Agricultural Credit Bill, 1977: Second Stage (Resumed).

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

Broadly speaking, I have nothing but welcome for this Bill in that it is a consolidating measure, bringing all the law on the subject together in one statute and simultaneously bringing it up-to-date. It is welcome also in that it facilitates the operations of the Agricultural Credit Corporation, which has been a very successful body and has contributed magnificently to Irish agriculture, the expansion of which has been most remarkable in recent years. A particularly important aspect of the corporation's operations has been the very substantial amount of money they have been able to obtain on deposit from ordinary Irish investors placing their confidence in Irish agriculture by investing in the Agricultural Credit Corporation.

There are a few points on which I should like the Minister to comment in his reply. First of all, there is the question of the control of the chief officer's salary; the possibility that while it is controlled by statute the salary of other officers of the corporation are not so controlled, that a difficulty could arise in that subordinate officers—as a result of the provisions of section 19—could find themselves being paid more than their chief which obviously would be undesirable.

I should like the Minister to comment on the possibility of introducing, in addition to the credit facilities which are made available, a guarantee in some cases by the Government on loans taken out by farmers. I understand that approximately 10 per cent of loans available to farmers in Holland from agricultural credit banks are guaranteed by the Government. That is to make up for the fact that 10 per cent of the farmers in that country do not have sufficient collateral to act as security for loans, loans which would otherwise be desirable on all other grounds. In this country, with the high level of owner-occupancy of land, that problem is not as acute. But we are trying to encourage here the development of long-term leasing of land in which the farmer would not necessarily own the land he was working but would have a viable and substantial farming operation as the lessor of those lands. Therefore, he could not offer the land, which is owned by somebody else, as security for a loan. Indeed, he may not have very substantial numbers of chattels which he could mortgage either. If we are anxious to develop long-term leasing of land— and this is something that has been canvassed strongly in an inter-departmental committee report on land policy published in July—there may be a case for giving some form of guarantee on loans taken out by such farmers where it would appear that the security they can themselves offer would not be sufficient to meet the requirements of banking institutions for the extension of loans to them.

There is another point to which the Minister might give some attention. I refer to the provisions of the Agricultural Co-operatives Debenture Act, 1934. That Act provides that a floating charge cannot be imposed by a bank on a co-op without the consent of, I think, the Minister for Finance. That can, however, be done in the case of a loan granted to the co-op by the ACC. In other words, co-ops giving floating charges as security for loans obtained can only obtain such loans from the ACC unless they wish to seek the consent of the Minister. It is a difficult thing to obtain from an administrative point of view but not, perhaps, from a policy point of view. I would ask the Minister to take a look at the provisions of the 1934 Act in this respect.

Does the Deputy mean to remove the restriction in regard to grants or to remove the consent?

That would be the appropriate thing to do but naturally I would not wish to be dogmatic about it because there may be other reasons why this restriction is necessary. I am sure the Minister will agree that the situation of co-ops has changed considerably since 1934. Many of them are now very large institutions and one could afford to allow them to take greater risks in the matter of the liabilities they might undertake. In 1934 the movement was in its infancy and the confidence of farmers in respect of co-ops was much harder to obtain and therefore a greater degree of conservatism in the type of financial operation co-ops would be allowed to undertake would have been more appropriate then than it is today.

There is one very minor point in respect of the wording of the Bill. In section 3 there is a list of the matters covered within the compass of the term "agriculture". Cereal production or tillage in general do not seem to be specifically included. I am sure that has not caused a problem so far. If it did we would have heard about it. However, for the sake of clarity there is, perhaps, need to include these.

The rates of interest charged by the ACC are slightly higher, between 1½ and 2 per cent, than the rates charged by the commercial banks. It is well recognised the ACC has more favourable terms to offer to farmers in certain respects and it is well recognised by farmers that the ACC, with offices throughout the country and specialist knowledge to offer, is very sympathetic in its approach, but rates of interest are rates of interest and repayments are repayments and there are possibly grounds for seeking to bring interest rates down. This may lie behind the case made so very ably yesterday by Deputy D'Arcy for allowing the ACC to get into a full banking operation. Quite clearly the ACC could possibly make profits from that point of view on their operations and those profits would enable them to charge lower interest rates to their long-term borrowers equivalent to the rates being given by the banks. There may be other factors involved. I just comment on the position.

I understand it is considered by some that the provisions in relation to chattel mortgages are too severe and I would ask the Minister to have another look at these between now and Committee Stage to see if all the provisions in their full stringency are necessary or if we are, perhaps, playing extra safe, safer than is necessary.

With regard to the general availability of credit to farmers, the commercial banks have adopted a system of seeking to get farmers on to term loans where all liabilities have to be cleared by a particular day before a new loan will be issued. Now that is not appropriate to agriculture. Farming is a continuing operation, certainly livestock farming and milk production, and farmers are not likely to be in a position to extinguish long-term loans on a particular date each year or every three years. Liquidity will always be required and that liquidity calls for capital over a period, a longer period than the period offered for term loans. I understand the operation of this term loan system is causing considerable problems for certain farmers and I think overdrafts rather than term loans are more appropriate to farming. That is the system adopted by the banks in Britain. Why, I wonder, do our banks place such faith in the term loan system? Is it possible they hope farmers will stick to their repayments on the term loan rather than extinguish it if they are in credit thereby finding themselves with possible outstanding payments to be made on the term loan from the point of view of interest rates while, at the same time, they may be in surplus in their deposit accounts and the banks are therefore making a tidy profit from the farmer's unwillingness or his uncertainty resulting in his failure to extinguish the money due on the term loan? There may be a number of other reasons, possibly very worthy ones, the banks would advance for this system but I think this is something the Minister should look at in his overall responsibility for credit generally and his responsibility for the Central Bank. Is this practice of encouraging term loans desirable?

Generally speaking, I welcome the Bill. Any Bill which makes the expansion of agriculture through borrowing easier is very welcome. The long-term opportunities for agriculture are very considerable. We are a low cost producer of most commodities because of the temperate nature of our climate and in a competitive situation we can beat Europe. Credit is obviously necessary to do this and so the Bill and the operations of the ACC are to be commended.

(Cavan-Monaghan): Like previous speakers, I welcome this Bill. It is a consolidation Bill with the amendments set out in the Long Title introduced to update legislation which has been on the Statute Book for more than 50 years. Since this session of the Dáil began, this is the third occasion on which we have had legislation amending Bills introduced in the late twenties.

This Bill deals with the Agricultural Credit Corporation Bill, 1927. Earlier we had the Minister for Justice introducing a Bill to modernise Garda Síochána regulations introduced in legislative form in the late twenties. The Minister for Health introduced a Bill in this session to modernise the machinery for dealing with the medical profession, and it is not so long ago since we had a Bill extending the capital of the ESB. This series of Bills and other legislation always remind me of the trojan work done by the young Government that took over the running of the country more than 50 years ago, and on an occasion like this it would be ungracious of us, in 1977, when consolidating legislation introduced in 1927, if we did not place on record our appreciation of the work done in those days by that Government.

There is no doubt that the ACC have rendered great service to the agricultural community. Fortunately we are now living in an atmosphere when the farmer is welcome in any credit house, in any bank. I have put it on the records of the House already that it is not so long since he was not so welcome, when before approaching a bank he was filled with fear and anxiety. In those days he usually stopped 50 yards from the bank, took off his cap, rolled it up and put it in his pocket and still feared he would not be admitted or that his business would not be accepted. Those days have gone and it is a good job that it is so. The farmer is now welcome in all lending houses.

However, we should not forget that the ACC in their own way provided a lending service for the agricultural community when it was not really available to them elsewhere. I am glad to see from the Minister's opening speech that the business of the ACC has expanded by leaps and bounds since the beginning of the decade. We find in the speech that the ACC lendings amounted to only £5 million in 1965 and that by 1972 they had increased to £25 million. Last year they had reached £85 million and it is estimated that this year the corporation will lend £105 million.

By any standard that is very sizeable business, and inflation and the rest of it notwithstanding, it shows that since 1972 the activities of the corporation have quadrupled. It indicates substantial real progress. That substantial expansion is no more than a reflection of the confidence the farmer has in agriculture. It is evidence of the improvement our entry to Europe has brought about for our farming community and also of the trojan work done by the Minister for Agriculture in the last Government. It is significant that during the term of office of Deputy Clinton the lendings of the ACC, the investment by Irish farmers in agriculture, increased from £25 million to roughly £100 million, a most encouraging sign.

It is good to see farmers having so much confidence in their industry that they are prepared to borrow money to invest in it. We had a motion in the House last night, and it will be debated again tonight, dealing with a large industry introduced here by a foreign company. Though it would be wrong of me to seek to debate it now, and you will be glad, Sir, to hear I do not propose to do so, the fate of Ferenka shows how vulnerable large companies can be, how unstable they can be, and it emphasises the necessity to expand more and more industries based on our own raw materials. The Irish farmer is second to none in the world and, given the necessary technical advice and a capital, he can be relied on advantageously to use the land of Ireland which is more suitable for agriculture of the type practised here than any in the world.

It is good, therefore, to see that the farmer has confidence in his industry and that he is investing money in it. I should like particularly to salute the younger generation of farmers because they have more courage than their forefathers. The older generation of farmers were frightened of borrowing. They believed that it was not safe to buy something unless one could pay for it or had a substantial amount of the capital already saved. Young farmers are looking to the future with confidence. They see that they can earn money and repay loans which they secure and get a good living for themselves and their families.

I am sure the Deputy will agree that today's farmer has better prospects than his forefathers had.

(Cavan-Monaghan): Of course I do, but he has a different outlook as well.

There may be a correlation.

(Cavan-Monaghan): I was about to say that perhaps the better outlook is generating more courage. The farmer in the past had to doff his cap and proceed to the bank with great caution. He knew he was regarded as a doubtful risk. That has changed and it is good that it is so. Deputy Barry said yesterday that most Irish people still had the cow dung on their boots. I am glad to be able to say that I am one who takes a great pride from being close to agriculture and one who has just left it—if, indeed, I have left it.

I was dealing briefly with the stability of industry and employment based on agriculture as compared with industry based on multi-national corporations who may come and go. Agriculture is the base, I believe, for great employment-giving industries if it continues to expand as I hope it will.

The Minister said that the aim of the ACC must now be "to consolidate their position following a period of very rapid expansion while continuing to provide a first class service to Irish agriculture". I do not believe, and I hope the Minister does not believe, that the ACC should remain static. They should continue to expand as long as expansion can be profitable and as long as the money which they lend can be put to the good use to which the young farmers are putting it at the moment. I hope that the Minister did not mean exactly what he suggested in this part of his speech if we take it literally. There has been great expansion and in my opinion there is ground for further expansion.

It is a fact that while some land is being used profitably and to the fullest extent there is a lot of good land which is not yet being used to even a quarter of the extent that is possible. Until all our land is fully utilised we should not talk about consolidation but about further expansion and about spending money to put the land to work. If one drives through the country one will easily see the land that is well looked after, the green fields that are thriving and carrying a substantial stock of cattle and so on but, alas, there are far too many grey fields. There are too many fields which do not become green until May or June, while farms that are well looked after will start to become green, as will the lawns, in the next month or so. It is sad to have to say that we must wait until the young farmers move in and turn the grey fields into green fields. I should not like to think that we have reached the stage where we have become complacent. One does not have to do a soil analysis or to have degrees in agricultural science or to be a practical farmer to see that a lot of the land is working far below full production.

As long as that state of affairs exists there will be plenty of work for the ACC. While farmers are very welcome in the head office of the corporation, ACC House, a fine new building, and at the sub-offices throughout the country, I am convinced that the ACC can be relied upon not to throw out money foolishly but to advance it for sound productive purposes. I want to flog the point as hard as I can that if all our land was in full production it would create innumerable jobs in the processing of agricultural produce so that it could be exported as the finished product ready for use. That type of employment will be near to the hearts of the people, a type of employment which is not foreign to them and which they are more likely to fit into. In that sort of employment we would not have the industrial unrest generated in other types of employment.

Although this is a consolidating Bill we should go through it with a fine comb. We recently debated the European Assembly Elections Bill which was put through the House to facilitate the holding of these elections. It was largely a Bill taken from other electoral Bills governing presidential, Dáil and local government elections. On going through the huge Schedule to that Bill, from practical experience it was possible to find loopholes and shortcomings. We did find some of them and we improved some of them. Only it was necessary to get the Bill through within the next month or so we could have done more work on it.

Although this Bill is a consolidation Bill and incorporates all the Agricultural Credit Acts since 1927, I believe we should go through each section in the light of our experience to see if it can be improved. I heard Deputy D'Arcy complaining yesterday about delays in getting loans through the corporation.

I thought the Deputy was paying some attention to that all right.

(Cavan-Monaghan): I gathered that Deputy D'Arcy was placing some of the blame on solicitors' offices throughout the country. Blame can be attributed here and there for faults and it would be foolish of me to say that solicitors' offices are blameless. Some of the legal machinery at the disposal of the profession, which must be implemented by the ACC's solicitor, leads to delays. I want to go on record as saying that the first law of nature is self preservation—man mind thyself—and it is the business of the solicitor for the corporation to comply with the law and to ensure that there are no loopholes through which borrowers can escape. If he did not ensure that the mortgages complied with the law, he would be blamed.

I believe we should look at the sections to see if some of the procedures can be simplified. Perhaps we could expedite the granting of loans without undue risk to the corporation by amending the law. Deputy D'Arcy complained that some borrowers had to avail of bridging loans for a considerable time and bridging loans cost more than ordinary loans. There have also been cases of borrowers' loans being delayed by the corporation for such a long time that the interest rates had increased in the meantime and they had to pay the increased rate for the duration of the loan, which is a more serious matter. The interest chargeable at the date of sanction of a loan should be the prevailing rate and not the rate chargeable when the loan has been paid.

There are technical sections in the Bill on which I may comment later. In a general way, I notice that section 17 provides that when a person is nominated to the Seanad, that is, when he is one of the Taoiseach's nominees, he ceases to be a member of the board of the corporation. It also goes on to say that when a person is nominated for election either to the Dáil or Seanad, he is disqualified. I think that is going too far. It suggests that the thinking behind it is that once a person becomes an active politician he should not be a member of the board. Let us call a spade a spade. We know that over the years the board has been——

The Deputy will have an opportunity to comment on Committee Stage.

(Cavan-Monaghan): I think it is in order to comment in a general way, Sir. Well-known politicians of all parties have been members of the board and they have done a good job. It is going too far to disqualify a person from membership of the board because he stands for election. He is not more political on the day he stands for election than he was on the day before he stood for election. He may be the county secretary or the constituency secretary of a political organisation and remain a member of the board, but he is disqualified under this section when he stands for election. He is as political, perhaps more political, as a county secretary or a constituency secretary as he is when he offers himself for election. I suppose only one in three of those who stand are elected.

There seems to be a difference between the part of the section which deals with members of the board and the part which deals with employees. If an employee of the corporation stands for election and is elected, he will not be paid by the corporation but will be seconded to the Oireachtas. If he is still alive after his term in the Oireachtas, he can take up his job with the corporation. That is a fair summary of section 17. It is putting the full-time employees of the corporation in a more favourable position than the temporary members of the board. On Committee Stage, the Minister should introduce an amendment to delete section 17 (1). Sub-section (2) is wide enough. It reads:

A person who is for the time being entitled under the Standing Orders of either House of the Oireachtas to sit in that House shall, while so entitled, be disqualified from becoming a director of the Corporation.

That means he is disqualified on election, whatever the method of election. I want to emphasise the distinction between the treatment of a member of the board and an employee.

I do not propose to go through the Bill section by section because I am sure that would be trespassing on the patience of the Chair. I welcome the policy of the ACC to establish offices in every sizeable provincial town. That is decentralisation in a practical way and it is bringing the officers of the corporation, and the corporation, into closer touch with the people it serves. That was not so some years ago when there was just a head office in Dublin and one or two offices elsewhere. Nothing could have been more inappropriate for the ACC which serves the agricultural community than to be housed in an office in Dublin without offices in big towns. It is good to see the ACC establishing prestige offices in provincial towns. In this regard I was pleased to see the ACC purchase the Bank of Ireland premises in Cavan when they became available after the amalgamation of a number of banks. The premises were not put up for public auction and I do not think that was necessary but I feel sure the bank were satisfied with the price paid to them by the ACC. The ACC were fortunate in getting prestige offices located in the centre of town. It pleases me also to know that those offices are well staffed and that applications for loans can be processed quickly. If there is an acute urgency about a matter, such as a forthcoming auction, the district officers of the corporation facilitate applicants, their solicitors and the auctioneer.

I should like to pay a compliment to the members of the various boards of the corporation and the permanent staff. Any delays that take place, and delays occur on occasions, are due to the necessity for the professional and administrative staff to comply with the law which we hand down to them. If we want this red tape eliminated where it can be with safety—I believe there are many areas where the red tape can be cut out—then it is our duty to simplify the procedures. It is my intention to examine the Bill closely between now and Committee Stage in the hope of finding ways of simplifying the procedure so that the business of the corporation can be expedited.

I should like to make a few brief points in connection with this Bill. I welcome the Bill and any measure which will lead to the development of Irish agriculture. I should like to see the greater percentage of the money available for farmers being used for development purposes rather than land purchase only. I do not see any great point in farmers going to the ACC to borrow money so that they can bid against other farmers for a local farm. Unfortunately, the farmers with the greatest assets are in a position to borrow money. We have a situation where land is being sold for prices in excess of what the average farmer can pay for it. For that reason I feel the majority of the money being made available by the ACC should go for development purposes. We have ten million acres of land which can be developed. Over the last few years there has been a significant increase in the price of agricultural produce but our development has not accelerated as it should. Our milk yields are half what they should be and the increase in price has not proved enough of an incentive.

Applications for money for development purposes should be accompanied by a detailed development programme and the ACC should not give money without being given a plan for every investment. Significant improvements were made by those who took advantage of the recent World Bank loan. Mr. Peadar MacCanna, who supervised that World Bank loan, in the course of a paper which detailed the success of that loan, pointed out that the average income of 600 farmers questioned— 2,000 farmers were involved in all— had increased by 47 per cent. The stocking rate on those farms was reduced from 1.9 acres per livestock unit to 1.3 acres per livestock unit at the end of the development plan. The number of farmers with milking parlours at the commencement of the plan was 9 per cent but at the end of the plan 84 per cent had installed such parlours. The number of farmers making silage rose from 29 per cent to 82 per cent. In other words, the development plan required by the World Bank influenced farmers to improve the technology on their holdings. Although we have ten million acres of land which can be developed we only produce about 700 million gallons of milk. We are capable of producing 700 gallons of milk per acre and, therefore, technically we can produce the milk we are producing from one million acres of land. The scope for development is enormous. That is why I would like to see the ACC insisting on getting a development plan before giving out money.

The reason the World Bank scheme was successful was because detailed programmes were drawn up with advisory officers and the loans were conditional upon the farmers keeping to the targets required. The average farmer does not have a fixed plan or fixed targets and the constraints on him are significant. The ACC should employ additional agricultural advisers to ensure that development plans are implemented and that the ordinary farmer is helped. Money should not be given to farmers to do what they like with it. By insisting on getting a plan we can develop our most important resource. I agree that it is good to see the ACC setting up offices in rural areas. An office has been set up in Skibbereen which is deep into the heart of the disadvantaged area of west Cork. It is giving a service to local small farmers. They have contributed significantly where there were financial constraints on development.

Those are the main points I wanted to make. I do not want to delay the House. The first point is that a higher percentage should go for development rather than land purchase and, secondly, the money made available should be conditional on firm plans for development. I commend the Bill to the House. I compliment the ACC on the way they have helped in developing agriculture. I hope that, before very long, they will be a major contributor to the development of our agriculture. At present they are not the major contributor. Some of the commercial banks actually give more money than the ACC for development purposes. The ACC should be the premier development body. I should certainly like to see that happening. The staff are composed of farmers and agricultural advisers. The minimum red tape is involved. They can contribute significantly to the development of our greatest natural resource.

It is very gratifying that every Deputy who spoke in this debate welcomed the Bill and was warm in his praise for the Agricultural Credit Corporation, their activities and their staff. If all the State and semi-State bodies produced that kind of reaction in this House, we would be in a very happy situation.

I want to deal briefly with the main points raised. I say briefly because, as has been pointed out by a number of speakers, this is primarily a Committee Stage Bill. No doubt we will deal in considerable detail with the various aspects of the Bill on Committee Stage. The first point I want to deal with is one made by Deputy Barry and at least one other Deputy, that is, a complaint that no explanatory memorandum was issued with the Bill. I am not sure if that is a legitimate complaint.

Ideally we would have an explanatory memorandum with it but the fact is that largely this is a consolidating Bill and, therefore, it is repeating provisions which already exist. There are marginal notes in the Bill which draw attention to the existing provisions. In so far as it contains changes, in my introductory speech I outlined the major changes and drew attention to them so that between now and Committee Stage Deputies who are interested, particularly in the changed aspects of the law, can concentrate on them. Having regard to the fact that the changes are rather technical and suitable for Committee Stage, I feel there are no great grounds for complaint in this regard.

Deputy Barry also queried whether there was any change in the position in regard to the appointment of directors as provided in this Bill. I can assure him there is no change. Deputy Callanan was not very happy about the processing industry. I think he was speaking from the producers' point of view when he said he was not very happy with it because it was not paying competitive prices. I understand and sympathise with what he was saying.

I just want to refer briefly in this context to something said by Deputy Fitzpatrick about Ferenka. Of course, everybody would subscribe to the view that we would be better off to have industry based on native raw materials, and preferably native-run industries based on native raw materials. In the wake of the Ferenka affair, it may be becoming a little fashionable to talk in this way, as though that would solve all our problems. We must not lose sight of reality.

Leaving aside the whole question of whether we can provide sufficient jobs in this way, there is the practical difficulty that we have industries based on native raw materials and some of them are not very encouraging. Indeed, some co-ops which are very large businesses have given great cause for concern in recent years. So, let us not fool ourselves into thinking the answer to our problem is to have industries, co-ops or otherwise, based on the processing of native raw materials.

Much more than that is needed in any industry, whether it is based on foreign or native materials. It is quite clear from the record that that is so. I am not in the least decrying the objective of trying to have as much of our industry as possible based on native raw materials. What I am saying is that that by itself is not the answer to our problem. It needs efficiency. It needs co-operation. It needs good industrial relations. It needs attention to marketing, to technological processes and various other things. All of these are necessary, whether the raw materials are native or foreign.

Deputy D'Arcy raised a point on section 27. I doubt very much that his contention in that regard is justified but I will certainly look into it. At the moment I have not got available the answer to a question which was asked in regard to the overall liability or the contingent liability of the State on foot of guarantees for all State or semi-State bodies. In the context of the reference made to the foreign borrowing ratio, the fact is that the foreign borrowing ratio in this regard has increased substantially in recent years. I would hope it would not increase at the same rate certainly in the coming years.

Deputy Barry expressed some doubt as to whether the role envisaged for the ACC in this Bill might be in conflict with the private sector. I do not think there is any such conflict. We are extending the aggregate facilities available and there is a very good working relationship between the ACC and the banks. About 15 per cent of the total outstanding bank advances are advances to agriculture. There is plenty of room for the banks to increase their advances to agriculture if they wish to do so.

One of the reasons for the setting up of the ACC, one of the reasons why they must continue, is that the ACC are devoted specifically to agriculture. On occasions the banks tend to be more enamoured of agriculture than other occasions. I do not think agriculture can afford to be subjected to the kind of changes brought about by extraneous factors in the activities of the banks.

I was somewhat intrigued by Deputy Barry's apprehension as to the possible conflict with the private sector when contrasted with Deputy D'Arcy's forthright and repeated demands that the ACC should be engaged in providing what really amounts to a full banking service throughout the country. There seems to me to be a contradiction in the approach of the two Fine Gael Deputies in this regard, one which I am sure they will sort out between them in due course.

(Cavan-Monaghan): It is not so long since the Minister's party had more difficult ones to sort out.

The Minister is in possession.

(Cavan-Monaghan): I hear Mr. Kevin Boland has published a new book.

Mr. Kevin Boland's new book does not arise on this Bill.

(Cavan-Monaghan): I was wondering if the Government would make time available to discuss it.

That is a matter for the Government.

I should have thought that the Fine Gael Party might well, if they wished, after they had provided time for sorting out difficulties of the kind I have referred to, devote their time to that other topic. I do not think the Government will spend too much time on the topic mentioned by Deputy Fitzpatrick.

(Cavan-Monaghan): It has just come out, I hear.

The Minister, please.

Deputy Bermingham spoke of the need for loans for small farmers. The ACC are sympathetic to small farmers as the record shows because 75 per cent of ACC loans are for amounts under £5,000. In suitable cases they give unsecured loans up to £2,000 where the repayment period is five years or less. In any financial institution or lending agency there are always customers who are dissatisfied and this will be true of the ACC also. It is necessary to stress that the record shows that the ACC exercise practical sympathy in regard to small farmers.

Deputy Crinion was concerned lest there might be an undue use of resources of the ACC in loans to big firms. Figures show that only £15 million out of the £105 million lending for 1977 will go to firms in the processing industry. The ACC are joint financiers with the banks of some quite big co-ops. I think these are fairly well known.

I was asked to comment on the section dealing with the control of the remuneration of the chief officer of the ACC. The provision is this regard is the standard provision which has been introduced as soon as the opportunity offers in relation to all State-sponsored bodies when the legislation comes before the House. Experience over a number of years has shown that any attempt at some kind of uniform approach to incomes policy can be totally defeated within the ranks of semi-State bodies unless some sort of overall control is exercised. That is why these sections are introduced in such Bills as they come forward. In the absence of that, there is, and has been for some years now, a form of non-statuatory control or persuasion exercised by sucessive Governments in this regard.

I am aware of the kind of problem that can arise. There may even have been one case in existence where the second in command was being paid more than the chief officer. I think this was what Deputy Bruton referred to. As Minister for Finance I am not prepared under any circumstances to tolerate a situation in which some board of a State body uses this lever in order to breach the overall control being exercised by the Government in regard to incomes in the public sector to ensure that some official who is not subject to this kind of control is paid more than his chief executive in order to force the Government to give way. If such a thing happened my reaction would be that the members of that board by their action are raising very serious doubts as to their competence and ability to fill the positions in which they are. I want to make it quite clear that would be my personal reaction. I was asked to comment and I am commenting.

On the other hand, there is the situation to which I think Deputy Bruton also referred which could arise, but in very rare circumstances, in which it would be necessary for a particular body to recruit somebody with unusually scarce skills and in order to attract him he would have to be paid remuneration in excess of that of the chief executive. That happens only very, very rarely. If it should happen that such a procedure is necessary the position could be discussed with the Minister responsible for the body concerned in consultation with the Minister for the Public Service and I am sure a solution could be worked out. We need not worry unduly about that; it is not the kind of problem with which we are normally faced; we are much more likely to be faced with the kind of thing to which I adverted a moment ago.

Deputy Callanan also referred to the necessity for the ACC to assess the man rather than the amount of land he had to offer as security in dealing with loan applications. I would agree with him. This is one of the reasons why in this Bill we are extending the definition of "permanent improvement purposes" in section 37. By doing so, we enable the ACC to assess a prospective borrower in terms of his personal enterprise and his farm plan and not purely in terms of what, in another context, is reffered to as bricks and mortar and, in this case, the extent of his holding.

Deputy Bruton referred to the possible need for a Government guarantee to the ACC for loans to certain farmers. That is what I took him to mean; perhaps he meant it in a wider context and meant a guarantee to the banks. I doubt if it is necessary or desirable but I shall examine the idea. I should like to make clear that at this stage, on the face of it, it does not seem necessary or desirable.

Deputy D'Arcy urged that depositors should be issued with pass books because he felt this would assist the ACC in getting more deposits, particularly from smaller depositors. The ACC are in fact organising this at present with the full support and consent of the Department of Finance.

Deputy D'Arcy repeated plea for the making available of current account facilities by the ACC in their various offices through the country raises a number of issues. The matter is not as straightforward as it might appear. I do not think it necessary to go into all the issues here, but one that should not be overlooked is the possibility of additional cost. Another Deputy referring to Deputy D'Arcy's plea said that this was a way in which the ACC could perhaps make more money and thereby help to reduce interest rates. If the ACC were to porvide this facility they would be depending on the banks to provide clearing facilities and they would have to pay the banks for this service. They might have to pay a very considerable sum for this. This is just one of the aspects of the matter which has to be taken into account.

I will look into the queries in regard to chattel mortagages, raised mainly by Deputy D'Arcy. The provisions on floating chattel mortgages seem to be very flexible. In this connection I refer the Deputy to section 30 (1) paragraphs (a) to (c) in the Bill. I will look into the points he raised. I think he may be under a misapprehension about it.

Deputy Bruton raised the question of the statutory restricitions on a floating charge being placed on the assets of a co-operative. I will have a look at that point. I noted that, while Deputy Bruton raised the issue, he was very careful not to specify which particular way he wanted it dealt with.

Interest rates in the ACC were recently reduced. There are other terms available on loans from the ACC which are quite attractive and are not, as far as I know, available from any other leading source. This is reflected in the enormously increasing demand for loans from the ACC, Deputy Bruton also raised the question of term loans and their unsuitability for agriculture. He was referring specifically in this case to the banks. That, of course, does not come within the purview of this Bill. I will inquire into that matter in relation to the operation of the banks and the application of term loans to agriculture.

A point was raised by Deputy Burton in regard to section 3, the definition of "agriculture". That definition is not intended to be all-embracing and merely refers to agriculture as including certain items which are specified. I am sure it is felt that tillge is so obviously agricultural that it does not need to be included. Nevertheless, I believe Deputy Bruton may have a point considering dairying is included. It could, perhaps, be argued that, if it is, it is so obviosuly agricultural that it does not need to be. However, I will have that point examined.

Deputy Fitzpatrick raised the question of section 17 relating to membership of the Oireachtas or nomination for election or nomination to the Seanad and the effect of that on board members and employees. This section is a standard section which has been incorporated in numerous Bills in the past. Precisely the same form is used on each occasion. I do not want at this stage to get into a detailed argument on the merits or demerits of the provisions in it. If Deputy Fitzpartick, on consideration, wants to pursue this matter no doubt he will do so on the Committee Stage on that section. The difference in treatment between a board member on the one hand and an employee on the other is justified since, in the case of an employee, if he goes forward or if he is elected and subsequently loses his seat his livelihood is gone. That is not true of a board member, so in that sense that difference of approach is justified. In regard to the other question of mere nomination causing a director to have to resign——

(Cavan-Monaghan): That was the point I was making. I have no objection to a person who becomes a Member of either House being disqualified, but I do not think that standing for membership should disqualify that person.

We can, if necessary, argue this on Committee Stage. This is an approach which has been argued out a long time ago and rightly or wrongly, the decision having been come to, the precise same terms have been applied to numerous State bodies over the years.

Depeuty Joe Walsh made a very brief speech but a very important one. First of all, he wanted to urge that more of the money advanced by the ACC should be used for development and not for land purchase. I know this is a very sore point but again, because of controversy which arises in this regard, it may be thought that more of the resources are used for land purchase than are actually used. I understand that about £10 million per annum is made available for land purchase. There is a strong argument for saying that none of the resources of the ACC should be made available for land purchase. I am not too sure if that argument is vaild but I know one can make a strong argument for it.

Deputy Walsh gave some figures arising out of the World Bank project which are extremely interesting. As far as i am concerned the approach Deputy Walsh was advocating is the right approach. It is true, as I have indicated, that the ACC will be enabled under one of the new provisions in this Bill to take account of farm plans. Deputy Walsh urged that we go even further and that loans be made conditional on the operation of a plan. Some people might not agree with that approach. As a man with a non-agricultural background I would agree with it. I know Deputy Walsh has a very sound agricultural background and I am heartened to hear him take that approach. I feel it is vitally important that the money we invest in agriculture should, as far as possible, be related to an actual plan for development and should be used in that way. In the brief account givan by Deputy Walsh of the results of the World Bank project he showed very clearly the very substantial gains that can be made as a result of this approach. I favour an approach on this lone. One has to have regard to the practical realities facing the ACC but, subject to that, I strongly encourage the ACC to follow this line of approach.

Deputy Fizpatrick, not perhaps unreasonably, had a look at what I said at the end of my speech about consoildation. I accept that what I said could be open to the interpretation to which he pointed. He did not put that interpretation on it but he pointed out that it was open to the interpretation that I was saying that, after this period of rapid expansion, the ACC should go slow. I am not saying that.

(Cavan-Monaghan): I thought the Minister was going to rest on Deputy Clinton's oars.

I do not wish to become involved too far in that. However, Deputy Fitzpatrick quoted some figures to justify Deputy Clinton's record with which, incidentally, I am not quarrelling but I notice that Deputy Fitzpatrick had to go back a bit beyond Deputy Clinton's period of office for that purpose.

(Cavan-Monaghan): The figures are in the brief. In 1972 the amount was £25 million, in 1976 it was £85 million and it was £105 million in 1977.

Some people would say that 1972 was before Deputy Clinton came to office. They would say also that the ACC had a good deal to do with this.

(Cavan-Monaghan): Of course.

I shall not pursue that here, but so far as I am concerned all I meant to convey was that it was necessary for any organisation which has been expanding very rapidly to engage in a certain amount of consolidation which might involve having a close look at their own structures and staff, but I did not intend in any way for the ACC to get the impression that they should stop expanding. If the opportunities arise for them to expend I want them to go ahead as fast as they can.

I have dealt in the main with the points raised but, obviously, this is really a Committee Stage Bill. I thank the House for the welcome given to the Bill at this stage and I look forward to a detailed discussion on Committee Stage.

Question put and agreed to.
Committee Stage ordered for the first sitting day after the Christmas recess.