Vol. 331 No. 3
I move:
That a supplementary sum not exceeding £37,227,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1981, for the salaries and expenses of the Office of the Minister for Agriculture, including certain services administered by that Office, and for payment of certain subsidies and sundry grants-in-aid.
The main Estimate for Agriculture for 1981 amounted to £158,275,000 and an additional sum of £35,362,000 was provided in a first Supplementary Estimate in July. This second Supplementary Estimate brings the total net provision for the year to £230,864,000, which is almost 46 per cent above what the previous Government allocated to agriculture at the outset.
Could we have a copy of what the Minister is reading out, please?
The need for the second Supplementary Estimate is mainly twofold — firstly, to fill the gap our predecessors created by underestimation in some key areas and, secondly, to provide funds for certain new measures contained in the Government's programme.
The largest increase is £13.3 million under Subhead M.1. This covers the farm modernisation scheme including western measures and the interest subsidy for development farmers. The original allocation in respect of capital grant payments under the farm modernisation scheme and western measures this year was £42.2 million. This was an unrealistic allocation, as the 1980 provisions totalled as much as £59.5 million. Grant payments this year are likely to be £50.5 million and so an additional sum of £8.3 million is now required under Subhead M.1, together with £5 million for the interest subsidy.
It is sometimes claimed that farm development is grinding to a standstill. This is far from being the case. Approvals for new investments in land improvement, new buildings, etc., have been running at a high level, showing that, despite their difficulties, farmers have confidence in the long-term future of agriculture.
On 1 September, an interest subsidy scheme was introduced, to give relief on the interest payable on capital borrowed by development farmers under the farm modernisation scheme. The scheme, which is partly financed by the EEC, provides for a 5 per cent subsidy for two years and applies both to existing loans and to loans contracted for future development. To date about 5,000 applications have been received. These are being processed at the moment, and payments will be issuing, it is hoped, inside the next few weeks. A sum of £5 million is provided for the scheme for this year.
In addition to this subsidy scheme for development farmers, a similar subsidy scheme for other farmers participating in the farm modernisation scheme was announced in the House two days ago. The Supplementary Estimate includes a provision of £3 million under Subhead F.3 for this scheme. In addition, discussions are in progress with the lending institutions, with a view to introducing a special measure to help the hard core of farmers with very serious repayment problems. These discussions are well advanced, but the working out of a detailed scheme is a rather complex matter.
Another large element in the Supplementary Estimate is an additional £8 million under subhead M.3 for livestock headage grants to farmers in the disadvantaged areas. Half of this extra amount is to cover the underprovision made by the previous Government, while much of the balance required is for the increase in the sheep headage grants announced in the House on 22 July. These increased sheep headage rates are £9.50 per ewe on the first 150 ewes and £6.50 on the next 50 ewes in a flock, compared with the flat rate of £6.50 announced by the previous Government.
An additional £5.138 million is being made available under subhead E.1 for the consumer subsidy on liquid milk, bringing the total expenditure on this subsidy in the current year to almost £22½ million. The National Prices Commission approved an increase in the retail price of milk with effect from 18 August and, in keeping with the commitment in the Government's programme that prices for certain basic foodstuffs would not increase further in the current year, the entire increase is offset by a higher subsidy. Under Subhead A.1 provision is made for a further £2.998 million to meet the cost of special pay increases granted to various grades of Department staff during the year. The increases under subheads B.1, B.3 and B.15, amounting to almost £2.5 million, are also due to special pay increases by the University Colleges, An Foras Talúntais and An Chomhairle Oiliúna Talmhaíochta. By far the biggest item here is a sum of almost £2 million for technicians in An Foras Talúntais, who received a back-dated increase in line with comparable staff in the hospital services.
An additional provision of £923,200 is made under subhead A.4 for Post Office services. The cost of these services (telephone, telegram, telex and postage) has increased substantially in the current year. In addition, the sum allocated originally for postage was based on an estimate made by the Post Office, which proved to be on the very low side.
Under subhead C.2 a sum of £11,040,000 was provided in the main Estimate, but it is now necessary to provide an additional £1,620,000 to meet the cost of the bovine tuberculosis eradication scheme. The increased expenditure is attributable to higher fees payable to veterinary practitioners for TB testing and, to a smaller extent, some increase in the number of reactors removed for slaughter.
It is no secret that progress on TB eradication has been disappointing. Admittedly there is a steady, if unspectacular, decrease in reactor incidence figures, but more than 5,000 herds are restricted because of TB and there has been a disquieting increase in incidence in the midland counties and some major breakdowns elsewhere. Clearly, existing measures for eradicating this disease are not achieving the required results. After more than 25 years of effort and the expenditure of massive sums from the Exchequer, some changes are now called for. I do not propose to say more at this stage, but I can assure the House that the effectiveness of existing procedures is currently being reassessed and whatever modifications are needed will be introduced as quickly as possible.
The position in regard to brucellosis is much more encouraging. The excess arising on TB is, in fact, more than offset by a saving of £1,720,000 on brucellosis under subhead C.3 and a saving of £300,000 on the hardship fund under subhead C.5. The reduction in the expenditure on brucellosis arises mainly because the number of reactors removed for slaughter is lower than anticipated. This is a measure of the success of the brucellosis eradication scheme. I am confident that, with full farmer co-operation, the present rate of progress can be maintained with full eradication achieved in the not too distant future. Expenditure from the hardship fund in this year will be around the same level as in 1980 but, because of carry-over from last year, not all of the grant-in-aid voted for 1981 will be needed.
A sum of £800,000 is required under subhead F.2 for payments to lending institutions against the exchange risk on Euro-loans made available by them for agricultural productive investment. These loans totalled £100 million and have been most useful in encouraging farm investment in present circumstances. The provision of £800,000 takes account of the recent realignment within the EMS of the German and Dutch currencies, in which most of the Euro-loans were borrowed.
Under Subhead M.5, provision is made for an additional £416,400, which is required to cover adjustments to Ireland's FEOGA accounts for 1974 and 1975. The closing of these accounts which total some £175 million in all, has only recently reached finality in Brussels.
There are savings on a number of subheads. A saving of £569,000 arises under subhead B.16, because some expenditure by ACOT on western package projects will not arise in 1981, because the programme was not approved by Brussels until April. There is a saving of £3.58 million under subhead D.9, which relates to schemes for the production of additional winter fodder. Due to industrial action by ACOT staff, there has been considerable delay in having completed application forms furnished to my Department. This will have the effect of reducing the number of grants likely to be paid this year under the schemes.
Under subhead E.4, provision was made for a payment of £200,000 to the Pigs and Bacon Commission for the promotion of pigmeat consumption and exports. The saving of £100,000 arises because the Commission have not come forward with promotion projects on which the funds provided could be spent.
Waning support for the Pigs and Bacon Commission as a result of decisions by the European Court in Luxembourg and the Supreme Court in this country has affected their role as the centralised exporter of pigmeat. Discussions have been taking place with the various interests involved in the industry about the future role and functions of the commission. I am hopeful that these discussions can be brought to a speedy conclusion.
The saving of £6.047 million on subhead M.4 arises mainly from a lower intake of beef into intervention than had been anticipated. Receipts from the EEC under subhead N.18 are also down by £7.817 million for the same reason. There is a net overall increase of £1.77 million on intervention operations for the year. This arises because the deboning rate paid to meat factories was increased earlier in the year and because of higher interest rates on capital borrowed to fund purchases into intervention. My Department have now to pay 17¼ per cent interest on money borrowed for this purpose, while we receive a standard recoupment rate of only 9 per cent from the EEC.
A saving of £3.555 million arises on subhead M.10, which relates to the EEC Programme of Special Measures for Ireland. These include a silage subsidy for first-time silage makers, a subsidy on ground limestone and an AI subsidy scheme. The saving arises mainly because processing of applications under the silage scheme has been delayed by the industrial dispute at ACOT, to which I referred earlier, and because limestone usage since May when the special measures were approved in Brussels has been less than anticipated.
There is a net deficiency of £14,443,700 in receipts. Over half of this is attributable to the reduced recoupment from the EEC for intervention operations, which I have already mentioned. There is also a reduction of almost £4½ million in receipts from the EEC in respect of the T.B. and brucellosis eradication programmes. This arises because of a delay in the consideration of my Department's claims in Brussels, which makes it unlikely that the funds provided for will be received by the end of the year.
Another sizeable shortfall — £1.94 million — relates to the receipts from the UK Government in respect of the beef variable premium on exports of beef to the UK.
As I indicated at the outset, this Supplementary Estimate will result in total State expenditure of almost £231 million for agriculture in 1981, which is some £72½ million more than originally provided. The extra provision for agriculture is being made by the Government notwithstanding the cut-back in public expenditure generally. This shows the Government's commitment to helping farmers to meet their current financial difficulties and to bring about an improvement in farm incomes as well as the expansion in agricultural output which is of such importance to the entire national economy.
The Government's programme envisages a range of measures to assist the agricultural industry and boost production. In our short period in office we have already put many of our proposals into effect. Others are being considered for implementation in the months ahead. Our whole objective is to stimulate renewed agricultural expansion and growth, and the additional funds which we are now seeking will contribute to the achievement of that objective.
On a point of information is it the practice for the Minister to circulate his statement on a Supplementary Estimate? In the case of all other Departments Ministers' speeches are circulated. I was wondering if the Minister will, in fact, circulate his statement.
It is the practice and he just did not do it.
I understand that there was a breakdown, that copies were ready but were not circulated.
I apologise. Copies were ready. They are in transit at the moment.
Has the Deputy a copy now?
No.
Could I give the Deputy my copy now? I have finished with it.
I have a copy.
Could I ask where the Deputy got it?
Unfortunately, there was a breakdown and the Minister has apologised. I would like the Deputy to have my copy, if he will. Deputy MacSharry.
Thank you very much.
First of all, I want to take up something that has been said by the Minister of State — in fact, it has gone up now a bit as compared with what he said last night — that there is around £70 million additional expenditure for agriculture this year. The Minister himself said this on numerous occasions. Today in the Minister's speech it is £72½ million extra for agriculture this year. The fact of the matter is that the gross estimate — gross estimate — for agriculture in the budget was £239½ million. The gross estimate under these two Supplementary Estimates is £291 million. That is a difference of £51½ million, not £72½ million. All Ministers, as the Minister of State has done here when introducing a Supplementary Estimate, say that it is to fill the gap their predecessors created by under-estimation in some key areas and, secondly, to provide funds for certain new measures contained in the Government's programme.
I should like to go through the main increases. The first one that the Minister of State has referred to is the increase in the farm modernisation scheme of £13 million. Above all expenditure, I am delighted to see that the expenditure on the farm modernisation scheme is continuing at a high level although it will not be as high, even with this Supplementary Estimate, as it was in 1980 when around £60 million was spent under the scheme.
It is heartening to see that there is still some little confidence left in the agricultural community. Money spent under this heading is money that provides added production capacity for the agricultural sector and creates quite a lot of employment. At the beginning of the year I do not think anybody felt that there would be continued activity under this heading as compared with 1980. Therefore, I welcome the increase under this heading. Nobody from this side of the House when we are here or from the other side of the House when we were over there claimed that farm modernisation was grinding to a halt or to a standstill, as the Minister of State said. The man who claimed that most consistently in the House and throughout the country is the Minister of State, Deputy D'Arcy. No other person said that as much as he did over the last 18 months. It is galling to find it in a statement read out by the Minister of State here today. Nobody ever said that. Quite the contrary, always the opposite was said. It was the one hopeful sign in the agricultural sector over the last year and I am glad that that is still the position this year.
Let us look at the £52 million — not £72½ million as mentioned in the Minister's speech — of additional gross expenditure this year. Of what is it made up? Let us see how it helps the individual farmer. It is all right to say that there is £72½ million more for agriculture and to create the impression in somebody's mind — definitely not the farmer's, because he knows the position — that there are millions and millions being spent and given to farmers. Maybe the reason is to try to halt many of them from joining the cavalcade that is on its way here for tomorrow. The farmers, above all, know that this additional expenditure by the Department of Agriculture and its agencies is not going into the farmer's pocket. Let us look at the main increases. Farm modernisation, granted, that is development work. The farmers themselves are providing three times more expenditure than is provided here for grant purposes. We should welcome very sincerely that type of development. The other major item of increased expenditure is something that happened since the budget, namely, food subsidies, which are to help the consumer, not just the farmer as a consumer, but all consumers, in relation to the price of milk, butter and bread. There is £15½ million being provided there for something that arose months after the budget. After the huge price increase we succeeded in negotiating in Brussels as compared with previous years and to cushion the impact on the consumer and the CPI, we introduced the food subsidies costing at that time roughly £10.5 million. Since then, because of actions by the Government which have increased inflation further they have had to add some more to the food subsidies. It cannot be said that the £15.5 million is going to the farming community or the agricultural sector. I always argued during my time in the Department that this should not be a subhead under the Agriculture Vote. We can now see the reason. I am not against food subsidies, and introduced them in the first instance, but this £15.5 million will benefit us all, not just the farming community.
Let us look at the other items of expenditure. An additional £4 million is being provided for salaries, wages and post office charges under a scheme which the Minister has announced will benefit farmers. I am not in any way critical of this expenditure because it is just entitlement of the staff within the Department of Agriculture, but I am pointing out that this £4 million will not find its way into the pockets of the farmers. The increases in post office charges occurred since our last budget and it is ridiculous for Ministers to say in introducing Supplementary Estimates that we underestimated the amounts of money required.
It is a fact of life.
The other increase is under the EEC special measures. This amounts to about £6 million, having been reduced from £9 million. We in government were proud to introduce these measures. When we hear Government spokesmen claiming to have provided an additional £70 million for the farming community we must examine exactly what has been provided. Prior to the election Fine Gael stated that they accepted that the farming income gap must be closed and should be restored as soon as possible to not less than 1978 levels in real terms. They have provided a total of £11 million in new measures which are as follows: £3 million interest subsidy for 70,000 farmers, amounting to 25p per day; £5 million for the EEC interest subsidy which I negotiated; £2.5 million to increase the sheep subsidy from £6.50 to £9.50. These are measures provided by a Government who said that farm incomes must be restored to 1978 levels. The Minister for Agriculture has bandied the figure of £600 million as the amount required to achieve that objective. He will rue the day he ever gave that figure because he will be hung on it forever, especially in view of the fact that they have provided only £11 million.
I could speak on this subject all day but I know there are a number of people behind me and on the other side who wish to speak, some of whom have tried on several occasions to contribute to discussions on agriculture and have been unable to do so because of time limits. We are again subject to a limit today and I will not take up too much time.
I referred previously in this House to a speech made here last July by the Minister of State at the Department of Agriculture, Deputy D'Arcy, during which he stated:
The reason why some of our programme was not announced yesterday is that the Minister and I are currently engaged in consultations with the banks and the ACC. This is the valve from which can be released the expansion as far as agriculture is concerned in the coming year. There is no use in releasing that valve next March or April as the previous Minister did.
I presume that reference is to myself. The Minister of State continued:
Action has to be taken now. I hope this announcement can be made around the first week in September although I hope it will be a little sooner.
The same Minister in his speech this morning stated:
In addition, discussions are in progress with the lending institutions with a view to introducing a special measure to help the hard core of farmers with very serious repayment problems. These discussions are well advanced but the working out of a detailed scheme is a rather complex matter.
If the farmers have an opportunity to read what we have been saying here today they will realise the effects of the Government's actions in the past five months.
I would refer particularly to the statement of the Minister of State in which he said "action has to be taken now". He also said they would not do the stupid thing the previous Minister had done when he announced something in April or May. Of course their action was to increase duties and today we have before us the second Supplementary Estimate to provide funds for additional measures introduced by us when we were in Government, plus additional costs which normally arise in various Departments because of staff, telephone charges and so on. There has been a £20 million reduction in appropriations-in-aid but unfortunately the Minister wants to count that £20 million twice. One must look at the gross expenditure of the Department, £291 million as against the figure in January last, and one gets a reduction of £52 million. After five months in office, the Government are giving a total sum of £11 million for new measures.
I should hate to think that somebody is trying to pull a trick and later to try to blame the officials, who are blameless in this. There seems to be some sort of con job or trick going on. At the beginning of the statement the Minister attacked Fianna Fáil for not providing sufficient money and later he spoke about a deficiency. He said:
There is a net deficiency of £14,443,700 in receipts. Over half of this is attributable to the reduced recoupment from the EEC for intervention operations, which I have already mentioned. There is also a reduction of almost £4½ million in receipts from the EEC in respect of the TB and brucellosis eradication programmes. This arises because of a delay in the consideration of my Department's claims in Brussels, which makes it unlikely that the funds provided for will be received by the end of the year.
The Minister did not say these moneys will be received. They will come in next year and they will represent roughly the sum looked for in the Supplementary Estimate. It is a sizeable sum of money in any language, but we must put it in perspective if we are to be honest with the community and not create the impression that farmers will get every penny of this money. They will get very little of it. The entire amount provided since July is less than £11 million and we must contrast that with the full picture for agricultural expenditure this year and with the actions the Government have taken and how they affect the agricultural community.
The July budget added 5 per cent to inflation. The Government can argue until the cows come home but that is the figure. When I was Minister for Agriculture I had to listen daily to criticism from Opposition benches and from outside commentators, including farmer's leaders, that every 1 per cent increase in inflation took £15 million out of farmer's incomes. I do not know if that figure is correct but it is one we had to listen to and I have not seen it contradicted. Five times 15 are 75 — £75 million is now being taken out of farmers' pockets because of the 5 per cent inflation increase caused by the July budget, yet the Government are handing out a measly £11 million. In other words, the farmers are £64 million worse off. I will compare that with the situation when we were in office. There was a serious problem in agriculture.
You did nothing about it.
The deputy was not here, and I am now telling him so that he will know and try to improve matters, because improve them the Government must.
We have to.
Let us see what they have done. We experienced an inflation rate of 16 per cent to 18 per cent but the improvement in farmers' incomes matched that because of better commodity prices and because we worked very hard to provide special measures at home and in the EEC. There was a substantial increase in agricultural prices of 14 per cent in March and April this year. The measures we succeeded in achieving in Brussels and at home brought up the additional money for farmers by more than 17 per cent, relatively the rate of inflation. This led independent economists to admit last April that we had halted the very serious decline in agricultural incomes and that indeed we created the atmosphere for a 5 per cent to 7 per cent real increase in agricultural incomes.
What about the 2 per cent levy?
The Deputy is living in the past. I am talking about April of this year when, according to independent economists, we had halted the decline in agriculture and were on the road to progress. In their first five months the Government have taken £75 million out of agriculture and put £11 million in. That is a shortfall of £64 million. That is taking roughly 5 per cent of the 17 per cent increase we had provided for in farming prices away from the farming community. It is no wonder they are so frustrated and so angry, especially having regard to the statements made by Ministers. The Minister of State, Deputy D'Arcy is putting a brave face on it. He announced a few things a few times. He announced the same things a few times——
The Deputy is not doing badly himself.
——which have not come into operation yet. He does not sit at the Cabinet table. Last week in Cork the Minister of State, Deputy O'Keeffe, announced the introduction of another subsidy. In every corner of the country Ministers are announcing the introduction of subsidies of one kind or another, but the reality is that no more is being provided than we had negotiated in the EEC and committed the Government to do in May of last year.
I could delay the House further in listing the items, in addition to the actions which have increased inflation and taken tens of millions of pounds from farmers' incomes, which the Government have not introduced, and which were announced by us and put into operation by us before June of this year. While I welcome the increase of £13 million for farm modernisation, I am shocked and dismayed to find that the allocation for western drainage is cut back by £1 million, notwithstanding the fact that we got additional money from the EEC. The new EEC measures for the west are cut back by £5 million. We have a Minister of State who is responsible for western development.
When I saw the Supplementary Estimate last night I was saddened to find that the two major operations for agricultural structural development in the west, which we all know is badly needed — and the money provided was not anything like adequate—show a saving of £6 million. That figure can be doubled because all of these schemes get a contribution of at least 50 per cent from the EEC. To me that is tragic. It is another example of how much the Government care about the west. They want to wipe it out. It does not matter whether it is Tuam, or the briquette factory, or Knock airport, they just want to kill the west. They want political vengeance against the west. They will rue the day, because many people living in the east are from the west and they will remember the west. The Government will learn that very fast.
A number of other speakers want to get in, and I hope they will. When I put down a motion last week about the very serious position vis-à-vis the common agricultural policy of the EEC and the very serious position regarding the decline in farmers' incomes, the Government put down an amendment to that motion. I will read the amendment:
To delete all words after "Dáil Éireann" and substitute:
"Supports the efforts being made by the Government to ensure that the fundamental principles of the Common Agricultural Policy are fully protected in the discussions on the Report of the EEC Commission on the Mandate of the 30 May 1980..."
Largely that was the same as what was in the first part of our motion. The second part is different:
"... and endorses the steps being taken by the Government to improve farm incomes and reverse the downward trend in agricultural output."
On Tuesday night something happened. The Government withdrew their amendment and accepted that they had to take steps from national and EEC resources to halt the decline in farmers' incomes and to restore confidence in the agricultural sector. It is no wonder they withdrew it. In all honesty, how could anybody ask this House to endorse the steps being taken by the Government to improve farm incomes when all they have done so far is to bring about a minus situation of £64 million at least in farmers' incomes. They were right to withdraw their amendment.
This House has now called on the Government to take whatever steps are necessary from national and EEC resources to halt the decline in farmers' incomes and to restore confidence in the agricultural sector. The words used by the Minister of State, Deputy D'Arcy, on 23 July were not to do it in March or April but to do it now. They should do something apart from robbing the farmers further. I want to refer to the confusion which has been created. Talk about the propaganda put out by the Government since they took office about our management of the Government's finances.
It is very apparent.
The Minister for Finance replied to a parliamentary question put down by Deputy Gene Fitzgerald on 18 November. He gave details of how savings announced in the July budget would be made. The first heading is Agriculture and the saving is £7.96 million. The main heads under which savings in column 2 of the reply are to be achieved are staff costs, intervention expenses and the disadvantaged areas scheme. We have now seen in a Supplementary Estimate before the Dáil that staff costs are going up by £2.9 million. Yesterday week there was somebody in the Department of Finance who thought there was to be a saving on staff costs in the Department of Agriculture.
There is a saving on intervention expenses. Somebody in the Department of Finance thought there was to be a saving on the disadvantaged areas scheme, but we now find that the disadvantaged areas scheme needs £8 million more. We now find that an extra £11 million is needed under those headings in the Supplementary Estimate. Who is trying to fool whom, or does anybody know what is happening? This will have to be taken further. It is a very serious matter that this House should be misled by a statement made by the Minister for Finance in reply to a Parliamentary Question and referring to savings in the Department of Agriculture of £7.96 million under the headings of staff costs and the disadvantaged areas scheme. Eight days later in the Supplemenary Estimate we see that staff costs have increased by £3 million and the cost of the disadvantaged areas scheme has increased by £8 million. That is a very serious matter which we will pursue at another time because I do not want to delay the House much further.
I do not believe people on the Government side of the House care about disadvantaged areas because we have seen what they have done about them.
We do care.
I hope the Deputy will put pressure on the Minister because we would welcome that. The major additional benefit to the agricultural sector and the farmer announced by the Government was the increase in the sheep headage payment. A grant of £2½ million was announced but, like everything else they have been doing, there is a trick in that also. Those of us who know a little about disadvantaged and mountain areas know that the only type of exercise which can be undertaken on most of those farms is the rearing of sheep and beef cattle. There were limits on the numbers who would qualify but the most serious development, as far as disadvantaged areas are concerned, is that they are now going to combine sheep and cattle headage payments. Many farmers who are depending on headage payments, which are income supplements, not incentives—the EEC introduced this scheme because of the serious income situation of farmers in those areas — will suffer great hardship in disadvantaged areas because the income supplement they would have got in addition to the sheep headage payment, under the cattle headage payments has now been curtailed.
The House must be honest and sincere about the serious situation confronting the farming community and with which they have had to live over the past couple of years. When I held the honourable office of Minister for Agriculture we recognised the very serious difficulties and we set about using every means at our disposal to resolve those problems. Between national and EEC measures, over an eight to ten month period, we provided additional hundreds of millions of pounds. We were very careful about the rate and level of inflation because we knew how it affected not only the economy but, above all, the agricultural sector. The agricultural community, having gone through a difficult couple of years, are now sentenced to another period — I hope it is short — of gloom because of the actions of the Government. An additional sum of £72 million has been provided for agriculture according to the Minister's statement which, with a drop of £20 million for Appropriations-in-Aid ends up as £52 million. When one takes into account the various items to which I have already referred, food subsidies and farm modernisation grants to which farmers are entitled, one can see that the sum total provided by the Government is £11 million. The Government have taken £75 million out of farmers' incomes because of their actions in increasing inflation. It is no wonder farmers are frustrated and angry. Arising from the motion accepted by the Government this week, this House has asked the Government to do something now from national and EEC resources. We will be looking forward to solid action. Money is urgently needed to solve the plight of the farmers.
Before I deal with the Supplementary Estimate, I should like to refer to the last speaker's reference to our criticism of their management of finance. It was a rather arrogant statement and not in keeping with the facts. Since the Supplementary Estimates were individually introduced I have seen what the exact position is and was vis-à-vis the January budget. The Defence Estimate was £15 million short, the Environment Estimate was £30 million short, causing a shortfall in housing. Social Welfare was £37 million short and, because of an underfinancing of agriculture in the January 1981 budget we had in July to include a Supplementary Estimate of £35 million and now we have to include a Supplementary Estimate of £37 million. This is a condemnation of the former Government who completely mismanaged finances in the different Departments. If the money is not there it is not possible to do the job. The January 1981 budget is the main cause of our problems. Irrespective of what Deputy MacSharry said, the different Supplementary Estimates clearly indicate that there was bad management and indifference to what was needed to continue running Departments for 12 months, which necessitated a supplementary budget in July. They did not include it in the January budget because of the impending general election.
I welcome the Supplementary Estimate. It is urgently needed for agriculture which is suffering so badly at present. While there may be a shortfall in some of the Estimates, we must appreciate we are doing the best we can in a serious financial situation. As a rural Deputy I know from the many applications I have had in connection with farm modernisation grants, that people have been told that their grant cannot be paid because the Department were waiting for the Supplementary Estimate to enable them to pay grants to farmers.
That situation was created by the shortfall in the January budget. There was not enough money to ensure that the developments carried out by these farmers would be covered. Thus we created further problems for these people. The people I represent, small farmers who have courageously taken on these jobs, need every assistance. It rings very hollow when I hear what Deputy MacSharry, former Minister for Agriculture, said about the way finance was handled by the previous Government.
I have travelled my constituency and I have seen the problem. This is one area where the money was needed, but the farmers could not get it because it was not there. We pleaded with farmers to improve their farming methods. They courageously took the steps that were needed, but when they needed money to help them it was not there. This Government have the money and I hope it will be available before Christmas.
I would like to refer to the disadvantaged areas scheme. I attended a meeting in my area last Saturday in connection with a disadvantaged area covering North Tipperary, South Tipperary and part of East Limerick. Neither the last Government nor the previous Coalition Government can take any credit for the handling of this scheme. The scheme was submitted in 1974 and finally adopted in 1978. In my constituency the better-off farmer is included because he is in a certain electoral division while poorer farmers are not included. A further submission must be made to Brussels to ensure that these unfortunate people are included. I can assure Deputy MacSharry that we in North Tipperary are concerned about the disadvantaged areas and hope that through the efforts of the agricultural committees, Deputies and the Department of Agriculture, this submission will be made shortly.
In recent weeks there has been a great deal of unease and concern throughout the country because of a statement which said that, despite the very large sums of money which have been spent on eradicating bovine tuberculosis, it has been unsuccessful. This is an unfortunate and sad ending to an attempt to resolve this problem and deserves a special inquiry. Eight or nine years ago an inquiry was made into an aspect of that scheme when information was received that money had been spent in the wrong direction. In view of the recent statement about the abject failure to resolve this problem the Department should deal with this as a matter of urgency. We talk about farming problems, but if this disease is not eradicated it can do a lot of damage despite all the taxpayers' money that has been spent.
We have a particular problem in my constituency with regard to bovine tuberculosis. We urgently need a second TB office in North Tipperary. It has been sanctioned and discussions are going on between the Office of Public Works, the Department and the ACC, who can provide the office in Nenagh. I plead with the Minister to have this matter resolved as soon as possible because we are coming to the peak period in livestock movement. Hundreds of farmers have to travel many miles to Tipperary town to an office which is already overworked.
We have heard a lot about the threatened closure of the Tuam factory. We were all concerned that money should be given to that factory rather than invested in a scheme which was not as viable, because we were concerned about employment. I extend that concern to the overall picture of Comhlacht Siúcre Éireann Teoranta because we have a factroy in Thurles which at the moment seems to be going well, but the agencies involved must ensure that substantial capital investment will be made available to that industry in order to avoid a Tuam-like situation. There is no point in waiting until Saturday to find out the factory will be closed on Monday. I am concerned about the jobs in that factory and about the commercial life of the area. We have one natural resource industry which is very near exhaustion and 600 jobs are involved.
We must ensure through the Department of Agriculture that money is made available to CSET so that the Thurles factory is made as viable and as modern as Mallow and Carlow. We owe it to the farmers, the workers and the commercial life of the area. I ask the Minister of State to convey to the Minister for Agriculture that we are very concerned about this factory at Thurles. We may not have reached the same serious stage as Tuam, but the wise man looks after his business before it gets into difficulties. I urge the Minister to deal with this matter as quickly as possible.
I have a few questions to ask the Minister. I ask him to ensure that the various grants overdue to the people of the west and especially County Donegal are paid as soon as possible. There are areas in County Donegal where inspections have not yet been carried out. These are delaying tactics to ensure that the grants will not have to be paid until next year. I am making a special appeal on behalf of those people that the headage and silage grants be paid, that inspections be carried out immediately and that the payments be made soon after. I appeal to the Minister to have those payments out before Christmas. I am sure he appreciates that, with the rate of inflation and other economic difficulties, it is becoming more difficult for families to survive there. The amount of the grants may not seem a lot to some members but to those who are waiting for them and those who are deprived they represent a lot of money. They are due those grants but at this stage I believe they would look upon them as a bonus if they were paid before Christmas.
I was disappointed to learn that £6 million will be deducted from the original allocation for the west of Ireland. However, the people of the west will not forget that. They have long memories. It should be remembered that many people who were born in the west now live and vote in the east of the country. In the not too distant future they will remind the Government of the deduction of £6 million from a deprived area. It is because the west is a deprived area that Ireland has been declared an underdeveloped region in the Community like southern Italy, and it is because of the conditions that prevail in these areas that those living in the midlands and south get special EEC benefits. Instead of deducting £6 million the Government should be adding at least that amount to help develop the west. In reality a deduction of £6 million means a loss of £12 million, because the Government money would be covered pound for pound by the EEC. The people of the west will not forget this move and the Minister would be wise to ensure that in the next budget they are given their just reward. It is because of the people of the west that Ireland gets a reasonable allocation from Brussels. Finally, I hope the Minister can give me an assurance that the cheques I have referred to will be issued to the people in my constituency before Christmas.
I cannot say that in this Supplementary Estimate the Minister is providing sufficient money to satisfy all the needs of the west, or any part of it, but I recognise that the Government took over in the middle of the year and that they found that requirements were underestimated for the year ahead. The Minister did not have much option but to raise the necessary finance to fill the gaps that existed in the policies already in operation. He succeeded in adding a little for the most urgent needs of the agricultural community. I hope that in the forthcoming budget an effort will be made to relate spending to a policy which will help to encourage production and restore farm incomes to a decent relationship with the incomes of other people. I hope that by the same means more jobs will be created and our balance of payments improved.
In relation to the point made by the last speaker about the western drainage scheme and a reduction of £6 million, it is important that we understand what all this is about. Under the farm modernisation scheme grants were made available for drainage which was part of a farm plan prepared by a farmer. The grant amounted to 50 per cent of the actual cost without any limit on the amount of money a farmer might invest in the reclaiming of an acre. The western drainage scheme grant, amounting to 50 per cent of the cost, was subsidised by 10 per cent from Brussels. That grant was increased to 75 per cent and the Fianna Fáil Government reduced their commitment and investment in drainage in the west. They attached to this a limit and a fixed costing which were not updated or upgraded. We were supposed, on paper, to have been getting a 70 per cent grant towards the improvement of land under the western drainage scheme but, in fact, we are getting considerably less than 50 per cent. That is the sort of dishonesty we have become accustomed to when people do not understand what this is all about.
The truth is that the grant under that scheme was reduced and that since the Government took office no reduction has taken place. There was not a reduction, as a result of the Supplementary Estimate, in the amount of the grant available to individual farmers. For eight months before the former Minister left office his officials had left on his desk more realistic costings on drainage in the west but he went through his budget and prepared his Estimate ignoring those realistic costings. If we could see those costings I believe we would learn that they are not nearly as generous as the money provided to people involved in industrial development with the IDA and other sections. I would love to see them compared with the costings county councils or the Office of Public Works would prepare if they were to carry out similar work. However, they represent improved costings, but the Minister ignored them and continued to give farmers something like 50 per cent of the amount the scheme states farmers are entitled to. That Government ignored completely the cost increases and the difficulties experienced in the agricultural sector in the west.
I admit that the last Minister, like any other Minister, had problems and we should face up to that situation. We should try to relate our remarks to reality and put forward honest appraisals of the problems and who created them. I am not trying to blame the former Minister for all the problems of farmers. But, having failed to solve them, having presided over them getting steadily worse, he should have come to the House in humility about his failure and tried to be honest and constructive with the person who has responsibility for doing the job at present. It was an extraordinary performance for a person who should know all the red herrings, the references to unimportant things and trying to make £5 million or £6 million into something of major significance to the agricultural industry.
One thing that intrigues me when I look at this Supplementary Estimate, and the Estimate for the Department of Agriculture, is with all the schemes we have why the situation is as bad as it is? At one time I used to understand most of them but in recent years it would take a computer to store all the details relating to all the little schemes that have been created mainly in response to political situations and in an effort to shut somebody's mouth for the time being. They were introduced in the full knowledge that the problem would not be solved. I believe we could compress the activities of the Department into a narrower field and that that would have a greater effect.
I do not believe that this proliferation of mickey mouse schemes for the west and for the various sectors is solving the problem. In fact those schemes are leading to a wasteful use in administration of important resources. I can see that happening annually. I see more agricultural officers, more cars on the road and more people visiting farmers, but I see incomes steadily dropping. I do not say that those people visiting farmers are the cause of a drop in income but they are not improving the situation. We should re-appraise our attitude to the development of agriculture.
I noticed in the original Estimate that development farmers will get something in the region of 15 per cent of the total Estimate of the Department in direct aids towards increasing production. I have not the exact figure but I am sure that if one examined it one would find that those are the farmers, together with the small number of commercial farmers we have, who produce a considerable proportion of our total agricultural output, far in excess of their percentage as a proportion of the total number of farmers. Yet only 15 per cent of the total budget finds its way into their hands to encourage them to develop further. I agree that the classification of development farmers is incorrect and that that category should be considerably wider than it is at present in the entire farming sector. Nevertheless we must recognise that until such time as a higher percentage of the total money spent reaches their pockets for development we will not achieve the sort of increase in the rate of agricultural growth we should.
I have discovered also that more than 30 per cent of the total money is being spent on the payment of wages in the Department of Agriculture. Most of that is incurred on administration. It does not include the advisory services whose work we must recognise to be considerably more productive and related to increased production than that of the average agricultural officer. I do not propose that we could get rid of all of them overnight. All of us to whom the Minister will listen should be telling him to reduce those excessive administrative costs, thereby ensuring that the money provided finds its way in the form of some type of incentive to farmers. I agree that a distinction should be drawn between the supplementary income and the incentive, but the one should be more the concern of the Department of Agriculture and the other more a social cost which we should be prepared to bear and must bear in present circumstances.
There are a number of things one would like to say about the grants, not only those for western drainage but also those paid for farm development. I would ask the Minister to seriously consider an urgent review of their costings. If those costings were to be calculated by the people who undertake costings for the Industrial Development Authority or some of the other semi-State bodies, they would discover that what the farmers are receiving constitutes a mere 7 per cent or 8 per cent of their total development costs.
There is provision also in this Supplementary Estimate for the protection of borrowing institutions against Euro-loans. The Minister and all concerned should examine this situation very carefully. It amounts to a small amount of money — I think, £800,000. The Minister should examine that carefully and ask those financial institutions what they did with their profits on the loans they borrowed at 7 per cent and 8 per cent and passed on to farmers at 16 per cent and 17 per cent. That situation need never have arisen. I recall three years ago speaking in the Seanad on this subject when I pointed out to the then Minister that, having joined the European Monetary System, we had tied ourselves to the staple currencies of the EEC. We had committed ourselves to not having any serious divergence in the value of our currencies.
What we forgot is that we must exercise a sort of discipline in our economy to ensure that our currency would maintain a realistic value within those bands. Indeed, whether or not our currency has a realistic value is very much open to question as a result of the different performance of our economy from those of the currencies with which we were supposed to retain parity. In the 18 months following our joining the European Monetary System we found that average interest rates being paid by farmers on the Continent were of the order of 6 per cent to 7 per cent. Those are not subsidised incomes because they represent mostly the interest subsidy rather than the direct grant payment. But farmers were borrowing at 2 per cent and 3 per cent interest when they availed of the subsidies that were going. Banks were lending money freely in large amounts at 6 per cent to 7 per cent. Even though we joined the European Monetary System we followed British interest rates. While we had to sell on the same market as our European partners Irish farmers were paying 18 per cent, and some in excess of that figure.
I could never understand why an Irish Government accepted a situation in which, while we were part of the European Monetary System, our farmers were forced to pay those interest rates — and indeed industry as well — while our partners in Europe had money available to them so much cheaper. I raised this with the Minister from the Government side of the Seanad at that time. I received full support. I was told by Senators, who are now no longer Members, that they agreed absolutely and that they could not understand why our Government would not encourage our financial institutions to lend. Because of the common agricultural policy, even had we had a devaluation of the pound we would certainly not have lost the equivalent amount of money because agricultural prices, since they are fixed in units of account, would not have dropped automatically. In fact they would have increased and we would have had an absolute, in-built, automatic protection against devaluation.
The Government at that time were directly responsible. I recognise that nothing can be done about it now because European interest rates have been forced upwards by the dollar. But over a long period the banks quietly borrowed money in Europe at the right rate and openly passed it on to farmers and other investors at a very high profit. Therefore I wonder about the wisdom of the Minister including that type of protection. I recognise that at the time perhaps he was forced into it by powerful institutions who do not always make it known to the public what is their real position or how they transact their deals while producing accounts giving what they want people to believe is their actual position. The full implications of the things they do are difficult to understand on the part of the public generally. It is very difficult to understand why Irish farmers were forced to borrow money in those years at 18 per cent when it was freely available at 6½ per cent and 7 per cent and when devaluation constituted absolutely no risk.
It is difficult to hear ex-Ministers on the other side of the House weep about the situation, to hear Deputy Mac Sharry, who was the Minister responsible at the time, cry about the situation for the past six months, the damage done by the 3 per cent inflation which he magnified to 5 per cent, and which he contended was probably brought about by the introduction of this Supplementary Estimate. This was not something done at the will of the Government but rather because they had no choice. Nevertheless one would find it difficult to understand that he was Minister for Agriculture in a period when the inflation rate was allowed to diverge from the average European rate by as much as 10 per cent. If Deputy MacSharry believes the figures he gave — that every 1 per cent takes £15 million out of the pockets of farmers — then let him calculate what it cost Irish farmers to have a Fianna Fáil Government in office for the past four years. His figure is probably exaggerated. If it were not, we would be building workhouses and hospitals for farmers who would have no income at all in the present year. The situation is bad enough, but Deputy MacSharry must expect the people on this side of the House and the public generally to have an extraordinarily short memory.
Deputy MacSharry weeps also about the situation in the west. I am not saying I have all the answers, but again the former Minister presided over a situation in which the number of sheep on the land in the west, on which he says the farmers of the west depend so much, the number of cattle — the number of suckling cows has dropped by 10 per cent — the number of dry stock, every single item of stock on which the western farmer depends for a living was reduced in number in the two years Deputy MacSharry was in office and in the four years the Fianna Fáil Government were in office. I would like them to recall that this is the situation that they have brought about. Farmers' incomes have dropped by 50 per cent in two years. I am not saying they could have solved the problem, but let them be honest enough to say that the policies that were in existence have been a failure. All their mickey mouse solutions were designed to blind people for the time being with a few pounds for the making of silage and a couple of pounds for crushed limestone. They are only mickey mouse solutions to a problem which is so big that to solve it will require the full co-operation of everybody in this House, the full co-operation of the farming organisations and the Government and a sensible and constructive approach by whoever happens to be in opposition at the time.
Let us not tell the farmers of the west that they are entitled to this, that and the other and that because they are entitled to it they will have to get it, because we know that the taxpayers have no intention of providing the sort of money that we need at this moment to give the farmers in the west the standard of living they need if they are to live in any sort of peace and dignity. We know that the taxpayers are not prepared to do it. That is the sad situation. So let us take the Estimate that is provided and let us ask ourselves how we can take that money and convert it into some sort of vehicle which will lead the farmer to increased production and improvement so that they can bring our young people into employment and improve our balance of payments and all the other things that increased production can do. We have to take a basic look at the whole question of how we are spending this money. What we have got is patch upon patch, introduced one after another in response to the political need of the moment and the need to pacify people before the next election. That will not solve the problem.
We cannot force these people off the land because there are no jobs for them and no prospect of emigration open to them. So we have to design our budget properly. When we joined the EEC the total amount of our budget spent on agriculture was about 14 per cent of our public spending. Today it has gone down to 4 per cent. What did we do? We joined the EEC. We were relieved of the necessity to spend so much money. Our food subsidies were paid for. Incidentally, I do not agree with food subsidies being part of an agricultural Estimate; they are a social consideration and we should redesign this. We complained about it in Europe and we also complained about the situation with regard to food aid. Before I became a Member of this House I noticed that this aid was included in the agricultural Estimates of this House, and it should not be. But we saved an amount of money on food subsidies and on export subsidies. We were able to give our farmers an improved standard of living. But what we did was to transfer a proportion of our budget and our spending into other areas. If we had not joined the EEC and if we had not been relieved of the need to subsidise our agriculture, we would have found that we could not spend as much money today on education as we do. We would not have as advanced a system of social welfare as we have, and it is not very advanced. We would have had serious cutbacks in other areas. We must recognise that through our involvement in the EEC we have been enabled to transfer this spending from agriculture to other areas. But my belief is that we should not have transferred it. If at that time we had taken the money that was saved, the £300 or £400 million that we got when we joined the EEC and had devoted that money to the development of agriculture, to the training of young people in agriculture, which is so important and so neglected, we would not be importing £700 million worth of food this year and we would not have so many young people seeking jobs. We would not have the cost squeeze on our co-operatives and we could have expected to have an increase in agricultural production and developed and borrowed and spent accordingly. But we did not do that and have now found that we have a decrease in agricultural production. We could have avoided that situation.
But at this stage let us ask ourselves what we should do. Let us cease to blame each other for what has happened in the past five to ten years. Let us prepare a plan, in so far as we can, through the use of the budgetary facilities of this House. Let us, for a year or two until agriculture gets out of this mess, raise as much money as we can and invest it to encourage the maximum possible production.
In the area of agriculture, let us divide the social needs of individuals who happen to be in a difficult position from our desire to increase agricultural production. Let us recognise that of this 130,000 people living on the land quite a number of them are not actually farmers. Quite a number of them can never be made viable. But if they can get some part of their living from the land, let us introduce some sort of income supplements which will solve their problem. Let us take our agricultural budget and invest and spend that money so that we will encourage an increase in production from the farmers we know can do it, the ones with the training, the skills and sufficient acreage of land. I do not accept that the budget is being used to do that. In the years ahead we should all realistically reappraise the manner in which we are spending this money.
We have a difficult situation in the west. They have disastrously low incomes. If cattle prices improve by £2 or £3 a hundredweight farmers quickly forget what happened last year. That is the nature of farmers. It is not really their weakness; it is their strength. That is what has kept them there through the generations. The resilience is in the farmers of Ireland. That is a good thing. I recognise that if there is a good morning and a good mart they forget what happened. But the truth is that they have been living below subsistence level for the last two or three years. The headage scheme was not well conceived in the first place. But in this year, by increasing our payments to the maximum allowable by the EEC, we can give the farmers in the west, in the severely handicapped areas, a further £30 million. We can do that and we will only have to raise £15 million from our own resources here. If I were asking the Minister or the Government to raise £15 million to give to those people I might not do it. But because I am asking him to raise £15 million to spend £30 million, because I know he will get £15 million from the Community which we will not have to bargain for, it would be the wise thing to do at this time. In this year it should be done.
I know where some of this money will go. Perhaps about one-third of it will go into the hands of elderly people who may have a little savings and who might put it in the bank; one-third will go towards giving farmers and their families the minimum standard of living they can expect and are entitled to; at least one-third of it will be spent in the purchase of livestock in the development of the farm and farm yard. Almost all the money put up by the State will be re-invested and will justify this action in the years to come. I know it is a difficult situation. I recognise and sympathise with the difficulties of the Minister who came into office to discover that his predecessor either failed to estimate or had not the courage to face up to the cost of administering his Department in the years ahead. I know that in those circumstances it is difficult for a Minister to do all the things he would like to do because he must finance the things to which he was already committed before he came into office. I have considerable sympathy for him. If it were the start of a new year with the introduction of a new budget I might perhaps be a bit more critical.
On the question of disease eradication, the performance of the Department of Agriculture and the veterinary surgeons and everybody involved has been most disappointing. On the situation of serious unjustified breakdowns the actual testing being carried out requires thorough investigation by the Department of Agriculture. I do not wish to blame anyone for what has happened, but the agricultural industry has been paying the price of getting rid of reactors because the Government have not been paying it. Farmers get only a small subsidy towards the cost of eliminating reactors from their herds. Anyone who suffered a serious breakdown in the past year was forced to sell reactor livestock, particularly if it was a dairy herd. That farmer, if he had borrowed, would be in dire straits, regardless of his experience, skill and efforts. If everyone had been doing the job as it should have been done, we would not have the present situation.
I congratulate the Minister on his appointment. I have observed his contributions in this House and in public before he took up this responsible post. I am absolutely confident that he will ensure that the money is spent in the best way possible and that there is no shilling in this Supplementary Estimate that could have been avoided.
I would like, first of all, to congratulate the Minister of State on his appointment and I regret that he was not appointed Minister for Agriculture. As a practising and full-time farmer he would have the interest of farmers more at heart than would his Minister.
I note from the Minister's speech this morning that the need for a second Supplementary Estimate is mainly twofold. He comes on the heels of his predecessor, Deputy MacSharry, who, from October 1980 until he went out of office in June 1981, had brought in no less than 20- odd schemes which were of benefit to farmers. If the Minister wishes, I can list them, starting with subsidies on first-time silage makers, on manures, removal of rates and local authorities being asked to adopt an understanding attitude towards farmers. It is sad to see, in these last few weeks, that prominent members of farming organisations have been threatened with legal action because they are not in a position to pay their rates. I appeal to the Minister present to ask the Minister for the Environment to instruct the local authorities to ask managers and rate collectors to take a lenient view towards farmers who find themselves in difficulties in regard to the payment of rates.
The substantial increases in cattle and sheep headage payments which took place under the previous Minister for Agriculture were of great benefit to the country and brought back confidence into the livestock industry. This year, under the present Minister, there has been no increase in the rate of payment of headage grants to farmers in the disadvantaged area. The beef suckler scheme was a major initiative of the previous Minister to improve cattle numbers. He stated on a number of occasions that the beef industry was one of our greatest agricultural assets. Being an agricultural country with a reputation as producers of quality livestock, we should be concentrating on increasing numbers.
To find when the confidence fell out of the livestock industry, we have only to look back to 1974, to the present Minister's predecessor, Mr. Mark Clinton. who did not bring in any initiative to help farmers who were being forced to take anything from £2.50 to £10 per cwt. for livestock. That was when the farmers in the west took a scourging from which they have not yet recovered. That was when the bottom fell out of livestock production. Farmers, on entry into the EEC, felt that they were into a major market, but within 18 months of joining that market, they found themselves let down totally by a Minister for Agriculture who took no steps to help them in 1974, with the exception of the implementation of a scheme of food vouchers. That proved a major fiddle in itself, as the country well knows. I appeal to the Minister to introduce a scheme of grants sufficient to encourage farmers to return to the rearing of livestock. No doubt, the Minister is aware that on return to schemes of that nature it will be approximately four years before the benefits are to be seen.
The factories benoan the low cattle numbers being received for slaughter. I doubt if they want to remember the beating which they gave the farmers in 1974. I know it as a farmer and all my friends and neighbours and every other farmer, that at that stage the farmer had to go to a middleman if he wanted his cattle slaughtered. If he did not do that, he had to wait in the queue for anything up to six weeks. That is why farmers today prefer to sell their cattle on the hoof, rather than on the hook. Our meat industry has nobody to blame but itself for the way in which farmers now regard it. It saddens me to hear, from some of my friends in Europe, that members of the Government had placed a motion in the European Parliament stating that the refunds on live exports from Ireland should be cut. Having an involvement in the lifestock trade, I make no bones about saying that had it not been for the live exporters and the demand created for Irish cattle in the Middle East and Africa, the situation would now be as grave as in 1974. When the factories get the ball at their own foot, they bring the farmer to the cleaners.
In the 1981 budget, we had further subsidies for farmers, with the removal of rates on farmers of £50 valuation. No doubt, the Minister will agree that no farmer on £50 valuation would, in the present economic circumstances, be earning as much as the average industrial worker. Very few would get within a couple of thousand pounds of it. This is mainly due to the cost of inputs in farming. I ask the Minister to look at the possibility of bringing in subsidies to cut the cost of these inputs. The Minister, as a farmer, is well aware that we are approaching a situation where the cost of our farm products will be out of the reach of the average consumer here and in Europe. Meat, for instance, is practically beyond the buying power of the average industrial worker and the Minister is, no doubt, aware of the fall in the purchase of meat by our housewives.
In my area, the resource tax has not been a problem and neither has income tax for many farmers. However, farmers in bigger farming areas in the south, the midlands and the east, have benefited from the removal of the resource tax and from the allowance of full stock relief for tax purposes.
Under the previous Minister, at the EEC negotiations in Brussels in the spring of this year a record 14 per cent price increase for farmers was the largest single increase ever obtained by our farmers. I wonder if the Minister has decided what increase he will be looking for for farmers in the next round of price negotiations which is about to start. Will he be looking for the 25 per cent that it will take to cover the rate of inflation as created by his Government? How does he intend to explain to farmers the increases in the cost of their inputs caused by the July budget? The increases in VAT and in other indirect costs for farmers are a retrograde step. Only yesterday the Minister for Labour told the House that, without making any request for a derogation, he had allowed the introduction into this country of the tachograph for commercial vehicles. That will add 50 per cent to the cost of transport of agricultural products. Would the Minister consider making an allowance, and at this late stage will he ask his colleague the Minister for Labour to seek a further derogation in Europe in that regard, because it will have unbelievable repercussions on farmers.
I am sure the Minister is aware of the replies which I and other Deputies receive in this House to Parliamentary Questions. Even the Deputies on his own side of the House and on the Labour benches this morning were admitting that the Department were not now paying farm modernisation grants. It is sad that I as a public representative should have to put down questions with regard to farmers' grants. I would prefer not to have to do it. It is twice as sad when the reply is that they will be paid shortly. "Shortly" is over two months now. I know farmers who were promised two months ago that grants would be paid shortly.
When the Minister gets the Supplementary Estimate through the House today I hope he will instruct his Department tomorrow to pay the grants due to the hard-pressed farmers. The lending institutions would be well advised to contact the Minister, because they are looking for those grants. I would say that 99 per cent of the grants are due by farmers to lending institutions in respect of bridging and other loans which are repayable at this time of the year. The Minister should be honest and state that he has not been in a position to pay grants under the farm modernisation scheme. He should not con the people, with the result that every public representative is writing about grants. He should state that he has not had the money and that he will now set about putting those things in order.
I would refer to one Parliamentary Question which was answered approximately a fortnight ago and which shows that the Minister's office is not aware of the up to date position with regard to individual queries. The Minister stated in reply to me that legal documents were being awaited by his Department. That was the reply given on 10 November. In fact, those legal documents had been submitted by the solicitor in the case on 23 September, six weeks before that. That sort of thing is a reflection on the Minister and the way he runs his Department. Having regard to the fact that 33? per cent of the funds spent by his Department are spent on wages I would hope that the Minister could at least give Members of the House true and accurate information in reply to Parliamentary Questions.
Could we have the reference, please?
The number of the Question is 674, Tuesday 10 November.
Thank you.
The implementation of the Western package has been mentioned. I am grieved to see that my constituency colleague, Deputy Nealon, Minister of State for Agriculture, has not stayed in the House since the commencement of the debate. I would appeal to him to come in and at least listen to what his fellow Deputies have to say. If he had been here to listen to his Party colleague, Deputy McCartin, he might not have savoured some of the things he would have heard. The implementation of the western package and western development has been badly set back. I would appeal to the Minister here today to have it implemented and to ask his colleague who has responsibility for that to state what he intends to do. Does he intend to occupy the Department as long as the people of Ireland may decide that he should stay there or as long as the Taoiseach decides that he can afford to keep that sort of Department going? Would he say what he intends to implement with regard to western development? That would be of major interest to the farmers in the West of Ireland.
There are a number of things in the Minister's speech which amused me. He said that:
These increased sheep headage rates are £9.50 per ewe on the first 150 ewes and £6.50 on the next 50 ewes in a flock compared with the flat rate of £6.50 announced by the previous Government.
I should like to point out to the Minister that I am sick and tired of farmers coming to me complaining for the past month when they discovered that another contract had been placed and that they will not receive any live cattle headage payments this year due to the fact that they will have been paid the maximum payable under the ewe scheme. Would the Minister at this late stage reconsider the position and allow payment of the livestock headage grants to those farmers? These are farmers who are prepared to increase numbers. They have considerable numbers of sheep and of livestock. The sheep are kept mainly in mountain areas and the livestock are kept on low-land farms. I would appeal again to the Minister to rescind the decision that was taken, which is one of the small print manoeuvres carried out by the Government in their proposals with regard to agriculture prior to the general election. They pulled the wool over the farmers' eyes. The farmers have not forgotten. The Minister of State is not directly involved because his part of the country does not qualify for livestock headage payments, but he should press within his Department and the Government for the restoration of livestock headage payments to farmers who exceed the maximum, as introduced by the Minister under the sheep headage payments scheme.
There is another matter that should be brought to the attention of the Minister, that is, the possibility of carrying out headage inspections in spring and early summer. This would alleviate the problem of glut supplies of cattle in the fall of the year in the disadvantaged areas. This would not cause greater problems for the Department or necessitate the employment of extra personnel within his Department.
The disease eradication scheme has been referred to. It is suggested that this country has still to seek derogations from Europe with regard to this scheme. I would ask the Minister to carry out a full investigation within the Department as to where the scheme has gone wrong. For the past 25 years money has been spent. Now we have the position where farmers who had clean herds a few months ago and who have not bought in livestock find their herds are being wiped out by tuberculosis. I do not know what has gone wrong. The Minister should examine the position as a matter of urgency.
It is sad to note that there is a saving under the hardship payments with regard to brucellosis grants. I would ask the Minister to examine the possibility of helping farmers who find themselves with serious problems regarding the slaughter of young store cattle under the TB eradication scheme. This can cause a considerable loss of income because such farmers are also restricted from repurchasing livestock and the slaughter value of the store cattle is very much less than the market value, often as little as 25 per cent of the value of healthy animals. The Minister might consider allowing farmers whose cattle have been slaughtered under the scheme to see the veterinary reports from the livestock factory in order to ascertain whether their cattle had lesions.
I appeal to the Minister to introduce in western areas the maximum headage payment allowed by the EEC. We are entitled to recoup 50 per cent of that expenditure from Europe. We should introduce throughout the country the payment of headage at a rate equivalent to that now being paid in the disadvantaged areas. That type of scheme could be much more beneficial to the livestock industry than the schemes which the Government propose to initiate. The Minister might also introduce an annual subsidy for the calf-to-beef scheme in the region of £100 for the first year, £75 for the second and a £25 payment on slaughter.
I am also worried about problems in the grain industry. At harvest time this year merchants were anxious to buy dried grain but it now appears that those merchants will soon be in grave trouble due to the import to the EEC of cheaper products for the compounding of food rations. I would ask the Minister to examine the position to see if something could be done to allow our grain merchants to compete with those imports. Possibly a subsidy could be introduced.
I welcome the Minister of State with responsibility for western development and hope he will be in a position when speaking on this Supplementary Estimate to state the schemes he proposes to introduce and when he hopes to introduce them.
I wish to raise the matter of the con trick played on farmers in the middle of August by the Minister for Agriculture when he totally changed the farm modernisation scheme and excluded farmers who had been told they would receive grants for machinery, tractors and various farm developments. It is sad that farmers who were working to a plan were conned in this way, and I appeal to the Minister to re-introduce the scheme as it operated prior to 15 August. He admitted earlier this week that payments under the farm modernisation scheme were totally irrelevant but he did not promise to increase them to a reasonable level.
Farmers are totally disillusioned by the western drainage scheme, and during the past few months some of them have been told that it will be two years before some of their schemes will be examined. I would ask the Minister responsible for western development to request the Department to make the necessary staff available so that people who apply for grants under this scheme will be enabled to have works carried out within a reasonable time. The Minister for Agriculture might also withdraw the restriction he placed last August on the western drainage scheme.
There is much I could say on this topic but a number of Deputies wish to speak. The Minister must be realistic and ensure that farmers are given the necessary help to overcome present difficulties. It is sad that we are debating this subject as farmers are marching to Dublin to protest at the inaction of the Minister. The farmers who were conned by Fine Gael propaganda prior to the election will have long and sad memories of that programme, and they will remember it at the next election, just as in 1977 they remembered what happened in 1974 and told the Coalition where to go. I wonder what would happen if the Taoiseach decided to go to the country now. He is so much afraid of the farmers of Cavan-Monaghan that he decided not to allow a by-election. I challenge the Government to ask the farming community of that constituency for their verdict on the stewardship of the Minister and his two assistants. They will receive that verdict in due course. Deputy Farrelly, who is so vocal on the other side, knows that it would be in the best interests of the Government to stay away from Cavan-Monaghan.
Once again I appeal to the Minister to give the necessary subsidies and assistance to farmers to enable them to overcome their difficulties. If he considers a 5 per cent interest subsidy of any help to farmers in their present predicament, will he go away and examine his conscience? Earlier this week a leading member of ACOT said at the General Council of Committees of Agriculture that for farming to succeed farmers could not afford to pay any more interest than at a rate of 8 per cent to 10 per cent. Therefore, this 5 per cent subsidy will not be much help to farmers who are paying interest at rates as high as 24 per cent. Even after the subsidy they will be paying double the interest rate that farming can stand. I hope the Minister of State and his colleagues on that side will inform their boss when he comes back about some of the recommendations I have made so that he might be encouraged to follow realistic policies.
I welcome the Supplementary Estimate, which is of great importance as far as Irish farming is concerned. I wish to place on record the tremendous hope and confidence the Government expect farmers to have in the proposals we have for the betterment of agriculture at a time when money is a very scarce commodity. It is a fine and noble thing for the Government to come into the House with this type of Supplementary Estimate to try to ensure that the programme on agriculture which we have embarked on will be maintained.
I listened carefully to Deputy MacSharry but I have no intention of speaking for long because a number of Deputies from both sides have been offering. I will comment that it is amazing how times change as Governments change. Earlier this year, during a debate in the Seanad on the price fixing arrangements negotiated in Brussels, we were told that Deputy MacSharry, the then Minister for Agriculture, had come back with a good deal. I count him as a good negotiator, but he presented that deal to us as one that would mean the end of Irish farmers' problems. Today the same Deputy told us that our big problems began four or five months ago. If he was trying to score political points, he did not get very far. He said Deputy Dukes would rue the day when he said Irish farmers were £600 million worse off than in 1977-78.
Can anyone believe that we could have such a massive downturn in four years? Irish agriculture ran into severe problems and even four or five months ago it appeared to me there were many things we should have done but did not do. I do not know how this Government can promote schemes which will be of best help to farmers, we must wait to see, but if we are not more successful than the last Government many farmers will be in much worse trouble.
There is not any doubt that the biggest single problem in regard to farmers' incomes is inflation. I am not an expert on the factors that cause inflation, but when Fianna Fáil came into power in 1977 the inflation rate was 9 per cent or 10 per cent and everybody knows what it was when they left. We all admit inflation is too high now, but I believe that after the next couple of years the situation will have changed because of our efforts to counter inflation. I understand from the experts that by mid-1982 our policies will begin to show proof that we are in the process of getting a downturn in inflation.
There is not a single farmer, big or small, who does not understand the reason for the position he is in. At best he will get a 10 per cent or 14 per cent increase in the price of the commodities he will have to sell. The position is that farmers' input costs are soaring by up to 25 per cent and any business, whether here or in Europe, could not make a living in that situation. I should like to place on the record that this phenomenon did not start in the last four or five months. We have had it throughout the last three or four years and I sincerely hope, on behalf of the farmers I represent, that inflation will be controlled. I have the utmost confidence that the policies the Taoiseach will pursue, particularly in the next budget, will bring about a downturn in inflation. I would be prepared to say that if we do not get that downturn in the next 12 to 18 months, no matter what our negotiators do in Brussels we will not be able to get for farmers the price increases necessary to combat inflation.
Our negotiators in Europe have been doing a good job but they have been in unfair competition because most of the other EEC partners have an inflation rate far less than ours. The problem we have, and Deputy MacSharry had in his term, is that we have been among a group of other Ministers for Agriculture who are looking for price increases on different terms, and it will be difficult for any Irish Minister for Agriculture to get across to the EEC that Ireland is a special case. The Minister for Agriculture will be in Brussels trying to make that point clear in the next few months, telling them that Irish farmers are entitled to a different agreement from other countries.
Ninety-five per cent of Irish farmers voted for entry to the EEC for a number of specific reasons. All states who decided to join did so for different reasons. We voted to join because we believed we would be opening up a huge potential market for our agricultural produce. We believed we would be cutting off our connection with the cheap food policy of the British market, and that position is as true of today as then. That is why we should ensure that no matter which Minister is in Brussels he will stress the special reasons why we should be helped in a particular way. I have great confidence that when the Minister for Agriculture and the Minister of State negotiate on our behalf in the coming months they will get a worthwhile package. During the debate on the motion yesterday and on the Supplementary Estimate today there were comparisons about who did what——
Who did not get what?
Let us be fair. If farmers today are £600 million short on 1978 values, that did not happen in three or four months. If that decline continues we will be in serious trouble. The fact that 75,000 or 80,000 farmers are coming to this city tomorrow is a good thing. They will not pick out the Coalition Government for special attention. They will talk about what Fianna Fáil did not do when they had the chance to do it. They will say that whatever was done in the past was not successful and that, if the present arrangements are not right, their problems will be worse than ever before. The Government will do everything in their power to put farming incomes on the right course but I am not naive enough to believe that, if we are short of £600 million, it can be provided in the immediate future.
I am very pleased with a number of items in this Supplementary Estimate. The farm modernisation scheme is very important. It must not be allowed to grind to a halt. In the past number of years millions of pounds were pumped into it. It is a very important aspect of Irish agriculture. If it is slowed down, we will really have a problem. It is very important to ensure that farmers get their grants on time. Over the past couple of years there were occasions when it was particularly difficult for farmers to get a grant. I cannot be too sure of the exact time-lag. I sincerely hope that, when a job has been completed and approved by the development services and sent to the Department, the grant will be forthcoming in a month or six weeks.
If anything happens to the farm modernisation scheme it affects a great number of people. Many small builders are involved in farm buildings. Many agricultural contractors are involved in western drainage, and so on. I am absolutely delighted that the Minister has seen fit to provide the necessary money to enable that type of progress to continue.
During the good times, if they were good times, in 1977-78 I remember that the Government decided to put a levy of one kind or another on farmers. It was said that it was an expanding industry, an industry which would attract a good deal of money, and farmers would have surplus money. That is on the record of the House for anyone to see. We had disease levies, and 2 per cent levies, and other levies. Either the Government were as sure about the future as the farmers seemed to be at the time, or the Government believed that farmers could contribute, in the famous words, "their fair share of tax".
The strategy behind that would appear to have gone very sour. In 1977-78 there was a new awakening in Irish agriculture. It appeared to many people that then was the time to borrow at the then borrowing rates. In the fifties and sixties, farmers borrowed at a rate of 8 or 10 per cent and, by and large, there was no extraordinary increase in their interest rates. Things worked out differently in 1977-78. I have the height of respect for the type of farmer who decided to borrow money on the advice of his agricultural adviser and of the Government. Whoever were in Government at that time would have said that, from the point of view of extra production, that was the thing to do. Unfortunately, what happened is history.
I represent a west of Ireland constituency where the problems of over-borrowing might not be as great as they are in some of the better farming areas. I have come across a number of farmers who would be regarded in their areas as very good and careful farmers who work seven days a week. At the moment their wives and families are existing on almost nothing. Sometimes we can be regarded as showing the béal bocht when we talk about problems relating to farmers' incomes. Two or three years ago I pointed out in the Seanad that farmers had many problems, despite the fact that everybody thought they were on the gravy train. It is a pity people did not take notice of what many rural Deputies and Senators from all parties were saying at the time. At the time farmers were just getting a chance to increase production and thereby increase their incomes. Nobody foresaw that interest rates would go mad. That is exactly what happened.
I met a man the other day whose repayment on his borrowing in 1977 was just over £4,000. For one reason or another, a couple of months ago that bill was over £7,000. There is no way in which that man can repay his loan and provide a reasonable living for his wife and family. I am sure the Minister for Agriculture will do what is humanly possible to alleviate the problems of those people. I sincerely hope this tax-based lending plan will come into operation very quickly. My understanding is that it will mean that farmers in that category — and there should be about 6,000 to 10,000 of them — will get an interest rate of about 10 per cent or 11 per cent. I am not sure whether that will get them out of trouble, but it is much better than the 19 per cent or 20 per cent some of them have to pay.
I appreciate the tremendous efforts the Minister and the Ministers of State are putting into it. I hope no insurmountable barriers will be put in their way by anybody, including the banks, and that in the next week or two we will have a water-tight agreement which will be made known to every farmer who has a problem. There are tremendous mental strains on farming families at the moment. They want to know exactly where they stand. The 5 per cent EEC scheme and the 5 per cent national subsidy will be a great help, but for many people they are not enough. I hope the negotiations with the banks will be wound up very quickly and that the expected benefits will be forthcoming.
I do not know what the outcome will be but the banks have a very big responsibility in this matter. If the agricultural community are unable to repay agricultural loans, the banks have not been blameless in this regard. You could argue a farmer did not have to borrow but that would be naive and would show a lack of understanding as to why farmers borrowed to such an extent. It is in the interest of the banks to ensure that a beneficial rescue package is organised quickly because nobody wants to see farmers being sold out. Much of the frustration which has been gathering in agriculture over the last 12 months, and which will manifest itself on the streets of Dublin tomorrow, is because many people who were badly caught by borrowing firmly believed that the previous Government, this Government and the banks were not au fait with what was happening. An early announcement of what interest rates will be for hard pressed farmers would be very welcome.
It is important at this stage to inject and instil new confidence into the agricultural arena. We have been bedevilled over the years by the great cycle in agriculture. Every four, five or six years there is a slump in prices. It happened in 1974, last year and this year and, if one takes note of history, it will happen again. There are a number of items which I welcome and which will be implemented by the Government. I look forward to the announcement and the details of the £100 calf-heifer scheme. Because of our low agricultural output a problem has arisen. We must have more dairy cows, beef cows and sheep on our farms. This will prove to be a springboard for many farmers.
The recent announcement of the new loan, through the ACC, at 14 per cent will also have a great effect. Because of the buffeting Irish agriculture has received over the last couple of years, many people will be cynical about borrowing. We now come to the beginning of another farming year. I understand, from official figures, that there has been a decrease in the last year or two in the usage of artificial fertiliser. I do not have to go into details of how important it is that this decrease is arrested because it is from that that the entire production on farms springs. I hope that, in the next month or two, through the efforts of the Government, farmers will see that it is in their own interest that every effort is made to increase production in 1982. Every chance should be given, either through loans or subsidies, to our farmers to ensure that they use enough fertiliser. Coupled with the £100 calf-heifer scheme we should get a new breeding programme which, in turn, will spark off many more items which will be beneficial, not only to farmers but to business generally.
I was informed this morning that the number of cattle at our meat factories has decreased substantially in the last seven days. This will cause great problems for meat factory workers. Together with our attitude to the exportation of cattle it will mean that many people will face a worrying winter, especially workers in meat factories. If the cattle are not there they cannot be killed, so it is in everybody's interest to instil confidence in the farming community.
The national wage agreement, which was negotiated last year, caused our rate of inflation to rise. As the House is fully aware, present wage agreement talks have broken down. It is important for the farming community and everybody connected with it that there is a reasonable wage agreement negotiated within the terms of what the State can bear. If we are being paid for production which does not come up to par and price ourselves out of the market, that will cause problems. I appreciate that if inflation rises to 18 per cent or 20 per cent and there is a wage increase of 13 or 14 per cent, the workers will not be too happy. Unless we have a reasonable wage agreement which will take note of all the factors involved, we will find ourselves with many more problems at the end of the year. A wage agreement will have an important bearing on how well farmers get on in 1982.
Whether we have free collective or independent bargaining or a national wage agreement, I hope it will mean that our inflation rate will be held within reason. From all forecasts, it appears that 1982 might not be a bad year for the farmer who had not borrowed too much. If that turns out to be the case, all farmers should see that for every £100 they decide to spend on fertiliser and livestock in the spring of 1982, they are well compensated for their investment. From the point of view of agriculture, 1982 will be a big year. Many farmers may be wavering as to whether they will buy extra stock, grow extra crops or buy extra fertiliser. I believe there is room for optimism and that farmers have a new confidence.
I hope the Minister will be able to come back from the price fixing session in Europe with the exact package we want. I have asked the Minister to use his good offices to ensure that our farmers know early in 1982 exactly what they are getting. I look forward to a very serious round of negotiations in Brussels because on this occasion we have a very special case and I have no doubt that when the package is wrapped up a tremendous amount of confidence will be generated in the farmers and we will see a new level of production which will mean a great deal of prosperity for everybody, even people far removed from the land.
In this Supplementary Estimate we are providing more than £1½ million for the bovine tuberculosis eradication scheme. It is a sad reflection on everybody involved that we have not yet eradicated that disease. For some unknown reason during the last 12 months we have had wildcat outbreaks of tuberculosis in my county. This seems to have the veterinary people baffled. Should we make a co-ordinated effort with European countries which seem to have got rid of this disease? We seem to have made better progress in the eradication of brucellosis but we seem unable to stamp out bovine TB. It is bad enough that this disease is a great cost on the Exchequer and a black mark on our exports, but it is making poor men of many of our farmers. If we could pin-point the reasons for these outbreaks we could do something about stamping it out. It appears that everything we tried in the last 20 years has come to nought. The Minister should draw on all the expertise available not alone in this country but in Europe because if we have the same incidence of this disease in the coming years, not alone will it be costly for the taxpayers but it will put many farmers out of business.
It is important to point out that this affects not only the farmers whose herds have contacted this disease but every person in the country, and collectively we must accept responsibility. It has often been said that when a farmer's herd had this disease it was his hard luck, but that is not the case. This problem has far-reaching implications for everybody, whether living in the city, town or country. It also affects our exports and our balance of payments. We must all work to eradicate this disease. It is a team effort but there seems to be a breakdown somewhere in the team.
The millions of pounds we have spent on the eradication of bovine tuberculosis have been wasted. It is reasonable to assume that if we were to continue the same eradication policy it would not work because if it did not work during the last 20 years it is unlikely to work in the next 20 years. I am not an expert in this field but I know this is one of the big problems facing farmers. What makes the problem even greater is when a parish which is completely clear of tuberculosis discovers two years later that a herd has contacted this disease. It is very difficult to understand how that can happen and we must find the answer to this problem very quickly.
Farmers are as committed to farming now as they ever were. With the new incentives this Government have announced, or are about to announce, there will be a new awareness among the farming community. Within the next few weeks and months farmers will see there is a decent and honourable living to be made on the land and allied industries will benefit. We talk about 130,000 people unemployed, but if we get agricultural production on the right track there will be permanent jobs available for many more people. This means everybody will be doing well. There is no other industry that will repay money invested like farming.
I congratulate Deputy D'Arcy on his appointment as Minister of State and would like to remind him of a few remarks he made when he was Opposition spokesman for agriculture. During the last general election he made misleading promises. I would like to comment on a headline in last night's Evening Herald:“Bruton's £37 million aid to farmers.” That is the most misleading heading I have ever read. One would think the Minister for Finance was making £37 million available to farmers when this money is being provided as on-going expenditure in the Department. In this article the Minister for Finance said there were no free lunches for anyone — he was referring to the farming community. He said the real problem facing Irish farmers was inflation. He said that the Government were committed to doing everything possible to overcome this problem and help farmers develop. That is the most outrageous statement I have ever heard from a Minister for Finance who only a few short months ago introduced a damaging budget. We must face the fact that an increase of 5 per cent to 6 per cent in inflation is conservative.
I should now like to deal with promises made by the Minister of State, Deputy D'Arcy, in the course of an article in the Farmers Journal of 25 April 1981 under the heading “Curbing inflation will be Fine Gael's priority”. That is so far from the truth, bearing in mind what happened in the last six months, that it is unbelievable. It is important that I put the promises made by Deputy D'Arcy in the course of that article on the record so that people will be able to judge in the future whether they were implemented or not. He listed the following new State aids he would introduce for agriculture: an introduction of interest rate subsidies from the national Exchequer and the bailing out of farmers in financial difficulties, including the exemption from repayments for the first year of a three year recovery programme. The recovery programme now has been reduced to two years but there is not anything about no repayments in the first year. Deputy D'Arcy also promised the stabilisation of interest rates at 11 per cent. I hope we reach that day but Deputy D'Arcy did not explain how that would be done. He promised financial assistance to increase cow herd numbers, a programmed calf-to-the-beef plan, increased suckler cow grants by 30 per cent, a lamb subsidy, a follow-up programme for first time silage makers, huge investment from national funds to increase production standards, better breeding through AI supported from national funds and financial assistance for the sugar company. I wonder where Deputy Connaughton has gone. He is not around to hear that promise but the Minister of State, Deputy Nealon, should take note. Deputy D'Arcy also promised a more attractive farm retirement policy, to stop pressure on some farmers to sell off assets to make loan repayments and a price increase for liquid milk of at least 15 per cent on top of EEC price increases. In that event he was talking about a possible 30 per cent increase this year for our dairy farmers. Deputy D'Arcy also said he would place emphasis on the importance of growing sufficient acreage of cereals and vegetables so as to at least offset the increasing threat of imports, strict control of imports of cereals and vegetables, a central marketing authority to eliminate uncertainty of cereal prices and maintain our sugar beet industry.
I draw the Minister of State's attention to that last promise and ask him to bear in mind that his Government are proposing to close one beet factory. Deputy D'Arcy also proposed rigid enforcement of quality controls on vegetables, the introduction of a long-term leasing system and pointed out that the operation of any land policy using the PLV system was inequitable and unacceptable. I have asked some people to give me an estimate of the cost of those promises. They found it difficult to put a figure on them but it appears that it would cost at least £250 million over and above current Government expenditure on agriculture. I am pleased that Deputy D'Arcy has committed himself to that policy. In the Supplementary Estimate £3 million is set aside for the national interest subsidy scheme, £13.3 million for the farm modernisation scheme and £8 million for aids to farmers in less favoured areas. The figure for the farm modernisation scheme is misleading because it is an ongoing scheme. I do not know how long more it will be "ongoing", because a circular issued by the Department points to modifications introduced in the scheme for western development. I thought Deputy D'Arcy, who comes from a progressive county like Wexford, would be more concerned to try to ensure that farmers proceed with drainage and land reclamation. However, the level of grants for land improvement, farm buildings and fixed equipment has been reduced by 5 percentage points. In the case of land improvement in disadvantaged areas outside the western region the grants will be reduced from 70 per cent to 65 per cent. There will be a cost limit of £740 per hectare on all land improvement schemes and the maximum acreage that will be approved in any scheme will not exceed 40 hectares. I have made inquiries in Wexford about the average cost of such work and I have been informed that it would run in the region of £1,000 to £1,200 per hectare. It has been stated that the costings that are now referred to are 1978 costings, three years out of date.
Why did the Deputy not bring them up when he was in office?
The Minister of State has reduced them. There has been a reduction in the Estimate and rather than having it revised upwards it is being reduced. Not alone that but grants have also been reduced from 50 per cent to 45 per cent for land drainage all over the country. Deputy D'Arcy may not be aware of the number of people affected by this massive reduction. It will mean that farmers will be about £200 per acre out of pocket over and above the situation that existed when we were in power. Many areas will be affected by that change. The Department's circular also stated that grants for mobile equipment were being discontinued, grants under the group fodder scheme would be confined to basic silage making equipment and, under the western drainage development programme, the level of grants for buildings and fixed equipment were being reduced by 5 per cent. The circular stated that there would be no change in the cost or scheme size limit for land improvement that had already been communicated. Under the western drainage scheme the circular stated that the maximum figure had been fixed at £800 per hectare and the maximum size of the scheme that may be approved was 40 hectares. That means that anybody who has drained 100 acres since the farm modernisation scheme was introduced and wants to drain another acre is out. Deputy D'Arcy well knows that in the constituency——
I would remind the Deputy that he should address the Minister as Minister.
The Minister of State well knows that there are many areas in Wexford in need of reclamation. The area from which I come — the Macamore — was one in respect of which the present Minister of State made a commitment during the election campaign. According to him it was one of the first things to which he would attend, that it would be a matter of weeks only if they were returned to power before the Macamore area would be included in the disadvantaged areas scheme. Indeed there is another area of Wexford that might well be included in that scheme, the Rathangan area. We have been waiting five months already and yet nothing has been done in respect of either of those areas.
Reverting to the reduction in the grants under the farm modernisation scheme, the people who will be most affected are the drainage contractors who are already laying off employees. The same applies to farm buildings and contractors who heretofore built silage pits, slurry tanks and so on. I understand now that if a farmer builds a shed and wants to put down a cement yard the following year he will not even be eligible for a grant under the farm modernisation scheme. The suppliers of building materials, those who supplied ready-mix cement, and others will all be severely affected by this reduction in grants under the scheme; mind you, this from a party who said what they would do to restore the confidence of Irish farming. Yet there is this reduction right across the board in respect of all aid to farmers under the farm modernisation scheme.
The Minister of State should be well aware that in Wexford we have the highest percentage, per head of farm population, participating in the farm modernisation scheme, over 50 per cent of those farmers being categorised as development farmers. It is well known again that per head of farm population we have the highest borrowings in the country, forming 10 per cent of total borrowings in Irish agriculture and, on the other side, we constitute 10 per cent of total agricultural production. Yet this is what is meted out to them by the present Government.
I would remind the Minister of State also of his commitment given in the Irish Farmers Journal of 25 April, 1981 —“Curbing inflation will be Fine Gael's priority”. Yet we discover that within a month of assuming office inflation had risen by a massive 6 per cent; it is at least of that order.
I want to ask the Minister of State about one of his commitments and perhaps he would reply later — he was not present when I was speaking earlier — that is, in regard to the baling out of farmers, including an exemption from repayments for the first two years of a three-year recovery programme. What will happen the remaining year? There has been nothing included in this respect in the announcement this week. If I am not mistaken I remember the Minister of State talking about the proposals of the former Minister at that time in so far as his 5 per cent interest subsidy was concerned. The present Minister of State said it was too restrictive. Am I to believe that there is to be no change in regard to eligibility? In fact the 5 per cent subsidy has been eroded since the present Government assumed office. Then there was the present Minister of State's recommendation regarding the stabilisation of interest rates at 11 per cent, another commitment made. Perhaps the Minister of State would answer that one as well.
The Minister in the course of his remarks said:
The Supplementary Estimate includes a provision of £3 million under Subhead F.3 for this scheme. In addition, discussions are in progress with the lending institutions with a view to introducing a special measure to help the hard core of farmers with very serious repayment problems. These discussions are well advanced but the working out of a detailed scheme is a rather complex matter.
During the week I came across the magazine Business and Finance of 19 November 1981 in which there appeared an article entitled “Allied Irish Banks—the farmers' apologist” written by Frank Fitzgibbon — he was quoting the chairman of AIB, Paddy O'Keeffe — part of which read:
The present protest by the farmers, which is being taken as arrogance by much of the population, is in fact a deliberate move by that hard-pressed sector to highlight the seriousness of its predicament. While the AIB recognises this plight, it does not plan to do anything to alleviate the situation.
In the final paragraph of this article it is said:
Ireland, though, is still unique in having an interest rate that is lower than inflation. It looks as if things could get worse. O'Keeffe puts it simply: "I don't see the recession ending."
That speaks for itself. At this stage the Minister of State must have something to say concerning the scheme he is negotiating with the banks. He has been working on it now for five months. Granted the spade work had been done by my colleague, Deputy Michael Smith, when he was in the Department. It is true that money is being made available under subheads B.1, B.3 and B.15, amounting to almost £2.5 million for pay increases to agricultural colleges, An Foras Talúntais and Comhairle Oiliúna Talmhaíochta. The largest item amounts to almost £2 million for technicians of An Foras Talúntais, something which is welcomed. It represents a wage increase granted and the question remained merely of finding the necessary finance.
Concerning the bovine TB eradication scheme I should like to ask the Minister of State when he proposes to implement the commitment he gave also during the general election campaign in regard to the introducing of a 60-day test. We heard a lot about this during the election campaign. Five months have passed and nothing has yet been done concerning this 60-day test. Perhaps the Minister could do something about that.
The hardship fund will be around the same level this year. A number of people I know have been badly hit because of the way it is implemented. Certain recommendations were made by the Animal Health Committee which the Department were looking at when I was there. I would like to know when they will be implemented. There are many anomalies in it and it is time some progress was made.
The plight of farmers at the moment is very bad. The present Taoiseach said at a Macra na Feirme rally in Wexford last Sunday that he welcomed the farmers' march to Dublin. It is a terrible reflection on him that he welcomes this march. The farmers would be better employed working on their farms rather than wasting time marching to Dublin. The present Government have done nothing to alleviate the hardship of the farmers who now find that they have to march to Dublin to draw attention to their plight.
The former Minister, Deputy MacSharry, negotiated a price package last year. This speaks for itself. The price increases granted to them are as follows: milk, 13.3 per cent; beef, 14.3 per cent; cereals, 10.2 per cent; sugar beet, 12.7 per cent; pigs, 15.4 per cent; sheep, 14.8 per cent. I hope the present Minister can achieve price increases such as these. If he does he will be going some way to alleviating the hardship farmers have to face at the moment.
I do not propose to delay the House any longer. Once again I want to remind Deputy D'Arcy of his promises during the election and to condemn the out-of-hand reductions made by the present Government in the farm modernisation scheme. It is a disgrace. It is a step in the wrong direction if we are trying to restore confidence in agriculture.
I am pleased to be speaking on the Suplementary Estimate for agriculture on my first opportunity of speaking in the House. I listened with great care to what has been said. I wondered if I was hearing right as I listened to the speakers on the opposite benches talking about what they had done for agriculture in the last three or four years. When they got in with their 20 seat majority in 1977 inflation was at about 9 per cent. When they left office it was at 18 per cent. In that time their contribution to agriculture was the introduction of a 2 per cent levy on all goods sold off farms. They took millions of pounds out of agriculture and out of the pockets of the farmers. They also introduced a resource tax. We heard a lot of talk this morning about the farmers in the west. But the farmers in the midlands and in Wexford and Meath are in deep trouble because of measures such as these. The farmers who, with their families, worked on their farms were not allowed to keep in their pockets the money that they earned by the sweat of their brow. Deputy MacSharry told me this morning that I was not in this House to hear what was going on over those four years. But I knew what was going on because I was on one of those farms; I am one of those farmers that Deputy MacSharry was supposed to be representing. He may be the white-haired boy of the farmers in the west, but the farmers that I represent were delighted to read in the papers that there was an open door to the Minister for Agriculture and disappointed that nothing came out of the talks that took place.
Deputy Allen said that the march of the farmers to Dublin was welcome.
The Taoiseach, Deputy Garret FitzGerald, said it.
We do not like to see anyone having to march to get their rights. They marched last year, and I marched with them myself to try to improve my income. I am sure that any of the Deputies opposite, seeing their farm income dwindling over the last three years, would march — and who could blame them? Deputy Ellis referred, this morning, to 1974. That was a bad year. Mark Clinton might not have produced all the goods at once when the problems hit the small farmers, but he certainly left the foundation in 1977 on which we reaped the reward in 1978, when farm incomes were at their highest level. The people of the Leinster constituency thanked him by giving him 80,000 votes in the European elections. Nobody can complain about the way in which he held that office. It will not be long before the farmers' representatives will be thanking the present Minister for the work that he and his Minister of State are doing for agriculture. They realise just as we as Members of this House do, that farmers' incomes have dropped in three consecutive years by a total of 60 per cent and the Opposition Party were in Government for two years and seven months of that time. Let us be honest with ourselves and with the community. A second Supplementary Estimate had to be brought in because the former Government did not provide enough money in the budget of last January for this year's requirements of the Department of Agriculture.
I welcome the Supplementary Estimate. We all know that it is not enough, the reason being that every Department have had to bring in a Supplementary Estimate for even larger amounts of money which had not been provided for last January. Who is to blame for that? The former Ministers for Agriculture and for Finance may shrug that off. A lot of people are still wondering who was the Minister for Finance. One man was trying to fill all the posts and was not so successful, as the electorate pointed out in June.
The interest subsidy which has been announced and what has to come will benefit the 70,000 farmers who are in financial difficulties and other farmers who have problems with their income. No member of any section of the community should have to live on £50 or £60 a week in this year of 1981.
It was mentioned that the Coalition Government contributed five or six per cent to inflation by the July budget. To be fair, three per cent would be about the answer. If the January budget had been as it should have been, a July budget would not have been necessary. It is not our fault that there are crises and a decline. In the five months in which we have been working at the problems facing agriculture, we have reached a situation where, in another five months, all our policies will be, more or less, implemented, which will be of worthwhile benefit to all our farmers. It will put them on the same footing as in 1976, 1977 and 1978.
Our inflation rate must be controlled, and we all know that it must get worse before it gets better. A farmer in my part of the country, when asked why he did not develop his farm, said: "When I would have all that done, on the day when there would be no money I could not eat this concrete." He was fairly right in making that point then. Our Ministers have been restoring confidence over the last number of months. What is being done today should have been done last January, not now, in November of the third year of the decline in farmers' income.
Deputy Ellis said that it was the twenty-odd schemes implemented by the previous Government which helped agriculture. He used the word "odd", and odd those schemes were. Not many in the middle seventies were helped by those odd schemes. Certainly, they did nothing for me. The schemes which are now being negotiated and announced, and will be over the next couple of months, will counteract the decline in agricultural incomes.
It is most important that we all realise, as the previous Government did not, that if agriculture was not restored to the level of 1977 and 1978 we would all feel the pinch. We are now feeling the pinch because of a decline in agriculture. Instead of spending £10 million or £15 million on an airport at Knock, the £10 million or £12 million reduction in the farm development services would have been a lot better spent on the farmers in the west of Ireland. Many farmers in the west would have preferred the money to help them develop their holdings and improve their lands to a white elephant of an airport.
It should be taken into consideration in future by all public representatives that scandals such as that should not be allowed to take place and that money should be provided for worthwhile exercises such as the farming community have been looking for in the last three years. It was a pity that Deputy MacSharry was not aware of the problems. However, he was only a year and half in the job. His predecessor was not aware of the problem or could not see the problem that was coming or the measures that could then be taken.
I would like to compliment the Minister on the introduction of this Supplementary Estimate. I hope that for the community that it is for, it is only the beginning of what should have been given to farmers, not today, not six months ago, but 18 months and two years ago.
Am I going to be allowed ten minutes to conclude the debate?
Will the Minister be allowed ten minutes to conclude?
We are under tremendous pressure from Deputies who wish to come in on this important debate. I do not want to be responsible for limiting the Minister in his reply because obviously he has a number of points to make. I would ask if it would be possible to extend the debate to some extent into the afternoon. We had the situation last week when Deputies were not able to get in to speak on the debate on Lands. We are now going to be placed in the same position, that many of our Members will not be able to contribute. I do appreciate the Minister's position also.
I appreciate the Deputy's concern but according to the order made this morning the debate must conclude at 2.30 p.m. this afternoon.
If there were agreement between the Whips during Question Time on the matter, could there be an arrangement as suggested by Deputy Smith?
I find myself in a difficult position. Deputy Wilson wants to make a contribution. There are ten minutes left if we have to give the Minister ten minutes to reply to the debate. I was going to ask a very peculiar question. Could I divide the ten minutes between myself and Deputy Wilson?
If the Minister would agree.
I do not think I have the authority to agree.
Would you allow the matter to be discussed by the Whips?
We are wasting time. If the debate must conclude at 2.30, time is precious. I will allow Deputy Killilea five minutes and Deputy Wilson five minutes and I will then ask the Minister to come in for the final ten minutes.
Is there no possibility that you can do what Deputy Smith asks? I have been here this morning. I could not get in on Private Members' Time. I think I know as much about agriculture as many speakers here today.
It is a pity that those difficulties were not discussed by the Whips involved. The decision this morning was that the debate is to conclude at 2.30 and it will conclude at 2.30.
Could I suggest that, while the debate may conclude today at 2.30 and the Supplementary Estimate be passed, the Government side might agree to introduce a token estimate of £10 and allow the debate to continue at some other time.
Perhaps that point could be discussed among the Whips and if they arrive at some agreement, yes.
May I put it on the record of the House that if that should be the case, in view of the fact that I am dividing the ten minutes allowed to me, I would have the right to speak in the debate on that token estimate?
I cannot give the Deputy any guarantee as to his future right to speak. That will be decided by the Whips.
My time is so short that it is practically impossible to make the points I want to make. I want to refer to one specific matter because cunningly and quietly Deputy Paul Connaughton slipped away from it, that is, concerning the proposals that should now be forthcoming from the Department of Agriculture concerning aid towards the growing of sugar beet in the west of Ireland, taking due account of the situation in which the Tuam factory finds itself at this time. I could elaborate on this matter but have to curtail my remarks. I want the Minister of State, Deputy D'Arcy, to remember this: last year through negotiation with the Department of Agriculture and the then Minister, Deputy Ray MacSharry, there was an allocation to encourage beet growing. The Tuam factory area in particular had tremendous problems because of the return per acre from sugar beet. There was an indirect subsidy through the Sugar Company of approximate £35 or £36 per acre. I would ask the Minister if he would review that this year, having regard to increased costs, to a figure of approximately £100 per acre. I am not saying that that is the true figure because the appropriate figure would be a matter for the Beet and Vegetable Growers Association in association with the Sugar Company. The Tuam sugar factory has become such a hot political question that the matter cannot be avoided simply by saying that that is outside the terms of reference of the Government. I would appeal to the Minister, Deputy D'Arcy, at this time.
In regard to what Deputy Farrell said, it is amazing that we have a Minister and two Ministers of State for Agriculture and yet a Deputy on the Government side only acknowledges that we have a Minister and one Minister of State. I do not know where the second Minister of State has vanished to. It is alleged that he was responsible for the £300 million package negotiated for the west of Ireland by the former Minister, Deputy MacSharry. His name is Deputy Nealon. I have not seen him or heard him make one contribution in this House as to his proposals to help such industries as the sugar industry in Tuam, the Halal factory in Ballyhaunis, the airport in Mayo and the new problems that have come to light concerning the disbandment of the briquette factory by Bord no Móna at Ballyforan and a whole range of others I shall not go into. The £300 million was laughed at when we negotiated it. Yet, this Government saw fit to appoint a Minister to administer it. Where on earth is that £300 million going? Is there any hope of the Minister coming to the rescue of, in particular, the Tuam sugar factory? Or would the Minister of State take himself from wherever he is and come in with some positive proposals to help the people in the west for whom he is allegedly responsible? I am sorry I cannot continue but I did promise Deputy Wilson a few moments. I reserve the right to speak again, should the Whips agree to the introduction of a token estimate for £10.
I will confine my remarks to a very specific area and to a very specific request. I have had over the recent past lengthy consultation and arguments with farmers both in their private capacities and in their representative capacities in the Irish Farmers' Association and the Irish Creamery Milk Suppliers' Association in my own area and I want to address myself in particular to what I regard as a very serious injustice that was done to the Cavan-Monaghan area in deciding on the severely handicapped areas within the disadvantaged areas. I think the mistake was made during the time that the previous Coalition Government were in office when large areas of the two counties of Cavan-Monaghan were excluded from the severely disadvantaged areas scheme. I know that other counties were included and I do not want to say that they should not have been. I want to approach it positively and to say that the Cavan-Monaghan areas in toto should have been included in the severely handicapped area. By any of the criteria laid down by the European Economic Community these two areas should have been included. This House knows and, in particular, the agricultural scientists know that the soil in that area is a cold soil, it is a difficult soil, it is a soil that requires warming with lime and stimulation from fertiliser to an extent which is not true of other areas. While we have made a reasonably good job of the very poor material there is no reason why we should be punished for having done so. The grass-growing season in the area is very short and if cows are left out in the late autumn the grass is trampled and killed and the spring revival is very tardy, if it is possible at all.
There are rumours of trouble in agriindustry in that area and if these rumours are true then we are in a very serious plight due to this exclusion. Scientists have indicated that the Cavan and Monaghan areas have been very high on the production list, although I presume that this productivity does not take into account the very expensive inputs. It is a tribute to people who work on such poor material that they are so high in the productivity stakes and it is wrong that they should be mulcted because of that. We know that officials, either here or in Brussels, are responsible but this injustice is no longer tolerable.
ACOT replacements are very slow and in an area which needs such care there is no excuse for a long delay. Farmers there feel that the 12 western counties should be excluded altogether from the milk levy because of their problems. Deputy Killilea mentioned the £300 million western scheme but the farmers I represent are puzzled as to what has happened to it and it is time the Minister got the scheme going so that the effects may be seen. For various reasons there are also delays in the western drainage scheme and these should be attended to.
There has been reference to updating the cost of the farm modernisation scheme. Deputy Farrelly spoke about inflation, but if this scheme does not take account of inflation its whole purpose is frustrated.
Time is not available for me to speak at length about the failure of the TB eradication scheme, but it is true that TB has again become a serious problem in my constituency. Wherever the blame lies no attempt should be made to exculpate those responsible, whether they be veterinary surgeons, officials of the Department or farmers themselves. It is criminal and unpatriotic not to push ahead with the total elimination of TB. Farmers are not satisfied that the compensation payable for reactors is a proper incentive for the bringing of this scheme to a fruitful conclusion.
It is very unsatisfactory to be asked to reply to a debate of this nature in only five minutes.
On a point of order, the debate was to conclude at 2.30 p.m. and there was absolutely no agreement in relation to time for final speakers. Were it not for the agreement of this side the Minister would not get the opportunity to speak at all.
It is easy to answer Deputy Wilson's point concerning a review of disadvantaged areas. The last review was carried out in 1979 and most of the extensions were towards Tipperary. He had an opportunity at that time in relation to extensions in his own county.
I was not being contentious, but the Minister is being contentious. The Coalition Government were in office when those areas were first defined.
Deputy Wilson knows the truth of the matter.
I wish to thank Deputies on both sides for the good wishes extended to me and I will do my best in this Department. It is impossible for me to answer all the points raised but I hope to deal with the more important points. Deputy MacSharry referred to the revised Estimate and tried to maintain that we are not providing as much as the £72 million mentioned earlier by me. He referred to reductions in the appropriations-in-aid but did not point out that £8 million of that reduction represents the removal of the disease levy which was imposed by Fianna Fáil.
And taken off by us.
He purposely avoided mentioning that. On the subject of intervention, he did not mention that £6 million of the £8 million will be recoupment. The figure of £72 million is accurate but he tried to dissect it to suit himself. The Opposition also seek to misrepresent what we have done in regard to headage payments. Sixteen thousand sheep farmers will get substantially higher payments this year and the total number affected by any reduction in sheep headage is 2,500. These are not only in the 12 western counties but also in Wicklow, portions of Wexford and Tipperary. Only 2,500 of 95,000 will be affected. A farmer with 100 ewes and 15 adult cattle will receive £1,402 as compared with £952 under the previous Government. Deputy MacSharry avoided mentioning this. We took into consideration the smaller farmers and this is the proper approach.
Why were all the temporary agricultural officers sacked?
I believe that the big farmer with over 200 sheep should not be subsidised.
Will these people be reemployed?
The Minister to continue without interruption.
It was rather interesting to listen to Deputy MacSharry talk about the Estimates. In January last when Minister for Agriculture he took £21 million out of the Agriculture Estimate. This was reported in The Irish Times on 21 January.
On the contrary.
The same newspaper report stated that the then Minister for Education, Deputy Wilson, increased the Education Estimate by 25 per cent, while there was a 14 per cent reduction in the Agriculture Estimate. The then Taoiseach told them that the money would have to be taken out to make the budget look good, but Deputy Wilson refused. I had great respect for him as Minister for Education.
Several Deputies mentioned the payment of grants and I assure them that when this Estimate is passed the grants will be paid immediately. It is hoped that at least 75 per cent of the grants owed, amounting to about £9 million, will be paid before Christmas. The truth is that there has been no money to pay those grants, but that is not our fault.
The Minister for Agriculture and I fully appreciate the problems facing the agricultural community, but these problems have not arisen within the past five months. They have been growing during the past three years. Farming incomes have reduced by 50 per cent over that period and action is required on several fronts.
As far as the Government are concerned the most disturbing feature of the entire problem is that during 1981 agricultural production dropped by 2 per cent and incomes by between 15 per cent and 20 per cent. Another disturbing feature is that borrowing increased from £250 million to £1,200 million. There is a difficult problem but the Government's policies will be followed through.
Reduce inflation.
We will agree to the Supplementary Estimate but I should like to make a suggestion because of the number of Deputies who wanted to participate but could not. I suggest that the Whips get together to agree that a token Estimate for £10 be introduced so that we can resume the debate.
