Agricultural Credit Bill, 1973: Second Stage.

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

The primary purpose of the Bill is is to increase the statutory limit on borrowing by the Agricultural Credit Corporation. It is less than two years since this House passed the Agricultural Credit Act, 1972, which extended the borrowing powers of the corporation and fixed £70 million as the limit of their total borrowings. It is a tribute to the remarkable progress of the corporation that I am now proposing to increase this limit to £120 million.

Before dealing with the details of the Bill, I should like to review the work of the corporation and to describe the various credit facilities which they offer to the agricultural industry. The Agricultural Credit Corporation were one of the first public enterprises established in this country, being set up by the Agricultural Credit Act, 1927. Over the years, they have played a significan role in promoting Irish agriculture and their total investment in the in dustry now exceeds £65 million.

The corporation's business expanded dramatically during the past five years coinciding with the vast improvement in the prospects for agriculture in the European Economic Community. Total advances by the corporation increased from £6 million in 1968-69 to £29 million in 1972-73. The expansion continues in 1973-74 and total advances for the year could reach £50 million. The EEC now provides about 30 per cent of the credit used by farmers.

Deputies will be interested to know where the corporation get their funds. The main items in their balance sheet at 30th April, 1973, the end of their accounting year, were £6.7 million share capital owned by the Minister for Finance, £7.7 million in repayable advances from the Exchequer, and £41 million in deposits from the public.

Deposits have provided most of ACC's funds during the past few years. The deposits scheme which began in 1965 has been very successful. The inflow of deposits was so buoyant in the years 1968-69 to 1972-73 that receipts from deposits plus repayments on existing loans were sufficient to finance the corporation's entire lending programme. The inflow of deposits has not kept pace with the expansion in lending this year, with the result that the corporation have to look elsewhere for funds. To supplement their own resources, the Exchequer is giving them a short-term loan of £8 million and the corporation may have to borrow a further £8 million from abroad.

Turning now to loans available, the corporation provide a very wide range of loan facilities. They give loans to farmers for livestock, land purchase and improvement, erection of farm buildings and dwelling houses, and the purchase of farm machinery, seeds and fertilisers. Livestock loans are the major element representing 42 per cent of total ACC advances in 1972-73.

The period of repayment varies. For example, maximum repayment periods are five years for livestock loans, 15 years for loans for land purchase and improvement, 20 years for farm buildings and 35 years for farm dwellings. In addition, merchants can get short-term loans to enable them to give seeds and fertiliser to farmers on credit at spring time and to finance the purchase and storage of grain at harvest time.

In recent years, many firms in the food processing industries are turning to the ACC for capital. Hence the ACC are contributing to the expansion and modernisation of many creameries, meat factories and grain mills. During the past year the corporation—as well as the commercial banks—took part in a temporary scheme of loans for farmers at subsidised interest rates. The object of this scheme which began in June, 1972, was to help smaller farmers to increase their livestock numbers in order to benefit from EEC membership. The loans were advanced by the ACC and the commercial banks and the Exchequer pays an interest subsidy of 4 per cent. The scheme will end shortly but I mention it because it enabled farmers to obtain £4.0 million at low interest rates to buy stock and it also served as a useful introduction to the concept of interest subsidies which will form part of the EEC farm modernisation scheme.

During the past year the ACC also became associated with the World Bank Loan for livestock development. This loan of £10 million is channelled through the ACC for relending to farmers by both the ACC and the commercial banks. The loans, which are given to farmers who follow an approved development plan, are available for long-term investment in livestock programmes. A preferential rate of interest applies 11¾ per cent at present, and the loans are repayable over a period of 12 years.

I have given a brief outline of the work of the corporation. Deputies will see that the volume and nature of ACC business have expanded considerably. To cope with this expansion the corporation recently adapted their management structure and installed a modern accounting and data processing system. They also extended their area organisation in order to bring their facilities within easy reach of farmers and to ensure that their officials are in close contact with local problems.

Looking to the future, it is likely that the demand for credit for agriculture will remain high over the next few years. Farmers will need credit as they continue to adapt their enterprises, improve their land, buildings and equipment and increase their livestock numbers to exploit the market opportunities available in the European Economic Community. It is true that because of their higher incomes farmers will themselves have more funds for re-investment in their holdings, but, nevertheless, a substantial gap will remain which must be filled by borrowing from sources such as the Agricultural Credit Corporation.

This is the context in which I am presenting the present Bill to the House. While the corporation can count on annual receipts of £15 million from loan repayments, they would have to borrow about £30 million to finance an annual lending programme of £45-£50 million. Their total borrowings at present are close to the permitted maximum of £70 million. I propose, therefore, to increase the statutory maximum to £120 million. Section 2 of the Bill provides accordingly.

Borrowings by the corporation may be guaranteed by the Minister for Finance. The maximum of such borrowings which the Minister can guarantee under existing legislation is £70 million. To bring this into line with the new borrowing limit, section 3 of the Bill empowers the Minister for Finance to guarantee ACC borrowings up to a maximum of £120 million.

Sections 4 and 5 of the Bill relate to charging provisions which apply to lands offered as security for small loans. These provisions were put into the 1947 Act to speed up the issue of loans. Existing provisions apply to loans up to a maximum of £2,000 which was fixed in 1965. To take account of the decline in money values, I now propose to increase this maximum to £10,000. Sections 4 and 5 make this change.

Finally, section 6 of the Bill enables the corporation to make whatever changes are necessary in their memorandum and articles of association as a result of other clauses in the Bill.

This Bill will help the ACC to cope with the expanding demand for credit for agriculture and in this way enhance the prospects and progress of our agricultural industry. I recommend the Bill for the approval of the House.

In our present circumstances as a member of the EEC, with the development in agriculture which has already taken place as a result of that membership, and with the vast potential which still exists for further development of the agricultural industry, it would be true to say that there is no more important source of investment from the point of view of the economy than the agricultural industry. This importance is enhanced even further by reason of the possible dire consequences of the oil crisis. I say that because, although we all hope it will not happen, it would be unrealistic not to take account of the possibility that developments in the oil crisis may well have a very serious effect on manufacturing industry, in which event both the community and the economy as a whole would become even more dependent on the development of agriculture.

For all these reasons the Minister can rest assured that this side of the House is fully in favour of the proposals in this Bill, proposals which will enable the Agricultural Credit Corporation to supply an even greater flow of funds to the agricultural industry to enable it to develop further. One of the major problems in regard to investment in agriculture is that the actual amount of money required, which would give a very good return, is enormous. I am speaking now in terms of the money that could reasonably be envisaged as being required in the next two or three years. This money is by no means all coming from, or intended to come from, the funds of the ACC. As the Minister has indicated, the improved income of farmers is assisting as a source of investment in agriculture, but it is not, of course, sufficient. Other sources are required. The commercial banks have been investing fairly heavily in agriculture. But the most important source and the one geared specifically to the requirements of the agricultural industry is the ACC.

I concur in what the Minister said about the activities of the ACC in recent years and about the success which has attended its efforts. The figures he gave indicate a very substantial expansion in the business of the ACC in a relatively short time and, subject to certain complaints which, I think, one will always get in relation to any lending institution, it is clear that the ACC has handled this very rapid expansion in its business, in the demands on the ACC and the enhancement of the importance of the position of the ACC in our economy very efficiently indeed. In this connection, it would be no harm for us to pay tribute to the board and the chief executive of the ACC because of the efficient and expeditious way in which they have dealt with what could well have been a crisis situation.

The proposed increase in the amount which the ACC may borrow might seem on the face of it a very excessive increase, from £70 million to £120 million, but I do not think it is excessive. Indeed, if any criticism were to be made of it, it would be that it is too small. This is because the rate of expansion in the last year or two has been and very likely in the next few years will be far greater than it ever was over a long period in the past. I would expect that it will be necessary to bring before this House in the not very distant future another Bill to raise the limit above the £120 million proposed here.

It also seems to me that the increase in the limit in respect of what were regarded as small loans, and the provisions laid down in an earlier Act to speed up the procedures, from £2,000 to £10,000 is certainly not unreasonable having regard to the value of land today and to the fall in the value of money. Consequently, as far as these provisions are concerned, we on this side of the House fully support them.

There are, however, a few matters on which I hope the Minister will expand a little further when replying to this stage of the debate. First, I had hoped when he was introducing this stage that he might be a little more specific as to what is happening in regard to deposits. He has given some indications but they are not quite clear, and perhaps he would spell them out for us. If I may quote from the Minister's speech, he says:

The inflow of deposits was so buoyant in the years 1968-69 to 1972-73 that receipts from deposits plus repayments on existing loans were sufficient to finance the corporation's entire lending programme.

That statement is perfectly true, and this was my own experience as Minister for Finance up to March of this year. The inflow of deposits was very buoyant, and certainly there was no drain on the resources of the Exchequer as far as the ACC were concerned because of this, and it was a very welcome development. However, the Minister goes on to say:

The inflow of deposits has not kept pace with the expansion in lending this year, with the result that the corporation have to look elsewhere for funds.

That could, of course, mean one of two things: it could mean that the flow of deposits is increasing at the same rate as in the past but, nevertheless, that the demands for lending are increasing at a much faster rate and, therefore, there is this gap to which the Minister referred; alternatively, it could mean that the flow of deposits is not increasing at the rate at which it was in the past or, indeed, that it might be decreasing. The Minister's statement does not make this clear, and I hope he will let us know what has been the pattern in regard to deposits in the ACC since the beginning of this financial year, in other words, since 1st April. It is a matter of some importance that we should have this information and know what is the attitude of investors, particularly in this vitally important industry of agriculture, vitally important as it has always been but even more so for the reasons I mentioned at the outset. The Minister goes on to say:

To supplement their own resources the Exchequer is giving them—

—that is, the ACC.

—A short term loan of £8 million, and the corporation may have to borrow a further £8 million from abroad.

I wonder if the Minister could indicate in regard to the short-term loan, first, how short is it—in other words, are we talking about a period of months or a period of years—and whether it is a sum which he had not provided for in the public capital programme. There have been indications under other headings which I shall not go into here—I probably would not be in order in doing so—of substantial changes in the amounts required for the public capital programme from the programme as published by the Minister early this year. We would like to know, therefore, whether or not this sum of £8 million was a part of the published public capital programme or whether it is an addition to it.

Furthermore, in regard to the Minister's reference to the possibility of the corporation having to borrow a further £8 million from abroad, there are two matters I should like the Minister to clarify. First, I should like to have the Minister confirm that the ACC are enabled to borrow abroad without any legal difficulties. I am pretty certain that is the position. The Minister will be aware that there are certain State-sponsored bodies who have legal difficulties in borrowing abroad and that we have to make special statutory provisions in regard to some of them to enable them to do so. As far as I can recall, the ACC are not in that position, but perhaps the Minister would confirm for me that there is no problem from the point of view of the ACC borrowing abroad.

In relation to the second point I wish to raise on borrowing abroad, the Minister referred later to the World Bank loan for livestock development of £10 million being channelled through the ACC for relending to farmers both by the ACC and the commercial banks. Could the Minister indicate whether the World Bank loan to which he has referred is separate from and over and above the possible £8 million abroad to which he has referred in his speech?

As I indicated earlier, there are complaints from time to time about the ACC either refusing to lend money when the borrower thinks they should do so or, in other cases, and very often coming from the same kind of person, complains that they have lent money or an excessive amount of money to people who, in the view of the complaint, should not have been lent money. I believe that these kinds of complaints are inevitable in dealing with any lending institution. I cannot say, of course, with certainty, that none of those complaints is justified, but I can say from my own experience of the ACC and from some investigations which I carried out into certain complaints of that kind, I do not believe that the vast bulk of such complaints is justified.

I believe that the ACC have handled an extremely difficult and potentially chaotic situation extremely well in recent years. As far as we are concerned, anything that can be done to provide more money through the ACC for the agricultural industry and to assist the ACC to become even more effective in dealing with the credit problems of agriculture will have our full support. We regard this Bill as being in that category, and consequently it has our full support.

This is possibly one of the most important financial provisions that has been brought before this House. It is somewhat overdue. It is dealing with one of the main sources of finance to the largest industry in the country. We are living in a very rapidly changing world, particularly in relation to the agricultural sector. The main problem in agriculture in Ireland is generally agreed to be one of starvation of capital and, following on recent thinking, a certain starvation of thought on how to use capital in agriculture properly.

I have been somewhat of a critic of the Agricultural Credit Corporation. I am not so much a critic now, but I still reserve my right to criticise where I feel it is proper to do so. However, in relation to this proposed authority to extend borrowing, it is notable that deposits have provided much of the ACC's funds during the past few years; in other words, it has been left to the public to finance agriculture. In relation to the £41 million deposits, I would like to know the proportion of people in the agricultural sector who have provided those deposits. My feeling is that a large part of those deposits comes from the agricultural sector, and it is likely now that with the increased demands on finance for agriculture there will be a lesser amount of deposits coming from the agricultural sector because the farmers will be utilising the money that they would otherwise deposit with the ACC.

As the types of loans have been referred to by the Minister I think I would be relevant in dealing with loans and types of loans. The Minister said that money has been made available from World Bank sources for livestock development. Certain Press comments and articles have indicated that this money will be made available to the agricultural community and one interesting suggestion—I do not know if it is true or not—is that there should be a moratorium in relation to the repayment of loans. That is a very vital aspect of lending in agriculture. Any of us who have association with agriculture know that when money is put into agriculture it requires some time to produce the return to repay or finance the loan particularly where agriculture is very short of capital. Possibly it will take longer to repay and the borrowing will possibly be correspondingly costly in relation to the operation of that farm. It is really a matter of taking the farm up off its knees, making it stand upright and it has to walk after that. This may be a poor analogy but I am trying to explain the problem. I would, therefore, welcome any policy in the ACC which would provide a moratorium both in regard to repayment of capital and payment of interest. If there was such a provision the utilisation of the borrowed money would be far more beneficial.

At present we are probably dealing with larger units in borrowing from the ACC. I have not been long in the House but I have had the slightly unfortunate experience of dealing with larger sums of money and I must confess that I have found a slight lack of co-operation between the banking sector and the ACC. This may be due to a misunderstanding in the past: I know there have been difficulties concerning bridging finance where the ultimate finance is being produced by the ACC. This has created difficulties and for want of a better phrase there is a slight air of tension between the banking community and the ACC. I should like to see that disappear and I should particularly like to see the utilisation of a document known as apari passu agreement. This is a very useful document in finance and is used quite frequently in big property developments where various banking sources are providing money. It means that neither lender has priority. There could be a situation where one source of finance has lent money and taken the security of the farmer, say, his title deeds. The farmer wants more money but the source of finance is not prepared to give further accommodation. A second source is. If the pari passu document is used second-line finance would be available and could deal with difficult situations, areas of pressure, whether on the side of lenders or borrowers.

Another matter that has created a little surprise is this. There is a document of security known as a bill of sale where you are dealing with a chattel. A chattel mortgage is a very simple document which does not give rise to many legal technicalities. We now have a situation where you have herd numbers and stock numbers under various schemes but our law at present appears to be that the granting of a bill of sale is illegal. That is an extraordinary situation when there is a large cattle population, when the cattle can be identified for the purposes of a bill of sale but our premier lending institution cannot use a bill of sale nor can any banking institution do so. It is prohibited, as I understand it, by one of the Agricultural Credit Acts. Amendment of that part of the law is long overdue. Such a document is available on the continent and in America. Ireland is an agricultural country. Why have we this block or embargo on an easy system of lending money and providing security to the lender? I was a bit puzzled about Deputy Colley's remark in regard to the ACC dealing with a potentially chaotic situation. He did not expand on that. Possibly some member of his party may explain what was behind it.

Coming from a constituency where agriculture is of paramount importance I should like to join with other speakers in welcoming this measure. I would also like to join Deputy Colley in paying tribute to the Board of ACC, its executive and staff, on the magnificent, indeed amazing, job they have made of the ACC in recent years. I join with the Minister when he says that the ACC have played a significant role in promoting agriculture. Their total investment in the industry now exceeds £65 million. When the ACC were first established their lending was in mere thousands of pounds. Last year they spent £29 million and this year's estimated figure is £50 million. That is a really remarkable achievement but when that figure reaches about £100 million per year we shall then be playing the part we must play in regard to investment in agriculture.

Like Deputy Colley I should be very disappointed if there was any falling off in deposits from the general public in the ACC. As the Minister said, they have received £41 million in deposits from the public. This was one of the remarkable successes of the ACC, that they were able to get, particularly from farmers—that is where that money should really come from—and from the general public that sum in deposits. It would be a great pity if there was any falling off.

The Minister said the Exchequer is giving a short-term loan of £8 million and that the corporation may have to borrow a further £8 million abroad. I would be slightly worried about this type of borrowing which could very well mean that interest rates would be very high, possibly too high for the agricultural community.

The Minister says that in recent years many food processing firms are turning to the ACC for capital. I have noticed this. I have been told that very large sums have been invested in this type of firm. I would consider that this industry might possibly be financed from some other source. I agree that the food processing industry and other industries allied to agriculture are of vital importance but the financing of this type of industry might be undertaken by the IDA —I am sure they do assist to some extent—or some other body.

The Minister said:

Looking to the future, it is likely that the demand for credit for agriculture will remain high over the next few years.

There is no doubt about that. The demand for investment in agriculture will certainly be very high. I have mentioned a figure of £1 million per annum. I believe that in the next five, six or ten years this could well be a minimum figure.

I join with the other speakers in welcoming this Bill and I should like to pay tribute to the board for a job well done. They have done a wonderful job over the past four or five years. Their work will certainly be very essential to the nation during the next few years, especially now that we are in the EEC and that agriculture is playing such an important part and will play a much bigger part in the economy over the next few years.

I should like to join with other speakers in welcoming this Bill, the purpose of which is to increase the statutory limit on borrowing by the ACC. The figures outlined by the Minister indicate the faith the ACC have in the agricultural industry. It is important that credit should be available to our farmers so that they can avail of the many schemes in existence and make the maximum profit from their land. Some years ago farmers would not dream of asking for credit, particularly small farmers in the west. They were always afraid of credit. In recent years we have seen a big change in this regard and now big and small farmers are prepared to go to the bank or to the ACC and avail of the facilities offered to improve the output from their land, to improve their farm buildings or dwelling houses. This is very important but it is also important that when getting credit the farmers should have advice available to them on how to use this credit. In the last 12 months farmers were advised to avail of credit. They purchased livestock last spring at very high prices. They also took land at very high prices. It was no problem to get £40 and £50 per acre for grazing land, even in the west. Now we see what has happened to the cattle industry. Farmers are left with a large number of cattle on their hands. They cannot sell them because of the fall in prices.

It is important that farmers availing of credit facilities should be advised on how to spend the money and have a proper farm plan drawn up for them by their agricultural advisers or somebody from the ACC or wherever they are getting their credit. It is a cause of great worry to farmers that after borrowing money and paying a very high interest rate, buying cattle at a very high price, taking land on the 11-months' system at a very high price, at the end of the year the bottom has fallen out of the market and they are left with stock on their hands or have to sell their stock at a loss. This is a serious situation and it is one I am afraid that we have at present.

I should like to refer to the temporary scheme that was brought into operation last year. It was a scheme of loans at subsidised interest rates, mainly to help farmers who were affected by the brucellosis scheme and had to dispose of affected animals and replace them later. The Minister said that it is proposed to finish the scheme very shortly. I would ask him to reconsider this because at present some counties in the west are only beginning the brucellosis scheme. In County Galway it only began this year and present indications are that a very large number of cattle in Galway are affected by brucellosis. A few weeks ago a farmer not too far from my own home had 25 cows turned down. This is a great loss to farmers. Not alone can they not sell or freely move livestock during a 90-day period but they are also at the loss of the milk they would normally be sending to the creamery. I would ask the Minister to continue this loan scheme for a further period. It is very important that people should have money to replace such cattle. It was an excellent scheme which helped many farmers in other counties who were fortunate enough to have been in the scheme earlier. It would be disastrous, particularly for western farmers, if this scheme were to be finished now and if they had to borrow money to replace cattle at a very high interest rate. I would ask the Minister to continue this scheme until such time as western counties are cleared because farmers there would not be able to avail of credit facilities from other institutions and pay interest rates of 11, 12 and 13 per cent.

I am grateful to the House for the manner in which they have received this Bill. Throughout this debate and all debates these days on money availibility the crucial question is that of interest. We had Deputies on both sides of the House naturally complaining about the high rates of interest which borrowers are required to pay. At the same time we have continuing anxiety about the shortfall in the flow of money into organisations such as the ACC where, unfortunately, the buoyancy which in recent years was displayed in deposits has not been maintained this year. I think we will be lucky if we achieve a rate of deposits this year comparable with last year. Because of the massive growth in lending by the ACC this year the normal rate of deposits, even with the buoyancy displayed in recent years, would not be adequate to feed this colossal and very legitimate demand which exists for credit. Last year the total amount of loans from the ACC was £28.9 million. The corresponding figure for this year will be £45 million. Even if there was not the considerable slowing down in the rate of expansion of deposits it would not be easy to feed this new demand. We consider this to be a top priority.

That is why, in addition to the original public capital programme we have paid an additional £8 million to the Agricultural Credit Corporation. We cannot think of any more important investment in this country at present than agriculture and we will make every effort to feed that legitimate demand in the belief that we will get the best return from it. That would be true in normal circumstances but, as Deputy Colley pointed out, we now face a potentially very dangerous situation in industry which is more dependent on oil than is agriculture so that we will need everything we can get from agriculture in order that we might maintain some kind of decent economic and social prospects at home. However, we cannot overlook the fact that agriculture, too, is dependent on oil to a large extent. Certainly, it is much more dependent on oil now than it was 20 years ago and, as the Minister for Transport and Power has indicated already, the Government will consider agriculture to be a priority area. In relation to the use of oil in agriculture there is a greater return for every gallon used than there might be from some other activities.

Because of the need to increase the flow of money to the ACC through deposits we have taken steps recently to increase the interest rates and shall continue to look at the position as circumstances require. It is easy to get money if one offers very attractive terms. One of the great pities today is that there are many schemes offering people very high rates of interest but perhaps people are not aware that the security offered for their investment might be illusory, whereas a body such as the ACC have the guarantee of the Minister for Finance so that money is always repayable. There have been such a multitude of new temptations being offered to people in recent times both here and abroad that people are not as prudent as they used to be in looking for security for their money. I can only express the hope that nobody will have his fingers burned but anyone who might have that experience will have learned his lesson, that is, that when very high rates of interest are offered there is probably some risk involved. Therefore, the wisest thing in the long run is to invest in organisations such as the ACC which are secure and which spend any money they borrow in worthwhile investments to the benefit of our economy. Some of the investments that have taken place through private organisations are highly speculative and probably socially disadvantageous.

About 50 per cent of deposits in the ACC come from farmers. In recent years the great buoyancy in deposits has arisen from the fact that the ACC have offices distributed throughout the country and also because farmers in some cases now have money over and above their normal spending requirements which they can invest in the ACC.

I was asked what was the term of the Government short-term loan of £8 million. It is for four years and, of the £8 million, £4 million is at 11¼ per cent and the other £4 million is at 12¼ per cent. Deputy Esmonde spoke of the desirability of having a moratorium after the issuing of a loan. This is legitimate particularly in agriculture where the prospects of getting an immediate return are slight. There is a four-year moratorium on World Bank loans in respect of the principal, that is to say that no part of the principal will be paid for four years after the issuing of a loan although the interest would be payable. For normal ACC loans there is a moratorium of a year and a half.

I can understand the dissatisfaction on the part of some people regarding the requirements of the ACC in respect of the security required before a loan is given. As any prudent person knows, when giving a loan one must ensure that it will be repaid. In most cases the ACC are justified in reservations they may have about would-be borrowers. I have brought to the attention of the ACC any cases that have come to my notice and these have been dealt with sympathetically. The Minister for Finance often receives information in confidence which justifies the ACC refusing a loan. Such information would not be given by the applicant to his TD or whoever he approached in connection with the loan and neither would it be fair for us to give any such information to the person making the representations. By and large the ACC bend over backwards to assist farmers. They are not unreasonable and when they refuse credit it is often in the best interest of the would-be borrower because nothing would be worse than to give a person money which he could not repay.

Deputy Hussey raised the question of the termination of the existing scheme for small farmers. This scheme receives a subsidy of 4 per cent in order to reduce the rate which must be paid on borrowings. At the time of its introduction it was indicated that the scheme would be of short duration and that it would be tailored to the immediate requirements and opportunities of the EEC. It will not be terminated until the new farm improvement scheme—EEC related—is introduced. That will be as and from the 1st January, 1974. Then there will be a subsidy of 5 per cent so as to cushion the load of interest which the farmer will have to pay. Therefore, it is a question of replacing an old scheme with a better one and one of longer duration.

Deputy Browne mentioned that £50 million was a generous amount but that perhaps £100 million would be required. I do not disagree with that sentiment and I have acknowledged already the massive demand that agriculture is making on our available money. We will make every effort possible to meet that demand. The Deputy mentioned also that it might be more appropriate that some of the industrial concerns that are obtaining money from the ACC would seek their money elsewhere. That is a matter we have discussed with the ACC and with other agencies. It is legitimate and, perhaps, desirable to dovetail basic agricultural activity into industrial activity. The borderline between what is essentially an agricultural and what is essentially an industrial process is often very hard to distinguish. It might be compared to the difference between a bald man and a man with a head of hair—one does not know how many hairs he must lose before he is bald. However, we would like to think that the ACC would concentrate on the traditional farming activities rather than become too involved in what are essentially industrial processes. We must accept that there will be a mix. I accept what Deputy Browne has said and I think the ACC are alive to it. I believe I have covered the items which have been of some concern and interest to the Deputies.

I should like to join with the other speakers in commending the chairman, the board of the ACC, and their staff, for their great skill and dedication which have certainly borne fruit to the great advantage of the farming community in recent times. As we know this organisation commenced operations in 1927 and the people who gave birth to it could never have visualised it becoming the massive organisation which it now is. As recently as ten years ago this organisation was advancing only 10 per cent of the credit required by the agricultural community but today it is advancing 30 per cent and is still growing.

Deputy Esmonde mentioned that there is a certain tension between private banks and the ACC. It is likely that as long as we have free competition in the money market we will have rivalry—I prefer to call it rivalry rather than tension—but we must commend the ACC, and the whole banking system, for their readiness to co-operate with one another. This has become very obvious in recent times and it is a clear indication that ACC is now accepted as an established and legitimate creditworthy organisation which is serving a very useful social and economic function. We believe that there is a place for them, and for the private banks, and that through working together the farming community will be able to obtain all the credit which they can reasonably use in the foreseeable future.

I missed a part of the Minister's reply and for that reason I would be obliged if he would clarify for me if the scheme whereby farmers can obtain credit at a reduced rate for replacing livestock is to be replaced by a new one?

That scheme will be phased out because it was intended to be of short duration. However, as and from the 1st January we will have the new EEC farm moderinsation scheme under which loans will be available at a rate which will be subsidised to the extent of 5 per cent. While there is a different mix between the requirements in relation to the two loans, the small farmers Deputy Hussey has in mind will be able to get considerable benefit out of the new scheme. It is not a question of cutting off all sources of money.

But the interest rate will not be as attractive as the old scheme and therefore farmers in the western counties now being cleared of brucellosis will be penalised.

Unfortunately, as the Deputy is aware, world interest rates today, if one is a borrower, are not as attractive as they used be. On the other hand they are very attractive for a lender. We live in a world in which interest rates are rising everywhere and it is not possible, if we are to survive, to cut ourselves off from the rest of the world. We are one of the most open economies in the world. This EEC scheme will provide an interest-subsidy of 5 per cent and that is no small amount these days.

I do not think the Minister, when he was replying, gave any figures or an indication of the trend in relation to deposits with the ACC. I believe the Minister did say that he thought we would be lucky if we achieved deposits this year comparable with last year. The Minister will recall that I asked if he would give an indication, either by figures or by trend, of the deposits with the ACC since the beginning of this financial year as compared with last year.

It is very difficult because, as the Deputy is aware, the end of the accounting year is April, but present indications are that the rate of deposits has fallen off. In order to meet that we have increased the interest rates and we hope that before the end of the financial year the deposits will be comparable to what they were last year.

Has the Minister any figure to indicate the extent of the falling off?

I have not.

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