: I move: "That the Bill be now read a Second Time."
The purpose of this short Bill is to increase from £60 million to £80 million the total amount of land bonds which may be created to pay for land acquired by the Land Commission. The bonds are created from time to time by the Minister for Finance under Land Bond Orders which fix the rate of interest for each particular series. The most recent series bear interest at 12½ per cent and are redeemable in 32 years. The existing limit of £60 million, which was fixed under the Land Bond Act 1975, has now been reached, and additional bonds are needed to ensure that there is no holdup in the current ongoing land settlement programme.
In commending this Bill to the House, I should like to make it clear that the Government are not committing themselves to an indefinite continuation of existing land policy. Far from it. As Deputies know, the Government have indicated already that they propose to reform land policy. To this end, it was indicated in our election manifesto that we would establish a new land development authority which would be responsible for structural reform. The Interdepartmental Committee on Land Structure Reform recently submitted their final report, which is at present being printed and will be published within a few weeks. The whole position in regard to land policy, including the committee's report, is being examined currently by my Department, and I will be putting comprehensive proposals before the Government later in the year.
These proposals will have to involve some fundamental changes in policy. I think it is now generally accepted that the traditional land policy based on the acquisition and resale activities of the Land Commission is not suitable for the conditions of 1978 or the conditions that will exist in the years ahead. This traditional policy was quite satisfactory for decades and has made its contribution to improving land structure. But in recent years the pace of change has greatly accelerated and new measures are clearly required to cater for the altered situation.
Irish agriculture is on the move and the land of Ireland has acquired a new importance in the nation's economy. The substantial increases in agricultural prices in the past six or seven years, coupled with the opening up of export market outlets, have completely revolutionised the agricultural scene and have brought a new era to rural Ireland. One of the major results of these developments has been a sharp rise in the value of agricultural land. At the same time, however, other factors have entered in to boost land prices to levels which are far beyond what is justified by normal farming returns.
Inflation is one of these factors. It may well be asked why people seeking a hedge against inflation should be allowed to force up the price of land to the point where the small- and medium-size family farmers have little or no possibility of getting a few extra acres, or at any rate getting them at some kind of reasonable price. Far too many non-farmers have been using land as a safe haven for their excess money and have been doing so in a way which has brought little lasting benefit to the agricultural industry. The speculator who purchases farm land is more interested in money profit than in developing the land and utilising it to the national advantage.
Another factor which has been raising land prices has been the buying up of land by large farmers who have enough already, and in some cases more than enough land. While I would have reservations about preventing a highly progressive farmer from adding to what may already be a substantial enterprise, I do not consider that he should be allowed to do so freely if the result of his action is to prevent some of his smaller neighbours from acquiring the extra acres that would make all the difference between struggling on an inadequate farm and reasonable comfort on a viable holding.
In drawing up new policy proposals, my particular aim will be to help the expansion and development of small-and medium-size family farmers and to see how best they can be enabled to acquire some extra land where they need it.
Much attention is always given to land provided through the Land Commission. This, however, represents a small proportion only of the changes of land ownership that take place. In any event, the escalation in the price of land must necessarily affect the volume of acquisitions by the Land Commission. A price of £2,000 per acre, which is far from the top of the current price range, represents at present an annuity of over £250. There is no general farm activity which would finance such an annuity. If it is expected that the Exchequer should step in and meet a substantial part of the cost, it has to be remembered that the State's coffers are not overflowing and that the State just cannot expend ever-increasing amounts of taxpayer's money to compete with speculators.
By far the most important channel through which farm land ownership changes is inheritance. There is much to be said for encouraging earlier transfers within the family. This, however, is a very sensitive area and it is necessary to be very careful in providing outside advice and encouragement. Associated with family transfers and inheritance is the question of retirement. The EEC Commission has put forward proposals for amending the Farm Retirement Directive, and these are being considered at official level in Brussels and will come before the Council of Ministers in due course. When considering farm inheritance and farm retirement, it is necessary to bear in mind how the whole picture has altered, not merely since the start of the seventies, but even in the past couple of years. The value of the family farm can now be very substantial—well over £100,000 for even a modest holding. The huge amount of capital now involved in a farm has implications for distributions among members of the family and in the years to come may well have a dramatic impact on inheritance and retirement practices within the family.
Another major channel of change of land ownership is sale on the open market. This, of course, is where the price factor really enters in. From time to time, the purchase of some land by a non-national arouses considerable controversy, but I would suggest that the Irish speculators can have far more serious effects on our small- and medium-size farmers. When such farmers see the land needed for viability gobbled up by someone who did not really need more land, it makes little difference whether the purchaser was foreign or Irish. The end result is the same.
How can we improve the situation to deal with the current high land prices and the new thriving condition of our agricultural industry? Various possibilities are being considered by my Department, and after my proposals have been considered by the Government, I will be bringing legislation before the House. The main essential must be to ensure that the small and medium farmers who badly need additional land are not at a disadvantage in competing with non-farmers and with larger farmers with ready access to capital and credit. One possibility would be to have varying charges on purchases by non-farmers and those who already have substantial holdings. In other words, a handicap system would be introduced into the competitive race for more land. If such a system were in operation, the position of the small man would be greatly improved, and sellers of large areas of land might, indeed, have an incentive to sell in smaller lots so as to meet the demand of those farmers who would not be subject to any charge.
Another possibility would be to require some agricultural qualification for persons buying agricultural land. For example, purchases might be limited to those who have been farming or working on the land for a number of years or who have spent some years receiving agricultural training. I must say I have particular sympathy for farmers' sons and other young persons seeking to enter farming at present. Current prices for land make it extremely difficult for them to start out on their own and, even if they raise the huge amount of capital required, the burden of servicing it is almost intolerable.
Yet another possibility would be to give some degree of priority to development farmers needing more land. These and other possibilities must be carefully considered, and it is not possible at this juncture to say which measure, or what combination of measures, will be introduced. However, one thing is clear. Change, indeed fundamental change, is needed. It must be such as to benefit the small and medium farmer. It may in the process reduce the price of land. But this may well be to the overall national advantage if it enables the progressive farmer or the potential young farmer to get his hands on the land he needs.
In any new measures, the national interest in securing expanded agricultural output will, of course, have to be given appropriate weighting. At the same time, the social and emotional attachment of the Irish farmer to his farm will have to be taken into account. Some of the procedures under the existing land legislation are rather slow because of the need to protect the rights of the individual. It would, indeed, be a sad day if in our anxiety to bring about change we were to trample on the rights of existing landowners. But change cannot be made without causing some upset, and I would certainly not worry about upsetting those who have been speculating in land or who may be considering doing so.
As I have said, I hope to put proposals before the Government before the end of the year and subsequently to bring legislation before the House. I have mentioned a few of the many considerations arising and the options open so as to stimulate public discussion of this major topic over the coming months and also to give notice to those who do not really need additional land that it may be unprofitable to assume the price of land will continue to escalate as it has done for several years past.
Until new legislation has been enacted however, it is necessary to provide funds to pay for lands taken over by the Land Commission under the existing legislation. That is the purpose of this Bill which I commend to the House.
