the Agricultural Credit Corporation, a State-sponsored body, are doing an excellent job. It has been said that they do a good job, that they have a tough job and that their position is a very difficult one, and so on. I do not know whether it is or not. I have no information at my disposal to make a factual appraisal of their work. Neither has Deputy Meaney unless he has some inside information of which I am not aware. Neither has Deputy L'Estrange. I am sure they have only the same information that I have, an abbreviated report which gives no details of their administrative dealings with loan applications. It does not give any idea of how many applications were received and how many rejected. It tells you how many were approved.

At one time I would have said that a body like the ACC were very good and, indeed, essential, as they are in a country like ours where so many people are dependent on agriculture for their livelihood. But I am not satisfied that there is sufficient information at my disposal or at the disposal of any Members of the House to enable us to say, and stand over it, that the corporation are doing a good job. Over many years I have advocated that there should be a committee of this House to delve into the affairs of State-sponsored bodies. I make that appeal again today. We should have more firsthand information from all State-sponsored bodies as to how they carry on their business. We, as the people's representatives, should be in a position to assess their work from much closer scrutiny of it than we can get from these annual reports which give little or no information.

That is a big defect; the autonomy of State-sponsored bodies is almost absolute. What business can this Parliament do? How can we assess their work? We have no knowledge of the yardstick by which they measure a loan application. I say this because when I came in here I thought the ACC were being set up by the State to help farmers in financial difficulties, particularly small farmers, and that those were the main type of people they were obliged to help, farmers who might not be able to get credit from other sources such as banks. The State-sponsored body, I understood, would act as a sort of fairy godmother and give them loans at a reasonable rate of interest and help them by providing capital to develop their holdings and improve their living standards. To my mind, and from my knowledge, the ACC are not doing that job. Why do I say that when I said a while ago that I was not very conversant with the functioning of the ACC? My information in that regard is based on the fact that I have consistently advised people to go to the ACC for loans, that it was the best and most likely organisation to give them the money, only to find numbers of them coming back to me and saying: "That was sound advice; there is nothing coming from them." Many of these people were then forced to go to hire purchase concerns and pay three or four times the rate of interest when they needed agricultural machinery and so on.

My line and my party's line is that the primary obligation of State-sponsored bodies such as the ACC is to help the small man. I have heard of people with large holdings in public companies and in gilt-edged securities who do not interfere with these holdings but avail of the ACC to borrow money for current needs as it is easier and cheaper for them to do that rather than interfere with their existing investments. Surely that is not the type of person who is supposed to benefit by the Agricultural Credit Corporation but apparently that is the type of person who has no difficulty in getting a loan approved without much delay. I fear the main yardstick applied to applications in Harcourt Street is whether the applicant is in a position to repay the loan, whether he is credit-worthy. If the ACC never existed such people would not be short of capital but when it comes to the small farmer with seven, eight, nine, ten, 12 or 14 cows, if he applies there is a rigid investigation and more often than not —I cannot give figures since the report does not supply the figures—his application is rejected. Then we are told that we know all and that we should congratulate the 176 people employed in the ACC doling loans to needy farmers.

According to the report the number of loans approved in 1971 was exceptionally small, something over 6,000. How many were refused? Is the greater part of the £8 million and the greater part of the increase in transactions reflected only in the money end of it? There is no upward trend except in money: in regard to applications it does not exist. In 1966-67 the number of applications was 7,521; in 1970-71 it was 6,617. The money has increased from £3,851,000 in 1966-67 to £8,646,000 in the last year. Who is getting that money? Are the combines getting it? How many of them are getting it? What ceiling is set for them? Are this corporation devoting too much of their time and too much of their work to financing people who can prove to them in effect that they do not really want the money, that if they are refused, they can get it elsewhere. Naturally, because of interest rates generally, even the wealthiest farmers and big combines will try to get their money at the low rate which it is offered by the corporation.

Following advertising on television by the Agricultural Credit Corporation and the production by them of a very colourful brochure, many small farmers applied for loans in the belief that the money would be forthcoming within a few weeks. However, they found that that was not the position because anyone who had a bank overdraft of, say, £300 or £400, or who was in the red to his creamery to the extent of £200 or £300, would not be considered as being creditworthy. I agree with the system of having independent officers for the purpose of investigating a person's creditworthiness. I was one of the people who advocated officers as we know them, employed by the corporation for this purpose. In the past investigations were carried out in a rather backhanded and shady manner. A letter was sent to the sergeant at the local Garda station asking if such a person might be regarded as being creditworthy. Before that system was changed I discussed the matter with the late Mr. Kiely and pointed out to him the desirability of appointing independent officers. My information regarding those who are turned down for loans is very limited but not any more limited than that of any other Deputy.

I hope that in the not too distant future there will be set up representative committees of this House, not necessarily big committees, for the purpose of examining and reporting back to this House as to the administration of public bodies so that we can have a break down of expenditure and so on. Of course there will be no question of any deviation from the confidential nature of applications. In respect of the body we are discussing now, we should know how many people were turned down for loans, what were the general reasons for turning them down and would a farmer whose valuation was about £20 be turned down because he owed money to his bank or to his creamery? At the moment all any of us can have is limited information such as we get from individual cases we encounter. However, we are aware that the number of applications approved is not increasing. That is surprising when one realises the need there is for agricultural credit and having regard to the favourable rates of interest charged by the corporation.

It upsets me when I hear of a man being turned down by the corporation for money which he needs to buy some piece of farm equipment because that man will then have no alternative but to put himself in the hands of moneylenders—hire purchase companies which, at least in some cases, are charging as much as 30 per cent interest on loans. On previous occasions here I raised the question of the lending rates of such bodies with Deputy Haughey when he was Minister for Finance. Some of these people are no better than usurers.

As a Deputy representing an area where there are many small farmers, and medium farmers, too, requiring capital, and whose integrity is not in any doubt, I say that the corporation should come to the aid of these people. They need the money because of various difficulties confronting them— difficulties arising from the decline in the value of money and from lower income returns from their holdings. Also, there are farmers, big and small, who are educating their children and this imposes quite a financial burden on them.

Urban dwellers, seeing the corporation's advertisements on television, could hardly be blamed for thinking that all these people had to do was to make application for a loan and the money would be given without delay. I would like the Parliamentary Secretary to give us more information than was supplied in his brief. I want him to tell us the number of applications received by the corporation in the recent financial years up to 1971. Also, I want him to classify these applications—how many were received from farmers with valuations of less than £10, how many were received from farmers with valuation of less than £20 or £30 and how many were approved or rejected. This is the sort of information that we cannot get by way of tabling questions but it is information that we need in order to be able to assess the work of the corporation.

I am not being critical of the corporation. It would be more appropriate to be critical of the type of legislation we enact here, legislation that precludes the elected representatives of the people from getting in detail information regarding State-sponsored bodies. That kind of legislation should be implemented to enable us to make an assessment as to whether or not this board is doing a good job. This document does not give us much information about the board's activities. It tells us a little about the board's borrowing powers. The kind of business they want now is, I think, lending facilities for the big combines. The emphasis is on loans for the big people, the combines and the big farmers.

It is seldom we get an opportunity of discussing the operations of this board here. If an applicant applies for a loan and that applicant is well-to-do, with possibly a great many investments of his own, is his application approved or rejected? Is this money being made available, in other words, to people who are not in needy circumstances? I am fearful that it is. I am not sure what the position is and neither is any other Deputy as far as I know. It is all very well to send out these colourful brochures. I am not aware personally of the position outlined by Deputy L'Estrange this afternoon but, if the Deputy's statement is correct, then this body is working on a rather crooked line. Is it true that applicants who do not measure up to the qualifications of the board get loans through political influence? It is all right to make representations on behalf of an applicant legally entitled to a loan who may be in some difficulty but, if what Deputy L'Estrange alleges is happening, that is all the more reason for establishing a body to inquire into the activities of the board.

I am here a fairly long time now but I am not yet sufficiently long to be in a position to make a factual appraisal of this State-sponsored body because I just have not got all the requisite knowledge. I stress this in the hope that my suggestion will bear fruit. It is not so long since I stressed the idea of making known to the public, the people who contributed the money, the grants paid to hoteliers. That was laughed at. It was stated that such information would be a breach of confidence; this, that and the other would happen. However, after pressure, the Government had to concede the point. Now I am trying to get the same kind of result so far as the Agricultural Credit Corporation is concerned. Possibly it would benefit the corporation if that information were made public. Possibly the corporation is doing a great job. The trouble is this kind of brochure does not give us the information we really need and we have to rely on what we get from outside sources and those outside sources are the borrowers, particularly the rejected borrowers. Perhaps the Minister will be able to tell us how many are rejected.

This report contains a very interesting item. It is headed "The Smallholder". They are in tears over him in Harcourt Street:

I am not prepared, however, to write off the Irish smallholder as an historical anachronism. Much of this country's strength, moral and material, has come from the smallholder and he still has a vital and influential role to play in our society. I do not believe, and my experience confirms me in this, that the smallholders, for long the backbone of our country, will allow the advantages which were gained by the sacrifices of succeeding generations to be lost through failing to adapt to modern economic requirements.

What exactly is that calling for? It is calling out for what I am calling for here. It is calling for better conditions for smallholders and, by better conditions, I mean treating the smallholder's application more sympathetically. If he is down in the creamery and in the bank, do not write him off. That has happened time and again. If he was not down he would not be applying for credit to the corporation. I maintain the corporation is not standing fairly and squarely by the smallholder and I hope we will get a breakdown of the applicants who were rejected. I believe that, when we get that breakdown, we will find that it is mainly the smallholder who is denied a loan while the big fellow, who does not need it, gets it.

There is a good deal of reading in the chairman's address but there is very little information that would be helpful to Deputies in making an assessment of this particular body. I have been critical but I believe my criticism is justified. I would much prefer to follow the line of previous speakers and say these are a grand bunch of fellows doing a great job. But I just cannot say that. In my experience it is a waste of time to make representations to this Harcourt Street group. I want from the Minister the number of applications from small farmers which were rejected and how many applications altogether came from that source. We have not got that information. I believe it would be a good day's work if we had the kind of committee I mentioned earlier to examine in detail the affairs of this corporation so that we would get the kind of information we really need as against the kind of information the Parliamentary Secretary gave us when introducing the Bill yesterday.

I wish to welcome this Bill which is designed to increase the borrowing capacity of the Agricultural Credit Corporation to £70 million. There is a growing demand for credit among farmers to purchase livestock, fertilisers and machinery and also for land drainage and improvement and the improvement of farm buildings. I come from a rural constituency and it is made up mainly of dairy farmers. The ACC have done a very good job in my county. Being a dairy county, the farmers there needed a lot of capital to increase their cow numbers. My constituency is one of the most intensive dairying areas in Europe. There are more dairy cows per acre in North Kerry than in any other part of Europe. We in North Kerry can thank the ACC for lending money to the dairy farmers to build up their herds. If and when we enter the EEC the forecast for our county is that the income from agriculture will double by the end of the 1970s. The farmers there will need a lot of capital to increase their dairy herds and their cattle numbers. The price of dairy cows at present in County Kerry is about £200 each, whereas 12 months ago a dairy cow could be purchased for about £100 or £120. The ACC will have to be much more lenient in giving credit to dairy farmers to increase their cow numbers and to stock their land with cattle. There will be a very great demand on the ACC by small farmers for money to purchase land. If and when we go into Europe our farmers, small and large, will become much better off. The small farmers will be anxious to purchase any adjoining small holdings and they will need to borrow money in addition to what they have saved. This is where the ACC will come in very useful.

The introduction of the area officers by the ACC was a great step forward because when you are examining an application for a loan there is no better way of assessing whether a farmer is loanworthy or not than to have an officer call to the farm and have a chat with the farmer and look around the farm. He can then see how the man is farming his land.

The ACC lend up to £400 at 6½ per cent interest and this is very good but £400 today is not much use for purchasing cattle, dairy cows or even fertilisers. I suggest that the limit should be increased to £800 in view of the fact that prices have increased so much in the past couple of years. I think the ACC will play a very big part, too, in the rationalisation of our creamery business. In my constituency we have many small co-operative creameries. When we go into the Common Market we will have to have rationalisation. The ACC can be very helpful here.

The ACC do a big advertising campaign in this country and they have got many Irish people to invest with them. I think they should conduct a big advertising campaign in England because there are many Irish people working there who would be anxious to invest at home especially to help the farmers.

I should like to thank the ACC for the good they have done for the Irish farmers and I hope that in the future they will do work as good as they have been doing for a number of years.

I should like to welcome this increased amount of money for the ACC. I think, like Deputy Murphy, that we do not really know what goes on in the ACC except by way of the nice pamphlets they issue and their annual report. The annual reports of many State-sponsored bodies are beautifully got out but give very little information. They are like good replies to Parliamentary questions. They tell you as little as possible in as many words as possible. I fear that the ACC are not making money available to the people who most need it—the small farmers. From experience in my constituency I know it is quite easy for the medium-sized and larger farmer to get a loan from the ACC but the small farmer finds himself in trouble.

It was suggested to me last Friday night at a meeting in County Clare that large combines are getting an enormous amount of money from the ACC and I should like the Parliamentary Secretary to tell us whether there is any truth in this or whether there is a ceiling on the amount of money one can borrow from the ACC. Are these large combines which are now going into intensive beef rearing eligible for large grants from the ACC? I think a limit of £400 is quite unrealistic in this day and age. A farmer said to me recently £100 would not buy a good dog. Certainly one could not buy a good two-year-old beast for £140. A sum of £400 is not much use to a farmer who is buying cattle. Such a sum might be useful to a small farmer buying fertilisers but £400 would not buy enough fertiliser for a large farm. The ACC should increase the ceiling to £1,000 for farmers buying cattle.

The employment of area officers is welcome. In the past when I was approached with an inquiry as to the credit-worthiness of a person I felt that I was not in a position to give such advice. Area officers should be in touch with the farmers. They should inspect their farms and inquire about their plans. They should ascertain how the money will be used and judge for themselves whether or not the applicants are credit-worthy. On one occasion I was asked about the credit-worthiness of a person who was looking for a substantial loan. I did not feel that the person concerned should get a loan but he got one and I understand that there has been great difficulty in collecting repayments. I was, of course, not really in a position to advise on his credit-worthiness. I was judging the man from my knowledge of his farming, not knowing what his bank account was like.

Deputy L'Estrange mentioned something disquieting which has been rumoured recently. This point was mentioned at branch meetings recently. It was said that people other than farmers are being given loans by the ACC for land purchase. This is wrong. The ACC should only lend money to farmers or to farmers' sons who have been working on farms all their lives. Deputy L'Estrange mentioned a specific instance where psychiatric nurses were given a loan to buy land. There is land hunger in this country. There are a large number of small farmers who would like more land. Surely they should receive first consideration. They should get land instead of business people, professional people or anyone else. I have not been able to confirm or deny the rumours, but one Deputy has now said quite openly that land is being given to people other than farmers. When replying, the Parliamentary Secretary should deal with this point.

While the ACC are doing a very good job they are not flexible enough in dealing with small farmers. Small farmers are afraid to approach them for loans. They would not approach the ACC. A small farmer will not approach the ACC unless he feels he can repay the loan. The ACC take chances with bigger farmers but not with small farmers who are the ones who already need the loans. A bank manager will advance money to a substantial farmer to buy cattle but he will not do the same for a small farmer. The ACC should help the small farmers. They should also increase the ceiling. Cattle and sheep prices are rising. The loans which can be obtained are unrealistic in view of the prevailing prices. It remains to be seen whether sheep prices will stay at such a high level but cattle prices will rise unless we do something disastrous like staying out of the EEC. By mid-summer cattle prices will have increased substantially. Then a price of £160 or £170 for a two-year-old animal will obtain. What good is £100 to a man going to the cattle mart? He should be given at least £1,000.

I will not delay the House very long. I receive many inquiries from the farming community in my constituency. I live in a rural area and am bound to receive such inquiries.

I welcome the Bill and the approach that has been made by the Department. Never at any time in the history of our country has it been so necessary to lend money to people who are prepared to borrow. With the rise in prices farmers are looking forward to a brighter future and are becoming deeply interested in agriculture. It is very encouraging to see the Minister being prepared to move with the times. The Agricultural Credit Act, 1969, fixed a limit on borrowing by the ACC to £25 million. Borrowing by the corporation at that time amounted to £11 million and it was thought that the new limit would survive for four or five years ahead. The growth in the corporation's activities has been greater than expected and a borrowing limit of £25 million has already been reached. That shows the great interest being taken in farming. With wages and the cost of materials connected with any scheme today it takes quite a considerable sum of money to get anything done. When a small farmer decides to carry out some scheme of improvement no matter how small he has to consider the cost of machinery. The day is gone when people will carry on as they did 20 years ago when machinery was not used. There was a large population then and people concentrated on their own way of working. A change has come within the past 20 years. Whether we like it or not we have now reached the age of mechanisation. We must all avail of machinery. That is why so many people are prepared to apply to the ACC for money.

The country is in need of a general tidy-up. Any of us who travel by car or train through the country will notice the dumps, the untidy hedges and the neglect.

Cattle prices are good today and farmers realise that they must make greater use of their land. It is sad to see so much land closed in with hedges and no drainage work done on it. I have often pointed out to the Minister for Finance and his Parliamentary Secretary that some of the drainage schemes, and the other schemes we have in operation today, do not really get to the kernel of the problem.

We have the local improvements scheme which helps to improve the lot of a group of farmers by the installation of a new road or the drainage of a small river. We have the land project scheme, a scheme carried out by individuals. If extra money were made available for those schemes I have no doubt that many more of them would be carried out. The manpower is not there, the machinery is costly and many people just drift on rather than go into debt. We also have the farm improvements scheme which is a scheme undertaken by individual farmers but it takes money.

I have gone to the ACC on a number of occasions on behalf of small farmers and I have very often been able to go back to them with the good news that they would get a grant for a hayshed, a piggery or a cow byre. I can assure the ACC that the small farmers who are prepared to borrow this money are determined to do a good job. Our farming community are rather conservative. They shy away from borrowing money unless they have good reason to think that the borrowed money will pay dividends. Many small farmers have jobs in nearby towns and have borrowed money from the ACC to improve their holdings. I hope many more will avail of this opportunity to borrow money.

I am glad to see that the Minister is preparing to increase the grant to the ACC. With the price of livestock so good the ACC can rest assured that there will be a greater demand for money in the future. The small farmer will be able to make his farm pay if he utilises the money he borrows to the best advantage. The rate of interest at 8½ per cent is reasonable. As a concession to small farmers a rate of 6½ per cent is charged to those whose total indebtedness to the ACC is not more than £400. A small farmer who has a son helping him can get quite an amount of work done with £400.

Manuring of land is very important today. All small farmers should avail of the grants given for this work. A lot of the land in the west of Ireland is really starved for manure. This is what the small farmer should concentrate on first. We had schemes in the past where farmers were obliged to drain part of their land before they qualified for a grant. It would have been much better if those people had been encouraged to manure their land as most of it is very dry.

I welcome the Bill and I am very pleased to see that the Minister is prepared to advance a greater sum of money to the ACC. I have no doubt that he will be asked to advance more money in the near future because costs are getting very high. Loans which did a great deal of work a few years ago will only do very minor work today. Small farmers in my area have a very keen interest in the land. I am sure this applies to other areas as well, although I believe it applies more in Sligo/Leitrim where we have a greater proportion of small farmers, than in any other part of the country.

Out of ten queries which I received today six of them were in connection with land. In the past it did not cost very much to run a home but now costs have soared. The farmers are anxious to ensure that their land becomes more productive and that they can carry a large amount of stock.

I should like to welcome this Bill because it is designed to give the ACC a borrowing capacity of £70 million. The fact that most of the contributors to this debate come from rural Ireland is an indication of the importance of the ACC to the people of rural areas.

In the short time I have been here I have heard many speakers refer to the activities of the ACC in recent years. Since they were reconstituted in the early part of the last decade a revolution has taken place in relation to agricultural credit and borrowing. The people in Harcourt Street, whether officials or members of the board, are to be congratulated on their efforts to get the money and distribute it to the farming community.

The fact that they are seeking the approval of the Dáil to borrow up to £70 million is an indication of the demands being made on their resources. It gives us an opportunity to look at the activities of the corporation in the last few years. In the early sixties they were active in land purchase. It was understood that if a purchaser for land had any security at all he could get a loan from the ACC. This kind of wholesale credit was stopped, and rightly so, because it was inclined to give a false value to the land. Too many people were prepared to purchase land because they thought they could get loans without any difficulty.

I know that in recent years the ACC have tried to help the small farmers to solve their farming problems by allowing them credit in order to increase their holdings. This is desirable and we should encourage this practice. I have tried to encourage people, who normally would be regarded as suitable clients for the Land Commission, to go to the ACC. I should prefer to see them make an effort to buy land, even if it is necessary to do this on a co-operative basis. Perhaps the Land Commission might not be in full agreement with this practice because the people they might consider most suitable might not get the land. However, if young farmers are anxious to enlarge their holdings and make themselves more competitive the money should be made available to them through the only agency, namely, the ACC.

I understand that £6,000 is the maximum the ACC will give a small farmer. I do not know if this is a realistic figure having regard to the substantial increases in land costs in recent years. In my part of the country—I would regard the land there as good as in any other county—a sum of £200 or £250 per acre was considered a good price two or three years ago. A few days ago I heard of a smallholding which fetched up to £400 per acre. If the small farmer must pay this kind of price he will be limited in the acreage he can purchase. I would ask the Parliamentary Secretary to make representations to the ACC to revise this figure. It is completly out-of-date, as other Deputies have suggested. It is not possible to buy half a dozen calves for that amount of money at the moment. We must think in terms of £800 or £1,000.

I know that there are other long-term facilities for farmers with security who can get loans. The period involved is five years and I would ask that it be extended. Although the farmer is not required to repay capital for the first year, nevertheless it can create a problem and I would ask that more substantial loans be given over a period of ten years, for instance. This applies to the purchase of machinery and other items.

At one time the ACC operated a family settlement scheme whereby money could be made available to help resolve a problem which is common among the farming community. Deputies who come from rural Ireland know that a family settlement can bankrupt the unfortunate farmer who is left with the farm. The parents may be very generous when they are making a will or a settlement but frequently the person who gets the place is in a worse position financially than when the parents were alive. If a person in this position could get a loan from the ACC it would help enormously. We know that when a farm is left to one member of a family heavy demands may be made on him. For instance, a sister may wish to get married and she may require money that was provided for her in the settlement; a younger brother may wish to buy a farm for himself and seek financial assistance from the family farm. This applies to the small and medium-sized farmer to a greater degree than to the larger farmer, although the latter may be caught also. It is a terrible thing that a farm should have to be sold in order to resolve this problem. I do know that the Agricultural Credit Corporation were active in regard to such problems. They are not now giving credit for this purpose. They should reconsider that matter and, taking every case on its merits, should try to help farmers who find themselves in that position.

I have considered for many years the question of money being made available through the Agricultural Credit Corporation for grain merchants and co-operative buyers of grain. I do not think that this should be a matter for the Agricultural Credit Corporation. It should be a matter for the commercial banks through which the grain buyers do their normal business. There should be no question of the banks telling the merchants in August or September, when grain is coming in, that they cannot provide credit. The only other source of credit for them is the Agricultural Credit Corporation. I raise this matter now because this Bill is presented by the Minister for Finance. The commercial banks should be responsible for the provision of credit to grain merchants for the purchase of corn. The stage has now been reached where there are drying facilities installed in the premises of most merchants. The farmer demands the money for his grain on the day it is unloaded into the hopper. Merchants have been faced with the problem that the banks have informed them that they cannot provide the money. The Government should take action and tell the commercial banks that they must provide the credit requirements of grain merchants for the purchase of grain. The merchant can estimate what he will require in any season. The money allocated to the Agricultural Credit Corporation should be devoted to helping those whom it was intended to help when the corporation was established.

I would hope that there would be improved facilities for helping farmers, young farmers in particular, to solve their land problems by allowing them to buy land. Something should be done in regard to family settlements which can impose a colossal burden on that member of the family who inherits the land and finds himself with very heavy commitments.

When we do increase the figure of £400—I hope it will be increased to £800 or £1,000—I hope it will continue to be made available to the small farmer on the same terms, that is, a rate of 6½ per cent.

I welcome the Bill. I wish the Agricultural Credit Corporation every success in the future.

I have very little to contribute. I should like to endorse all that has been said by previous speakers. Deputy Brennan has dealt so adequately and in such a practical manner with all the aspects of the Agricultural Credit Corporation that there is very little left for others to say. I am aware that the officials of the corporation are endeavouring to make the policy of the corporation work to the best advantage of the people. This is as it should be. Without such an organisation it is obvious that agriculture cannot develop because the corporation is the great source of credit for the farming community.

A few nights ago I happened to be involved in a discussion of one aspect of the corporation's work and I was asked to draw the attention of somebody to it whenever I got the opportunity. I avail of the opportunity now. It was alleged to me that the corporation seek too much security for the loans they give to the smaller farmers and that, as a result, many of them are prohibited from seeking loans. This was news to me because I understood that there was such a variety of loans available that a farmer was in a position to make a choice and could select one that would suit his own purpose. Those with whom I was discussing the matter did not agree with me. I now place the matter before the Parliamentary Secretary to have it brought back to the proper quarters and considered.

Reading the Bill, one thing that strikes me is that it seems to deal largely with the intention of getting money in from outside. I suppose this is a forerunner of proposals to join the Common Market. Money obtained to develop agriculture will reflect on the whole country and will be to the benefit of all of us.

I should like to agree first with the remarks of Deputy Tom O'Higgins when he spoke at length for the Opposition on this Bill. I am very glad that all the parties have accepted the Bill and are going to support it.

It is quite true that the Agricultural Credit Corporation was established under the Agricultural Credit Act, 1927 but, unfortunately, during the first 30 years the ACC's operations were on a very modest scale and total loans of only £8 million were issued during this period. It is only fair to say that the slow growth was due to such factors as the economic turmoil in the 1930s, the second world war and its aftermath, conservative lending policy coupled with a reluctance of farmers to invest, and the centralising of the ACC's activities in Dublin, with little contact with the farmers at field level.

However, since 1960-61, the ACC have adopted a more progressive and diversive lending policy. The Agricultural Credit Act of that year allowed greater flexibility and enabled the corporation to simplify security requirements. In addition to that, of course, they appointed 18 area officers. In the meantime, the amount of credit issued each year increased from £0.8 million in 1960-61 to £8.5 million in 1970-71. In the current year the credit is expected to rise to £13.5 million.

As has been mentioned by many Deputies, loans are issued by the ACC for a wide variety of productive purposes, such as the purchase of livestock, machinery, fertilisers, land improvement, the erection of farm buildings and dwellinghouses. The periods of repayment range from five years for livestock, 15 years for land improvement, 20 years for farm buildings, 35 years for erection of dwellinghouses. Budgeted loans are available to enable farmers to meet their seasonal needs in accordance with the budget submitted to the corporation. Loans are given to farmers with uneconomic holdings who wish to buy additional land. The maximum loan is £6,000 and Deputies Brennan, Smith, Creed, McEllistrim and others were concerned about this figure. These Deputies complained that the maximum is too low.

I should like to say that many of the matters which were raised here are matters which would be the subject of day-to-day reviews by the board of the ACC at any time and, needless to remark, this maximum is reviewed by the board from time to time. However, the corporation have to be careful that they do not inflate land prices and, indeed, Deputy Brennan pointed out that that situation did exist at one time. If higher loans are available farmers may be tempted to pay inflated prices for land. I should like to make it quite clear that there is not a great demand for loans for land purchases from people other than those with small holdings.

Deputy Murphy, in particular, and Deputy Barrett and Deputy Tully, I think, also, were concerned about the breakdown in regard to how many people applied for and how many succeeded in getting loans. Broadly, 80 per cent of applications are approved and two-thirds of the loans granted are for under £1,000. The fears some Deputies expressed that this money was being given to large combines are not justified. To break it down further for the benefit of Deputies, the total of £8.6 million was made up of £2.56 million for livestock, £2.05 million for buildings, £0.51 million for land purchase, £0.25 million for funding debt and £3.23 million for other loans including £1.29 million for machinery, £1.2 million for block finance. The total number of loans issued in 1970-71 was 6,600 made up of 3,300 loans of under £500 each: 1,600 loans of between £500 and £1,000 each, and 1,700 loans of over £1,000 each.

The main rate of interest chargeable is 8½ per cent. A rate of 9½ per cent is chargeable on short-term loans to merchants. A special rate of 6½ per cent is chargeable on loans to small farmers whose total indebtedness to the ACC is not above £400. Deputy McEllistrim and Deputy Hogan O'Higgins and some other Deputies suggested that this figure of £400 should be increased. That is a matter which I am sure the board will review realistically from time to time.

In regard to questions about credit under the EEC, I think this will be of interest to Deputies: the EEC are at present considering a directive on aid for development farms, namely, farms which have a capacity to become viable. One of the aids proposed is a subsidised interest rate and the EEC are thinking in terms of a subsidy which would bring down the interest payable by the farmers to between 3 and 4 per cent. That will interest people when they are considering the terms of entry to the EEC because, although this directive has not yet been issued, it is under consideration. The EEC do not intend to provide subsidised interest rates for agriculture generally. In any case, the rate of interest is not the critical factor in farming; it is more important that credit as such should be available in sufficient quantities and that the farmer himself is able and willing to utilise the credit efficiently.

Negotiations are in progress with the National Bank for Reconstruction and Development, commonly known as the World Bank, to finance a livestock project costing £45 million—cattle, £37 million and pigs, £8 million. A loan of £15 million is being sought and if obtained it will be channelled through the ACC.

There was also a question about the Government taking credit or guaranteeing losses in the event of a change in international rates. The indemnity proposed is justified on the grounds that large changes in exchange rates can take place over the period of a loan resulting in considerable losses or windfall gains to borrowers. There have been wide-ranging changes in recent years and the State, with its wider range of foreign borrowing, is in a better position than a body such as the ACC to balance the risk of exchange rate losses on some currencies against possible gains on others.

I think this will deal with some of the problems Deputy Gibbons raised: the time taken to finalise a loan varies depending upon the security offered. There may be an unavoidable delay in checking a land title. The corporation are at present reviewing their security system so as to minimise delay. Also, they recently increased the maximum amount of loan available under the budgeted loan scheme to £5,000. Such loans can be cleared in a matter of days and require no security beyond a written promise to pay. Some Deputies suggested the corporation had a cautious lending policy but the corporation stress that no case of any merit is refused. The fact that they have area officers means that each application gets individual and personal attention and once the farmer shows any promise of making good use of a loan, he gets one.

Would the Parliamentary Secretary say why a man not getting a loan is not told why he is not getting it?

I should like to contradict Deputy L'Estrange on this. This information will not be given to any Deputy no matter what political party he belongs to. That is a private matter between the applicant and the ACC.

Surely the applicant should be told?

This has not been the policy. If it were, one farmer would be comparing with another and comparing what they think is like with like but which is not. It is only during the past year, in fact, that the ACC have begun to finance the agricultural processing industry, such as creameries and bacon factories. Plans have been drawn up by the Pigs and Bacon Commission for the rationalisation of the bacon industry. These plans involve compensating some factories for closing and extending and modernising others. The ACC are likely to play a big part in financing the rationalisation programme.

One Deputy referred to the total investment of only £18 million in agriculture for the coming year. The £18 million refers only to the amount provided by the ACC. Total investment in agriculture will be £60 million to £70 million. The remainder is made up of direct agricultural grants from the Exchequer, investment from farmers' own resources and investment by way of bank credit.

A few Deputies suggested that once money is deposited with the ACC it cannot be withdrawn except at the end of a period of notice. This is not correct: normally the corporation will repay on request and without notice up to 10 per cent of the amount deposited or £250, whichever is lower. Beyond this, any borrower who has good reason for withdrawing, will be allowed to withdraw at any time. I am quite sure the ACC will take note of all internal matters which came up here but which I think are not matters for direction by the Minister for Finance. I commend the Bill to the House.

Since I made that statement about notice in the House last night the officer in charge has since told me that that had been the procedure but that he has now changed it. I am delighted to hear that.

Question put and agreed to.
Agreed to take remaining Stages today.