asked the Minister for Finance whether the policy pursued by the banking system last year, by which credit to farmers was greatly expanded, has had a significant effect in bidding up the price of cattle to unrealistic levels; and whether in view of the recent decline in cattle prices, which has left many farmers heavily in debt, he will consider instructing the Central Bank to exercise a more cautious policy in future with regard to the control of credit to ensure that it will be used primarily for genuinely productive rather than speculative purposes.
Ceisteanna—Questions. Oral Answers. - Cattle Prices.
12.
Cavan) (for the Minister for Finance): The Central Bank has informed me that it is unlikely that the price of cattle in the past year was influenced to any significant extent by the expansion of credit.
The importance of reserving credit for productive purposes has been continually stressed in recent years. As the Deputy may be aware, the Central Bank in its recent statement on monetary policy has again emphasised this aim. The commercial banks are being required not to permit any net increase in coming months in lending for non-productive purposes or to allow any lending for speculative purposes.
13.
asked the Minister for Finance if, in view of the present crisis in the cattle trade, he will state the representations, if any, he has made to the Central Bank regarding the repayment of loans by farmers; whether he will consider imposing a moratorium or other form of relief on farmers' debts at present; and if he will make a statement on the financial implications of the crisis for the farming community.
(Cavan): I am aware that because of cattle prices returns to farmers are below expectations at present. I can assure the Deputy that my colleague the Minister for Agriculture and Fisheries and the Government as a whole are keeping this matter under close observation.
On the question of credit the Deputy will recall a recent statement from the Central Bank setting guidelines to ensure that all additions to credit are reserved for productive purposes. I am informed by the Central Bank that when formulating this statement of monetary policy they were fully aware of difficulties being experienced by farmers in repaying loans. I am also informed that when dealing with individual customers the banks will treat them with sympathy and consideration. In these circumstances I do not think that it is necessary for me to intervene.
Is the Minister aware that at present, because of the disastrous situation in the cattle trade, there are literally thousands of farmers in very dire straits? Have the Government nothing to offer them except the platitudes we have heard in the Minister's reply?
(Cavan): I replied to the question put to the Minister by Deputy O.J. Flanagan who asked whether representations would be made to the banks. From information available to the Minister, he is satisfied that the banks are dealing with farmers in a sympathetic way in regard to repayments.
Surely the Minister must be aware that it is not sympathy the farmers are looking for but hard financial advantage in order to help them out of the difficulties that have been created for them by the Government?
(Cavan): That would appear to be a separate question and not one arising out of the question put by Deputy O.J. Flanagan.
As well as dealing with existing bank debts, could the Minister say what provision will be made or facilities given, from the point of view of interest rates, to those farmers who must now, according to the advice given to them by the Government, make provision for feedingstuffs for their cattle which they must hold in the months ahead? Is there provision being made to ensure that farmers who are unable to sell cattle and who must hold them will be considered from the financial point of view so that they will be able to buy feedingstuffs to keep their animals alive?
(Cavan): Again, that is a separate question to the one put down by Deputy O. J. Flanagan which deals with existing debts.
We are hair-splitting on this.