Agricultural Credit Bill, 1979: Second Stage (Resumed).

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

Like the previous speakers, I welcome the Bill. I have no doubt that the Bill is a move in the right direction. The proposed cash inflow will be greatly welcomed by the agricultural community.

It is not clear how much money will be made immediately available to the agricultural community through the ACC. We had been told that the ceiling on borrowing by the ACC will be raised from £350 million to £600 million but we have no inkling of the amount of cash that will be made available. In his reply the Minister should give us some idea of the rate of input into the ACC. I ask that question because the great demand for money is not being met. The ACC could provide more money if they had the necessary cash inflow. In his speech the Minister said that he recently authorised the ACC to borrow £25 million. However, I am told that they could have done with £55 million in order to fund the projects on hand.

Previous speakers referred to the grave problems affecting agriculture. The theme that runs through all the contributions is that agriculture is suffering from a lack of confidence. The farming community are uncertain of the future. It is alleged that this lack of confidence is accentuated by a lack of credit. This Bill should enable the ACC to provide more money for our primary industry, an industry which cannot afford to be starved of the necessary cash input. The development of agriculture is vital to the economy. Money must be put into agriculture. For that reason, we welcome this Bill. The Minister should tell us the amounts involved and how soon they can be allocated.

The farming community's lack of confidence has resulted from the lack of credit, especially the lack of credit in the livestock trade. In his speech the Minister referred to the various uses to which ACC money is put. The cattle trade is going through a terrible slump at present, much worse that the slumo of 1974. Money can only be made available to the trade through the ACC as the commercial banks have tightened their credit facilities. A steady cash flow is necessary for a buoyant market. Farmers are now selling cattle at a loss because of their need for cash. The lack of credit is causing many difficulties in agriculture. If the ACC are given the necessary finance I have no doubt that matters will improve.

Other factors are responsible for the farming community's lack of confidence. One factor is the uncertainty in regard to the CAP. We cannot afford to allow this uncertainty to continue. Our negotiations seem to be dragging. We do not seem to have the necessary fire which was so evident when Deputy Clinton was Minister for Agriculture. The Government should try to do something about the uncertainty in regard to the future of CAP. Yesterday Deputy Clinton clearly illustrated one of the reasons for the present lack of confidence in agriculture. He related it to the line being taken by the British Government whereby they want to contribute less money to the Community and want to get greater benefits. One of the means by which they hope to gain greater benefits is by returning to their cheap food policy. The Minister must be sure that the advantages which we have gained are retained. It would be a calamity if we were to lose the excellent position which we negotiated and which we have consolidated over the last seven or eight years.

Another reason for the lack of confidence in agriculture is the uncertainty in regard to taxation proposals.

Taxation has nothing to do with agricultural credit as supplied by the ACC. We have had too much of an agriculture debate on this small Bill, an important one but nevertheless small, dealing with agricultural credit.

With all due respects I find it impossible to speak on the Bill, which is strictly an agricultural one, without——

We can have a full scale debate on agriculture on the full Estimate, but this Bill deals merely with agricultural credit.

I am merely trying to tieup the two, and I shall not dwell on the agricultural points I shall make at any great length. Therefore, I would plead the indulgence of the Chair and the Minister.

The uncertainty with regard to taxation creates many problems in that people do not know what the future holds for them. The sooner we have a definite form of farmer taxation the better, when the farming community will know what to expect, what to budget for——

I am sorry, Deputy, we cannot discuss farmer taxation on this Bill. If I allowed the Deputy to do so every other Deputy would want the same concession.

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.

With other Deputies I welcome the Bill, and I am very interested to know how much money will be available to the ACC and also if there is any possibility of lowering the interest rates to farmers. Everybody knows that this has been a bad year for farmers. They have had a lean year. Farmers are a bit depressed. They are worried about the future for cattle. Many small farmers have just started to develop their farms. If you want to run a small farm efficiently you have to take two cuts of silage off the land. You must have buildings to house your stock during the winter. That is where the money comes into it. Many small farmers are not getting grants. Everybody knows that. It is irrelevant to this debate and I will not go into it but it is part and parcel of the need for credit. If a small farmer has his cows out on the land during the winter he cannot take two cuts of silage off it during the summer. He is not getting the proper grants from Brussels. I will not go into the reason for that.

The farmer has to get money from the commercial banks or the ACC. I look on the banks with suspicion when it comes to the question of lending money. I am associated with the co-operative movement. When we started to develop that movement there was no credit squeeze and there was competition between the banks to lend money. When the cattle marts started the banks were offering money in every little village to build a cattle mart. In the West of Ireland we got together, met the Central Bank and asked to have money provided where the marts would be viable. Money was still lent in places where they were not viable. I was a member of a pig co-operative when the squeeze came and we were in trouble to the amount of £5,000. When we went to the banks we were told bank policy had changed. We had to go back to the ACC. They would not give it to us either. The banks closed our accounts. We got the Minister to guarantee us and that concern is viable today.

The Central Bank told the banks to put on the squeeze now, but more than 12 months ago they should have warned them to be careful about lending money. When I see the advertisements about all the money that is available I feel very dicey about them. When the policy is to put on the squeeze there is no quarter given. The ACC have been the farmers' friend. They are very considerate. If you want money for a viable proposition you will get it from the ACC.

The small farmer who is trying to develop is worried about the future of the common agricultural policy. I have stated time and time again in this House that the EEC is not being run efficiently. What has happened since we entered the EEC is a dangerous policy. It was grand to see prices going up but, if they dropped, they would have to drop so far that farmers would be wiped out. There should have been more control over the EEC budget.

They are now telling us that there is very little money in the kitty. Farmers are worried about that. Cattle and sheep have gone very high in price, but you have to replace them. At one time a collapse of £10 or £15 in prices would have been considered very serious, but recently there was a collapse of almost £100 in the price of cattle. There is a terrible fear that something will happen to the CAP. Countries like us are doing their best, but only a few countries in the EEC are anxious about the CAP. The vast majority of countries which are not agriculture countries do not want the CAP.

We are getting away from the Agricultural Credit Corporation.

I will come back to credit.

The Chair has tried to stop other Deputies from going fully into EEC policy, the CAP, and so on.

We elected a European Parliament and the danger is that it may have too much power and influence. We have only 15 seats out of 410. On the Council of Ministers we have one out of nine. I will not dwell on that any further because if I am ruled out of order that is that. I have always obeyed the Chair since I came into this House.

The last speaker mentioned the interest rates, which are terrible at 18 per cent. I wonder could money be made available to farmers at a lower interest rate. Small farmers in particular did not have decent housing for their stock. I was in a constituency recently in which there are large farmers and I saw big yards which must have been built 15 or 20 years ago. In my own area small farmers are trying to put up slatted houses for 30 or 40 cattle. That type of house costs about £11,000. That is a big amount of money to a man with a 35-acre farm. He will get a grant of a couple of thousand pounds and he has to get the rest somewhere. His only hope is the ACC. Mention has been made about the possibility of setting up a farming bank. I would welcome that, but I would not like to see too much competition between it and the ACC. I would ask the farmers to move slowly and not rush into this.

We are dealing with giving extra money to the ACC. I hope it will be used with proper discretion. If a man has a plan for development the ACC will give him the money but I am worried about the interest rate. Can anything be done to subsidise the interest rate? At the moment the commercial banks are not inclined to lend money by order of the Central Bank. I mentioned the question of the inefficiency of the running of the EEC. The Central Bank waited until it was too late to say to the commercial banks that they must be careful. That should have been done 12 months ago and not now when the farmers are having a tough time, when their morale is somewhat low though the situation cannot be said to be as bad as it was in 1974. Farmers have had a bad year. I welcome any provision that will mean the making available of more money for farmers, and in this regard I urge the Minister to consider the suggestions that have been made regarding lower interest rates. Far be it from me to be a prophet of doom, but I always like to point out any weaknesses that I can see in a situation and in this context it can be said that it is not a matter of milk and honey so far as the farmers are concerned this year. In terms of the weather it has been the worst year for some time but in terms of confidence alone, it is important that the farmers can be assured of a stable situation and they are very anxious now to know whether the guaranteed prices situation they have been enjoying will continue. I am convinced that a levelling-off period has been reached. Obviously we must not expect prices to continue to increase, but the point is that in the event of a reduction in prices, a drop of, for instance, £10 at a time when cattle might be cheap, would represent a considerable loss to the farmer.

I welcome the Bill but I have availed of the opportunity of pointing out the difficulties being experienced by farmers.

I, too, welcome the Bill. It is very encouraging to know that the ACC are extending the credit that can be afforded to farmers for the expansion of their business. As has been pointed out by many speakers, the corporation have expanded their operations very considerably in a relatively short number of years. They have provided much needed finance and advice to many people during the past ten years. I am sure that not only everyone here but everyone in the country generally would wish for a continuance of this expansion programme. Apart from the question of lending money and of attracting money into the organisation, much thought should be given by the ACC to the concept of advice and direction to their borrowers. Money is a specialised business. Many people have failed in business because of failure to manage money properly. That is why the corporation should give serious consideration to the commercial side of their operations. The management of money is the business of the commercial banks, and people who borrow from those institutions are kept within the proper guidelines in regard to the management of money and to good business generally. There is a danger that there could be a breakdown in regard to this aspect of the ACC if there is not built up a proper organisation.

From talking with people engaged in agriculture I find that they are more inclined to borrow from the commercial banks. Perhaps this is primarily because they have been dealing for longer with these organisations, but there is the impression that in the event of one encountering difficulties, the commercial banks are more flexible, more understanding and more sympathetic. This is an aspect with which the ACC must come to grips, because there is the impression that the corporation are inflexible in regard to repayments no matter how difficult a situation a borrower may find himself in. This should not be the case. This year in particular, when farmers' incomes have dropped drastically, it is rather harsh that there should not be any flexibility on the part of the ACC in regard to repayments. I would make a strong plea for a change in this attitude in respect of anyone who may find himself under great pressure in this difficult year.

Down through the years the great difficulty in farming related to uncertainty, uncertainty as to prices, markets and so on together with the natural uncertainty of weather. This situation was responsible largely for the slow development of our agricultural industry, but since our accession to the EEC that whole situation has changed because farmers are being given targets towards which they can work. For a number of years now they have been in the position of being able to expand their business in the knowledge that they would receive stable prices for their produce. In that sort of atmosphere there was not an excuse for anyone who might not have done a good job, but unfortunately there is an air of uncertainty creeping back into the industry. From a farming point of view the news of the past few days has been very bad. We have been hearing of a substantial increase in the co-responsibility levy. Possibly the levy on milk will be increased from .05 per cent to 2 to 3 per cent though I hope that the increase will not be as significant as that. In addition there are the question marks in relation to the beef and beet market. This sort of situation spells instability for anyone concerned with the agricultural industry.

Our farmers are not being catered for properly in the EEC forum. They are being sadly neglected and let down in that market, for their produce seem to be slipping away. We cannot condone our representatives in the EEC for allowing this to happen. Instead, we must call on them to secure and consolidate the markets that have been open to us up to now. We must not allow a situation to arise in which there would be a reduction in farm incomes, because a downturn in the agricultural industry would be a very serious matter. As has been said here already, 40 per cent of our people are involved either directly or indirectly in this industry. The situation will be very serious for people engaged in agriculture and particularly for those in the agricultural machinery industry which I understand is at a standstill. In the past few months very little has been spent on agricultural machinery and the prospects are bad. Building in general has suffered and will suffer. Employment will be affected if there is a downturn in the industry of it uncertainty remains in the agricultural industry.

The rates of interest payable on loans have been referred to by speakers this morning, and two speakers in particular condemned them. There is not much anyone can do, because money is a commodity that must be purchased. It is available at a price. The only option open to a semi-State body such as the ACC is a lowering of the rates and a restriction of profits. When rates are so high I do not see why they could not be subsidised in some way or reduced and the loss to the organisation could be made up when the rates fall. That would not be an impossibility. It is a great hardship on anybody who has to borrow at the moment and there is a considerable disincentive to borrowing. Any borrower would have to examine his operations very carefully and consider what would be his return on the money. He would also have to check whether the return could pay even the interest rate. This would not be possible in many instances. Consequently, it might be better not to borrow at the present time, and to delay the investment. That would be a pity. Investment in the development of agriculture has been too slow during the years, and it would be a matter of regret if the progress achieved in the past ten years were slowed down or brought to a halt.

An organisation such as the ACC should have some flexibility in lending rates. I think they are demanding 18½ per cent for a term loan. I do not believe that anyone in their right senses would opt for a term loan at that rate when this interest might be reduced drastically within a year or two. The only option left to a borrower is short-term borrowing, but this is not the proper approach to borrowing for development.

It was mentioned here that perhaps the ACC might set up their own banking system. I have not given that much thought. It is a very professional operation and it cannot happen in the short-term. There are constraints put on the commercial banking system that are penal. The commercial banks are restrained to lending £57 out of every £100 they have available. Some 13 per cent of the moneys they have must be kept in cash or in balances with the Central Bank, while a further 13 per cent must be kept in Irish Government exchequer bills. I do not think that is a proper regulation governing funds which are very urgently needed for industry and particularly for agriculture. To put a clamp on this type of fund, to direct the banks to keep 43 per cent of funds available for Government sources, is wrong thinking. The regulation should be examined urgently and changed.

This regulation is restricting the private sector to 57 per cent of the moneys available. If we are to have development we cannot have a continuation of this kind of situation. There should not be a full stop to lending. There should be flexibility with regard to this 43 per cent. If a farmer can put forward a good case to his bank manager, if he can show him that money is required to increase production, the banking system should be empowered to give some of these funds for that purpose. If we continue with the situation presently existing our development will suffer. Our banking system has to freeze 43 per cent of its funds. In Northern Ireland 70 per cent of funds are available to borrowers. We could make more money available. Our hands should not be tied so much by Central Bank directions. Until we change the situation we will be short of funds for agriculture and industry.

It has been a tough year for the farming industry. The prospects for the lamb industry are poor, and in view of arrangements recently agreed it appears the bottom will fall out of the sheep market. People who have invested heavily in sheep will lose substantially. There are clouds over the beet industry and the production of cereals and milk. We must give the farming community all the financial help possible. It was mentioned that we have fallen down badly in providing proper housing for animals, with the result that we are not getting a proper return in the beef industry. I agree with that view. The ACC, and the banks, should make loans available, at a subsidised rate of interest, to farmers who are anxious to improve the housing of their livestock. We are only scratching the surface in this operation and embarking on a programme of proper housing for animals. Farmers anxious to provide such housing should be given sympathetic consideration when they seek financial assistance.

The decision to allow unlicensed bulls to roam the countryside again was a retrograde step. Great efforts were made over the years to improve the quality of our herds—the fresian breed is an example—and we are all aware of the increased milk production from cows, something which was necessary to bring us into competition with other EEC countries. The quality of our beef was also improved by the restrictions on unlicensed bulls but now they are to be lifted. I hope that those animals are used in a limited way. The lifting of the ban on unlicensed bulls will undo a lot of the great work carried out by farmers and creameries.

It upset me to learn that there had been a big reduction in the use of lime on our land. Of course, that arose because of the decision to abolish the subsidy on lime. As the lime subsidy has been removed the ACC should be encouraged to establish a lime fund to encourage farmers to use more lime, because it is the best form of fertiliser. Land that is not properly limed will not yield a good return. Money should also be made available for drainage. At this stage of drainage and reclamation work it is the small farmers who are being left behind, because those with big holdings and the big operators have carried out that work. Small farmers about to undertake drainage work on their land should be given all the help possible. They require capital to improve the quality of their land. Land is the wealth of this nation, and farmers should be given every encouragement to improve the quality of it. It is the most important item that money could be borrowed for, and because of that money should be made available at a low interest rate for drainage work. It should be remembered that reclaimed land is slow to mature, but farmers anxious to undertake such work are required to borrow over a number of years at 18½ per cent. This is asking them to put a big millstone around their necks. The most vulnerable section of the farming community are being penalised in this regard.

I listened attentively to the many contributions on this Bill which, unfortunately, dealt with the workings of the Department of Agriculture and other Departments. It was because of the size of the Bill the Deputies were tempted to broaden the scope of the debate as much as possible. Deputy Barry asked about the borrowing levels of the ACC. The ACC have authority to borrow, subject to the approval of the Minister for Finance.

Must they get approval for each specific borrowing or up to a certain level? Can they, for instance, borrow £10 million without approval?

They would have to get the sanction of the Minister for Finance.

For each specific borrowing or can the ACC work to a ceiling? Must they get different sanctions for each £10 million they borrow or would the Minister give them sanction to borrow £100 million?

I suggest that the question can better be dealt with on Committee Stage.

We set the ceiling at £350 million in the Agricultural Credit Act, 1978. Business was greater than expected and hence we have to increase the ceiling sooner than was predicted two years ago. That is something everyone welcomes. I should like to tell Deputy Barry that we are not in favour of subsidising interest rates. It would be very costly to do that.

I should also mention that agriculture gets many other forms of assistance from State bodies. Deputies are fully aware that interest subsidies are contrary to EEC rules of competition. The general question of protecting people like egg producers is primarily a matter for the Minister for Agriculture. Deputy P. Barry laid a lot of emphasis on this and I intend to bring the matter to the notice of the Minister concerned.

Deputy P. Barry in his opening contribution and some other Deputies mentioned the farmers co-op bank. We are all reading a lot about it but nothing definite has come to hand. There is no conflict with the ACC. In fact, farmers representatives had discussions with the ACC from time to time about a joint venture. The Minister is following the proposal for a co-op bank with interest, a good proposal. It is a valid one but it raises complex issues which would have to be examined by the Minister and also by the Central Bank.

Deputy M. O'Leary spoke about land purchase. The ACC are very careful to ensure that loans for land purchase will not push up prices. That was already mentioned this morning. Only 15 per cent of their loans in 1978 went for land purchase. For the last four years the average was 12 per cent. The maximum loan for land purchase is £50,000. Deputy O'Leary spoke about small farmers. Small farmers get loans for productive purposes at low rates of interest. Deputy O'Leary also spoke about co-operation with the EEC and keeping abreast with what is happening there. The ACC keep in close touch with developments in the EEC. They are particularly anxious to help farmers who are taking part in the EEC Farm Modernisation Scheme. A number of Deputies touched on this point.

Deputy O'Leary also spoke about leasing land. The Minister for Agriculture is examining the whole question of land structures, leasing and so forth. He will no doubt consider the importance of credit in moving land from aging farmers to younger ones. This is also a matter for the Minister for Agriculture.

Deputy Donegan mentioned flexibility. The ACC enjoy considerable freedom in running their business but they are a very large credit institution. Hence the Minister must ensure that they operate within overall monetary policy. This explains some of the controls exercised by the Minister. It may seem unnecessary to come back to the House to increase borrowing limits but we must bear in mind that this very point gives Deputies an opportunity of reviewing the work of the ACC from time to time and making their contributions. I welcome this and I am sure all Deputies do also. It is a help to the ACC and to the Deputies who would like to make some comment on the work of the ACC.

Deputy Bruton spoke about the 1978 Act and fisheries. The 1978 Act did not give the ACC new lending powers except for fisheries. It has not been necessary to use those powers because BIM are providing sufficient credit for fisheries. The 1978 Act made it easier for the ACC to take security for loans and they found those facilities very useful. It saves time in the issuing of loans.

Deputy Bruton mentioned the credit squeeze. The fact that the Minister recently agreed to the ACC borrowing £25 million abroad shows the Government's appreciation of the importance of investment in agriculture. The Deputy somewhat exaggerated the restriction on credit to agriculture. Total advances owing to banks from agriculture increased from £500 million in February 1979 to £640 million in August 1979. Deputy Bruton somewhat exaggerated when he spoke about a credit squeeze.

Deputy Bruton and a few other Deputies mentioned salaries, particularly that of the executive. This is a matter for the public service. Deputy Bruton made various suggestions and I will convey his views to the ACC.

Deputy Hegarty spoke quite a lot about extending the advisory services. This matter is being considered by the Minister for Agriculture. One of the principal functions of the new body, AnCOT, will be to organise a better farm advisory service. This came very forcibly to me in many of the contributions of the Deputies. The Deputy also mentioned interest paid on deposits. The matter is kept under review by the Minister for Finance. It raises wider issues such as the general level of interest rates in the country. I am sure all Deputies appreciate that important fact.

Most of the points raised about the Land Commission are proper to the Minister for Agriculture, who is examining the whole question of land purchase and distribution.

Deputy O'Keeffe spoke of limits on borrowing by the ACC. As I have already stated in reply to Deputy Bruton, it is good to maintain limits and this gives the House an opportunity of discussing the working of the ACC from time to time.

Deputy E. Collins spoke about borrowing £25 million abroad. Some of the money will be borrowed from Germany. Negotiations are still continuing with foreign banks but we do not yet know the countries from which all the £25 million will be borrowed.

Deputy D'Arcy referred to interest rates. The Minister is very concerned about the high level of interest rates but markets for money these days are highly competitive and one has to pay the going rate. The Minister and the Central Bank are keeping the situation under constant review. It would be very costly to subsidise interest rates and this raises difficulties with the EEC. The Deputy spoke quite a lot about cheque books issued by the ACC. This matter is still with the ACC, who are examining the issue, a very complicated one. One of the big difficulties, for example, is arranging clearance facilities. The ACC are not yet convinced that the operation of cheque books would be as simple and as profitable as the Deputy implied. However, the matter is under consideration by them.

Deputy Clinton referred to development loans. There is no intention of reducing the repayment period, which still remains at 16 years.

Deputy Deasy referred to the £25 million being borrowed abroad and said that it should be distributed in a matter of weeks. I can tell the Deputy that it will be distributed in a matter of weeks.

I believe I have covered all the points which referred specifically to the Bill. As Deputies will appreciate, I cannot answer for another Minister.

I thank the Deputies for their support for this Bill. I will convey some of their suggestions to the Board of the ACC. I should like to join in the tributes which have been paid to the Directors and staff of the ACC, past and present, who have contributed so much to the success of the ACC. I can assure Deputies that the ACC are well equipped to cater for the needs of agriculture in the eighties.

Question put and agreed to.
Agreed to take remaining Stages today.