Land Bond Bill, 1975: Second Stage (Resumed).

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

Minister for Lands (Mr. T.J. Fitzpatrick,

Cavan): In the course of my speech introducing the Bill on 19th March and again in the course of my concluding remarks I pointed out that the Bill is an enabling one, to enable the Minister for Finance to create a further issue of land bonds to the extent of £20 million in nominal value should he so wish. As of now the ceiling for the creation of land bond issues is £40 million and with the creation of the issue of £1 million in 16 per cent land bonds earlier this year the ceiling of £40 million has been reached.

The Bill proposes to give authority to the Minister for Finance to create further issues of land bonds not exceeding £20 million. As I have gone to some trouble to point out, it is an enabling measure. The Minister may, if he so wishes, create further issues of land bonds to the extent of £20 million or he may not create any further issues. In the course of the debate certain criticisms were levelled at land bonds. It is fair to say that no one in the Opposition argued that land bonds could be done away with immediately. Deputy Callanan and Deputy Carter, in particular, realised that this was not possible.

I was requested to phase out land bonds. In the course of my remarks I told the House that I was engaged in the operation of phasing out land bonds and that I was anxious that the day would come when all land purchased by the Land Commission, compulsorily or voluntarily, should be paid for in cash but I emphasised that in the prevailing economic climate it was not possible to move from land bonds into cash in one step. Since I became Minister for Lands I feel I have made very considerable progress towards substituting cash for land bonds. In 1972-73 only £225,000 was provided by the former Government and £100,000 of that was borrowed from the salaries account, which meant effectively only £125,000 was provided by the Exchequer under the heading of "Land Purchase, 1972-73".

In 1973-74 the House voted £1 million for the purchase of land in cash and for this full year of 1975 we have available for the purchase of land under the retirement scheme and on an ordinary voluntary basis approximately £3,800,000 in cash. It is necessary to repeat that the amount that is provided for the purchase under the retirement scheme is, of course, provided by the Irish taxpayer and no amount of the purchase price of land comes from the EEC Fund. It will be agreed, therefore, that while we have not got away from land bonds altogether and while it is necessary to continue them, we are moving in the direction in which we all wish to go.

I do not intend to spend very much time dealing with the retirement scheme but it is proceeding nicely and even in this year will make a very worthwhile contribution towards the creation of a pool of land for the relief of congestion. I told the House the last day that applications under the scheme total 1,200. It is important to note that 88 cases have been processed to the price stage and price has been agreed in 88 cases. These 88 cases cover 3,329 acres of land, approximately one-sixth of the total intake of land in a normal year. That is considerable progress under the scheme in the first year of its existence. It came into operation on 1st May, 1974, and that is the amount of land that we have agreed to purchase for cash. Therefore, we are making progress towards the substitution of cash for land bonds. The retirement scheme is now moving smoothly and I believe that before this year is out we will have more than doubled the number of cases I have just mentioned and that we will have finally processed those.

There is another point that I should like to deal with. During the debate it was conceded by members of the Opposition, particularly Deputy Lalor and other Deputies who have experience of speculation in land by persons who are non-farmers and it was common case in the House that there could not be much sympathy for persons of this sort and that they were being well enough treated when being paid for the land in land bonds. I have not the figures before me now but I drew the attention of the House to one individual who bought a farm in 1972, as an obvious speculation, and the Land Commission took over this farm and the price was fixed by the Appeal Tribunal this year. The individual in question is reputed to have paid £77,000 for the land in question in 1972, in an area where there was congestion. The Appeal Tribunal of the Land Commission fixed the price of that farm in 1974 or 1975 at £164,000. The Land Commission have now to give him, in accordance with law, £164,000 and he will get £164,000 in 16 per cent land bonds and I do not think any of us need shed any tears for him.

Mr. Browne

I should like to hear from them on that.

Mr. Lalor

Put it to the test.

Mr. T.J. Fitzpatrick

(Cavan): I do not want to spend an undue amount of time on my concluding remarks because I covered the ground fairly well on the last occasion. I am making a determined effort to phase out land bonds as quickly as possible. I demonstrated conclusively to the House that we have made significant progress in this regard in the past two years. Since this Government took office I have made more cash available for the purchase of land than the previous Government did in seven years. Every reasonable Deputy will accept that it simply is not possible to move from land bonds into cash in one step, particularly in current circumstances. Deputy Carter and Deputy Callanan conceded that.

A phasing out process is clearly the practical line of approach and, in adopting this, we must have regard to the size of the land structural problems which still have to be tackled and dealt with. I should like to put on the record of the House that, at the time of the 1971 Census—and these are the latest figures available—some 91,000 farms were being worked on a full time basis which were regarded as not being structurally viable. I am now speaking of family farms below the acceptable economic standard. That figure would include owners in the older groups who might wish to retire, some younger people who would want to follow a career other than farming, and a number of elderly unprogressive farmers, many without successors, who might not wish to avail of the retirement scheme and who would not be considered by the Land Commission as deserving to be dealt with by them.

Making due allowance for all these categories, there are still 46,500 farms, approximately, requiring to be brought up to an economic standard. There are 46,500 farmers at present who have not got sufficient land and the Land Commission are satisfied that they would make good use of more land if they got it. It is the task of the Land Commission to deal with those 46,500 uneconomic but progressive farmers. Faced with a task of that magnitude, the Land Commission must be able to make use of all financial resources available to acquire extra land to bring small holders up to an economic standard.

I have spoken about the retirement scheme and I think it will play a useful part but alone it will not be sufficient to deal with the land problem. I say that because the retirement scheme is confined to farms containing 45 adjusted acres which, in most parts of the country, could be up to 60 or 70 acres. Except in very exceptional circumstances, the retirement scheme does not cater for the larger farmers. It does not deal with the speculator. It does not deal with large farms which are not being properly worked and which are not producing sufficient to warrant their being left with the owners. It does not deal with the farmer who goes to England or America and intends to stay there for, perhaps, ten, 15 or 20 years until he thinks it is time for him to retire.

We must still rely on the traditional machinery of the Land Commission to acquire such land by a compulsory process. It has been agreed in the House that some of these cases would not warrant payment in cash provided by the Irish taxpayer at a time when cash is a scarce commodity, at a time when we must have strict regard to our priorities. Therefore, we will have to continue for some time to come to rely on land bonds to deal with that sort of case.

I hope that, year after year, in addition to the amount of money available under the retirement scheme, we will have a substantial amount of cash and a progressively greater amount of cash available to purchase land from farmers on a voluntary basis. I concede that there are many cases in which hardship would be involved in payment in land bonds. A man might want to sell one farm and buy another or he might want to sell to the Land Commission in order to settle some members of his family. It would be desirable to have cash available in such cases and, as time passes, I hope we will have cash available to deal with that sort of situation.

Members on the Opposition benches advocated the immediate abandonment of land bonds. Without introducing an acrimonious note into the debate, now that quiet has been restored, I cannot help reminding the Members opposite that in their 16 years in office they did little or nothing to provide cash instead of bonds. Indeed, any steps they took were in the opposite direction altogether. They extended the date on which land bonds might be redeemed from 1964 to 1984. They did away with the half annuities under the 1965 Land Act. Members opposite who call on me to abolish land bonds now—of course, not all Members opposite made that request —are asking me deliberately to curtail the land acquisition programme, a programme on which the Land Commission will be engaged for quite some time. If that programme were to be curtailed, quite a few of the 46,500 farmers now working uneconomic holdings would be left working those holdings. I do not think this was really a serious suggestion on the part of Members opposite.

I believe Deputy John Callanan's speech was the most common-sense speech made in the House. He conceded that land bonds could not be abolished and cash substituted at the present time. He went on to suggest a method of improving the present land bond system. I know he does not have all the necessary expert advice at his disposal to process properly his proposal that land bonds should be compulsorily redeemed in five to seven years. The effect of that proposal would be exactly what Deputy Browne complained about; if the redemption term were shortened from 27 years to five or seven years annuities would increase dramatically. That is the advice I have been given. I do not think Deputy Callanan had that in mind when he suggested land bonds should be compulsorily redeemed in five to seven years.

As a result of my experience in the Land Commission, I know that, apart altogether from the 46,500 small farmers requiring more land, there is a grave land shortage and uneconomic holdings are still a major problem in most parts of the country. Coming from a county of comparatively smallholders, like Monaghan, and having spent my professional life in another county of smallholders, Cavan, I thought I appreciated the extent of congestion. I now concede that I knew very little about the serious problem involved until I visited and studied conditions in the west. The genuine land hunger prevailing there has to be seen to be believed. It will be solved eventually only by a mix of more land and off-farm employment. So many people in the west are anxious to hold on to the land, even though they have not got sufficient land to give them a proper standard of living, that the only solution to the problem is the introduction of off-farm employment. My predecessor, Deputy Seán Flanagan, was of the same opinion. If we were to down tools now, as some of the arguments put forward during the debate would suggest we should, we would be letting these small farmers in the west down; we would be abandoning them to the speculators. I, for one, do not intend to do that.

In the last few years some progress has been made in dividing up commonages. Where agreement cannot be reached the only solution is to buy out objectors. Land bonds are essential for that purpose. I would appeal to Opposition Members to adopt a reasonable attitude in regard to land bonds. No useful purpose was served at the end of last year by telling the farmers their cattle would die for want of fodder. That only resulted in a panic situation in which many sold their cattle at gross under value. As things turned out, there was more than enough fodder and those who retained their stock are now selling at very satisfactory prices. To adopt the same panic arguments against land bonds at this time would damage the efforts of the Land Commission to provide an adequate supply of land for the 46,500 farmers I have mentioned.

On that note I commend the Bill to the House. I should like to say to Deputy Browne who is present that the Bill is urgent. The £40 million ceiling has been reached. The last £1 million worth of land bonds has been created and we cannot create any more until this Bill has been passed by both Houses. Therefore, I ask for the co-operation of the Opposition in this matter by giving me all Stages of the Bill this evening. The passing of the Bill will enable a further issue of 16 per cent land bonds—the best bonds ever introduced with the shortest redemption period—to be created and will enable us to take possession of more land. The land is available and, when taken over, will be distributed among some of the 46,500 farmers who are badly in need of it.

Mr. Browne

I apologise for the absence of our spokesman on Lands, Deputy Tunney, who is ill. Deputy Tunney has indicated already the reasons why we are opposing this Stage of the Bill. Apart from that, because of his absence, we would find it necessary to leave the remaining Stages until Tuesday next.

Question put.

The Dáil divided: Tá, 60; Níl, 56.

Tá

Barry, Richard.
Begley, Michael.
Belton, Luke.
Belton, Paddy.
Bermingham, Joseph.
Bruton, John.
Burke, Dick.
Burke, Joan T.
Burke, Liam.
Byrne, Hugh.
Clinton, Mark A.
Cluskey, Frank.
Collins, Edward.
Conlan, John F.
Coogan, Fintan.
Cooney, Patrick M.
Corish, Brendan.
Cosgrave, Liam.
Coughlan, Stephen.
Crotty, Kieran.
Cruise-O'Brien, Conor.
Desmond, Barry.
Desmond, Eileen.
Dockrell, Maurice.
Donegan, Patrick S.
Enright, Thomas.
Donnellan, John.
Esmonde, John G.
Finn, Martin.
Fitzpatrick, Tom (Cavan).
Flanagan, Oliver J.
Gilhawley, Eugene.
Governey, Desmond.
Griffin, Brendan.
Hegarty, Patrick.
Hogan O'Higgins, Brigid.
Jones, Denis F.
Keating, Justin.
Kelly, John.
Kenny, Henry.
Kyne, Thomas A.
L'Estrange, Gerald.
McLaughlin, Joseph.
McMahon, Larry.
Malone, Patrick.
Murphy, Michael P.
O'Brien, Fergus.
O'Connell, John.
O'Leary, Michael.
O'Sullivan, John L.
Pattison, Seamus.
Reynolds, Patrick J.
Ryan, John J.
Spring, Dan.
Staunton, Myles.
Taylor, Frank.
Timmins, Godfrey.
Tully, James.
Toal, Brendan.
White, James.

Níl

Allen, Lorcan.
Andrews, David.
Barrett, Sylvester.
Brady, Philip A.
Brennan, Joseph.
Breslin, Cormac.
Briscoe, Ben.
Brosnan, Seán.
Browne, Seán.
Brugha, Ruairí.
Callanan, John.
Calleary, Seán.
Carter, Frank.
Colley, George.
Collins, Gerard.
Connolly, Gerard.
Cronin, Jerry.
Crowley, Flor.
Kitt, Michael P.
Lalor, Patrick J.
Lemass, Noel T.
Leonard, James.
Loughnane, William.
McEllistrim, Thomas.
MacSharry, Ray.
Meaney, Tom.
Molloy, Robert.
Moore, Seán.
Cunningham, Liam.
Daly, Brendan.
Davern, Noel.
de Valera, Vivion.
Dowling, Joe.
Fahey, Jackie.
Farrell, Joseph.
Faulkner, Pádraig.
Fitzgerald, Gene.
Fitzpatrick, Tom (Dublin Central).
Flanagan, Seán.
French, Seán.
Gallagher, Denis.
Geoghegan-Quinn, Máire.
Gibbons, Hugh.
Gogan, Richard P.
Hussey, Thomas.
Kenneally, William.
Murphy, Ciarán.
Noonan, Michael.
O'Kennedy, Michael.
O'Leary, John.
O'Malley, Desmond.
Power, Patrick.
Smith, Patrick.
Timmons, Eugene.
Wilson, John P.
Wyse, Pearse.

Tellers: Tá, Deputies Kelly and B. Desmond; Níl, Deputies Lalor and Browne.

Question declared carried.

Dáil Éireann debate -
Wednesday, 9 Apr 1975