Well, I have heard a number of other Deputies being given a certain amount of concessions and I was not going to dwell unduly on the matter.
For the sake of the industry I hope this lack of confidence will be got rid of soon so that we can look forward to the future with optimism. Unfortunately that is not the case at present.
During this debate at least one Member of this House has accused the Agricultural Credit Corporation of being partly responsible for the spiralling price of land over the past three or four years. I refute that allegation, because the provision of money for land is not one of the ACC's primary functions. As can be seen from the Minister's statement, their primary function is to provide money for livestock and agricultural development. I believe that some 12 per cent only of the money loaned by the ACC is utilised for the purchase of land and, when it is so allocated it is not for the purchase of any vast tracts of land but merely to give an existing farmer an additional allotment, that allotment being quite small. For instance, I am told that the maximum amount of money placed on loan by the ACC for land purchase is £40,000. At present land values one could hardly expect to get more than 20 acres for £40,000 in virtually any part of this country. Therefore, it is incorrect to say that the ACC have been responsible for the escalating price of agricultural land. Those who have been really responsible in that respect are business and professional people and, for that matter, very big farmers who have got vast amounts of money, people who could also easily obtain credit. These are the people who have put up the value of land to the level of £3,000 or even £3,500 an acre. It is unfair to lay the blame on the ACC. The ACC were given a certain function to perform and they have done so in an excellent manner. I do not think they can be criticised. I have never heard responsible members of the farming community or representatives of the recognised farming bodies criticise the ACC unduly. By and large they are doing an excellent job, the one they set out to do 50 years ago.
Reference has been made here by a number of speakers to the possibility of giving the ACC a licence to operate as a commercial bank, a topic very much in the news over the past week. We have seen statements in the Press that there are moves afoot to set up a farmers' co-operative bank, and the idea has been mooted that the ACC would be the ideal body to take on such a business project. I have found that within the ACC itself and also amongst knowledgeable people in agriculture this idea is being very well received. Previously feelers were put out by the ACC with a view to the setting up of such a bank within their own operations. It does not seem to make much sense that we should have a separate farmers' co-operative bank when the ACC, by getting a licence from the Government, could perform the same function. I would rather see the matter being dealt with in that way than having a separate farmers' co-operative bank. The ACC have the personnel and all of the machinery for the setting up and operation of such a bank. It could be undertaken by them without any expenditure of money because they have the necessary facilities. Indeed the ACC are to be congratulated on the manner in which they have extended their operations right across the country. Most sizeable provincial towns nowadays have an ACC office. I witnessed the opening of two of these offices in my locality in the past year. They are providing that personal service to the farming community so badly needed. They have in their premises all of the facilities they would need to operate as a commercial bank but are at present being hindered in their operations by a lack of cash flow which they would have, if licensed. By that I mean that they are not now in a position to issue cheque books, as was pointed out yesterday by Deputy D'Arcy; nor are they in a position to give short-term loans. All of their loans are given on a long-term basis, rendering the movement of money that much more difficult. As a result they do not receive the vast amounts of money the commercial banks receive on a short-term basis from people lodging money, people in credit. The commercial banks utilise this advantage to great effect whereas the ACC are at present being starved of that source of cash. It seems to be terribly unfair that while the commercial banks can make vast profits the ACC should be stymied in their attempt to go ahead in the same line of business.
We read in the newspapers yesterday that the former EEC Commissioner for Agriculture, Monsieur Lardinois, who is at present on a visit to this country, advocated that something along those lines should be done here, that there should be a farmers' co-operative banking system, that such a system exists in Holland where it works very successfully. There does not seem to be any valid reason that the same cannot be done here, a country which is primarily agricultural. Monsieur Lardinois, in a Press statement, was quoted as saying that there are 1,000 branches of such a farmers' co-operative bank in Holland, providing a tremendous service to the farming community there in general. The Minister might well investigate the operation of this bank in Holland in order to ascertain if a parallel arrangement could be set up here.
I read in the Minister's report that the activities of the ACC will be reviewed in, the very near future by the Oireachtas Joint Committee on State-sponsored Bodies. Perhaps this body would avail of this excellent opportunity to discuss the possibility of giving the ACC a licence to operate as a commercial bank. Surely if this committee are to have a useful function that is the type of exploratory work that they should endeavour to carry out. I hope that people such as myself can make submissions to them along those lines.
Previous speakers emphasised that lending rates at the moment are so prohibitive that the growth and development of the agricultural sector is being seriously set back. There is no doubt that that is true. The ACC lending rates vary from 17½ per cent to 19 per cent, and they are entirely unrealistic for a sector whose income is almost static this year in comparison to last year and previous years. It should be recognised that the growth in incomes of the farming community is at a stop. Somebody mentioned that this year the growth in farm incomes will be of the magnitude of 1 per cent whereas the cost of feeding stuffs, fertilisers and other things used by the agricultural sector have been rising at a rate of 20 per cent. Something will have to be done to give some relief to those who have invested heavily in agriculture. They are being screwed into the ground by these exorbitant interest rates. It is sad that it is the developers, the people who have borrowed heavily in the best interests of the country to develop their farms, who are being screwed into the ground by the credit restrictions and the high interest rates. That should not happen.
There is not enough liaison down the line from the Central Bank to the ordinary man in the street who wishes to borrow the money. The credit restrictions are very severe, and no bank manager has the discretion to loan more than £2,000 without reference to a higher authority. That discretion has also been curtailed in the case of the ACC. The managers at local level know the circumstances and they are in the best position to judge as to who is a good risk and whose project is worthy of support. Unless that discretion is increased it is a poor outlook for this country that some bureaucrat sitting in an office can decide what an individual farmer should receive. The men in the field, the local branch manager or the regional manager, are the people who should decide. I understand that at the moment the discretion limit of the regional manager in the ACC is £20,000 and the discretion limit in the case of the branch manager is something between £7,000 and £10,000. This is not sufficient, and these people should have a greater discretion. The restrictions are now so strict that these discretion limits were introduced and the borrowers are suffering greatly. In his reply can the Minister hold out any hope for these progressive farmers who have invested heavily and now find that they cannot make enough money to meet the repayments on their loans?
Why have we not got a system comparable with other EEC systems where loans at subsidised rates are available for farm development? Virtually all EEC countries, probably with the exception of Great Britain, have vastly subsidised agricultural loans systems. For instance, in Germany a farmer can get a loan at a rate as low as 7 per cent. That is a vast difference to our 17½ per cent to 19 per cent which must militate heavily against expansion in this sector and puts the Irish farmer on an unequal footing with his counterpart in the EEC. Can the Minister hold out any hope of a change in our system to allow subsidised interest rates for farm development? It seems a logical step to take as this is our major industry. It is reckoned that some 80 per cent of the farms here are not sufficiently developed. We must do something about this underdevelopment.
The way to improve matters is to make agricultural loans available at a greatly reduced rate. I know that a lot of the difficulties in the EEC arose from the fact that years ago they gave out money at an extremely low interest rate, that it is coming back in dribs and drabs and that they have to pay at least 11 per cent to everybody who saves with them. There is an unequal situation there in that their long-term loans are not yielding as much as the rate which they have to pay out. That obviously creates a difficulty.
I wished to refer to the agricultural problem a little more but the Leas-Cheann Comhairle put a spoke in the wheel so that it is difficult to broaden the debate as I had wished. Will the Minister in his reply give some answers to the questions I have posed? How much money will be released to the ACC other than the £25 million referred to in the Minister's opening statement? Can the Minister hold out any hope of a subsidised interest rate at a time when credit restrictions are crippling our greatest industry? If these restrictions continue and if the industry continues to suffer it is a bleak outlook for the economy.