: I had just begun to speak on this Land Bond Bill on 2 March 1983 when the debate was moved for adjournment. To recap briefly, I said that what was introduced as a land bond enabling Bill came to be discussed very widely as dealing with all aspects of land redistribution, making land available and so on. The whole area of land use was discussed. In many of our built-up areas some of our best land is being used for building purposes and also being exploited by the various interests associated therewith.
The value of land as a natural resource can never be over-estimated either here or elsewhere. In our country we recognise that agriculture is of fundamental importance to the economy, a fact readily recognised and accepted by all shades of opinion, rural or urban. The Bill we are now discussing requests this House to make available a major increase in money for the purchase and redistribution of land. In other words we are asking that the existing amount of £105 million be increased to £130 million.
The Land Commission have been much criticised not only in this House in the course of the debate so far but equally criticised and maligned by many people who have at times attempted to get land. Nonetheless, one must say in favour of the Land Commission that they have been highly successful in abolishing the historical form of landlordism and in attempting to vest the land so acquired in many tenants who have very usefully exploited and worked it to date in the interests of the economy at large. That is borne out very much by the fact that there has been no serious agrarian disturbance in this country, a testimony to the achievement of the Land Commission in this respect in meeting the aspirations of many smallholders to acquire additional land.
Much has been said about making more land available and finding ways of regulating the marketing of land in order to improve the competitiveness of the smallholder and at the same time ensuring that those who acquire the land will use it effectively in the interests of the economy. I am anxious to support this Bill because that is the reason for making this money available. On the surface, £25 million would appear to be a significant amount but one must take into account the competitive nature of land deals and the number who subscribe to attaining further land even though it is claimed that there is not the level of profit that one would wish for. When one farmer tries to compete against another, the price of land is driven almost sky high.
The Land Commission, in existence now for over 100 years, continue to operate within a legal and procedural framework essentially designed to safeguard the rights of individual landowners. A land policy seeking to achieve the highest possible level of productivity and more efficient use of our important natural resource has been the subject of debate for many years. A land policy interim report was introduced in this House in 1977, a final report was brought forward in 1978 and a land policy report was presented to both Houses of the Oireachtas in December 1980. That is evidence of the great level of concern shared by everybody with regard to the existing land structures and ways in which they might be improved. In spite of all the worthwhile effort and time devoted to land policy, very little has been done. Successive Governments have failed totally in this regard.
The Land Commission have achieved much and I would be the last person to deny this, although I have certain criticisms of the commission. They deserve a certain measure of commendation for the manner in which they have operated within the legal constraints over the years. The Minister of State, Deputy Connaughton, has aired his views on land structure and what he would like to see happening. The belief that there is a need for restructuring is shared by all farming organisations, and not only those but people outside farming as well. They recognise the importance of land and its full use in our economy. At no time in our history has that been more evident than at present.
Any land reform policy must take account of the existing owner-occupant system of land tenure, which is an historical legacy of the land struggle dating back almost to Famine times. The difficulties over land need not be further exemplified here but, due to the constitutional protection afforded to all property owners, it will be extremely difficult to formulate an acceptable and workable policy on land no matter how desirable that is. The rigid attitudes which attach unwarranted status to land ownership are deep-rooted and ingrained into our minds. There is obvious justification for this, when one examines the long and more often than not bitter struggle in the history of the land, going back to the times of Parnell and of Michael Davitt. Michael Davitt was a great protagonist of land ownership, not for the landless but for those who already had land, by trying to ensure a greater degree of fixity of tenure. The Land Acts of the 1870s, which is not today or yesterday, came in under a different administration, but, nonetheless, some of them achieved a worthwhile purpose. The 1881 Act, which gave rise to the "Three Fs", embodies the first consolidation of land ownership in the minds of the Irish tenant farmers. Parnell fought for that and it was the most significant among his many public achievements in his fight for a measure of freedom in this State. By the time of the 1923 Land Act, 300,000 tenants had been assisted in obtaining land, a significant achievement for which the Land Commission may take credit.
In giving support to this Bill, one must examine the various developments of the Land Acts and the subsequent power assigned to the Land Commission. The Congested Districts Board, which is still in existence, came into being under the Land Act of 1881. This board was merged with the Land Commission in 1923. More or less the same land structure has existed over the last 400 years. A previous speaker pointed out that land bonds were a dirty word in land dealings in rural Ireland. The land bond system was established in 1923, was amended at various stages and in the more recent Act of 1965 assumed its present form.
Land bonds are the most important element in today's debate. In this Bill we are making more money available to the Land Commission to purchase land through the land bond system. The use of land bonds enables the State to finance the land resettlement programme without recourse to public borrowing. That may or may not be an advantage to the State but it has been of no considerable advantage to the landowners who are trying to get rid of land. Today it may not be of great value to the land owners who are trying to acquire land. There is no fixed redemption rate and by far the most hostile aspect of bonds is that they are a form of loan with no guaranteed repayment date. Therein lies the really degrading aspect of land bonds. One can never cash them in at the price one should get for them. They have at times sold at as low as half their market value. The interest rate may have remained reasonably static — 16½ per cent is a reasonable interest rate — and because of that the amount of income derived from land bonds is reasonable. However, people do not want land bonds, they want cash in their hands and that is what I would like to see happening. It may cost the State more money but it would be a worthwhile investment. It is only part of an overall land structuring policy, giving strength and licence to the operating authorities to do the job well.
The amount of land required to fund the existing resettlement programme would be a small percentage of the public capital budget for the current year. Any future land policy, if it is to be at all successful, must take account of buying land for cash. Every Deputy on the far side of the House would agree with that.
It might be unwise to find too much fault with the Land Commission as they have had considerable achievements in land redistribution, in spite of many difficulties. Well over one million hectares of land have been held by the Land Commission at different stages and redistributed by them. The aim in redistributing land should not be economic only. It may have been the case over the years that we looked too much at the economics of land holdings and set our limits at a certain figure. That may bring serious social unrest to the minds of landowners. For that reason many farmers will not offer land to the Land Commission. The family farm is still the basic unit of land use in Ireland and any policy which does not recognise that will be a failure from the word go.
State expenditure on agriculture is a very constructive investment provided it ensures the greatest use of that resource. The Land Commission are not faultless in this respect because often the most deserving applicants — sometimes landless farmers who have worked all their lives on the land and know no other way of life — have been deprived through the framework of the Land Commission from benefiting under land division. I know from experience that land has been taken from under the noses of good farmers, people who have rented land under the conacre system. If they want to bid for a farm they are not allowed to do so because the Land Commission may have given it to people who are not entitled to it because their productivity from the land they already have has not been what it should. Over the years we have seen political and even outside influence being brought to bear when small farms were being divided so that certain people who are not entitled to the land would get it. Whether the land is taken over by the Land Commission or the land agency, the stigma is the same.
The Government have a serious obligation to ensure that any farmer who benefits under the Land Commission's redistribution programme must use the land effectively and to the best advantage. If this does not happen the Land Commission are not doing the job for which they were originally set up.
Another problem with the Land Commission is the length of time they keep the land, sometimes six or ten years. Many people who wish to acquire this land are amazed at these delays but nobody seems to pay too much attention to this situation. To keep land for pasture over a ten year period is not a productive use of the resource, irrespective of the difficulties that might exist — dividing it, registration and so on. It has been said that land is held by the Land Commission until a certain party are in office and the land can be divided among their friends.
Let us take as an example a 100 acre farm at £2,500 per acre, and paid for by 16½ per cent land bonds. The amount required to service that annually would be £41,250. The farmer gets his 16½ per cent land bonds and the Land Commission pick up the tab. The commission persist in parcelling out that land on a yearly basis to the detriment of the economy and to the coffers of the Land Commission. The most they will get for that 100 acres would be £100 an acre — and very few farmers will pay more than that because if they did they would not make a profit. That means the commission take in £10,000, losing £31,250 on the operation. If that land is sold it will cost the farmers between £350 and £400 an acre. That is not a viable operation. I suggest that the Minister make money available to the Land Commission to eliminate that type of wasteful land use and give the land at a greatly reduced annuity to farmers who will make effective use of it or allow them the opportunity to buy it.
The Minister's views on this subject are laudable, but how effective he will be remains to be seen. If the commission wish to divide a farm they might help the farmers. If a 100 acre farm came on the market it could cost £2,000 or £1,500 an acre. If the price is higher the farmers could find themselves in difficulties, as happened in the seventies. In many cases those farmers are now unable to meet their interest repayments. Perhaps the commission might make land available at a fixed rate so that the farmer would know exactly how much interest he would have to pay each year. I am sure there is an EEC scheme which could help in this area.
Mention has been made of the farm retirement scheme which has been disastrous so far as making land available for redistribution is concerned. At various times I have attempted to explain the value of this scheme to individual farmers, but to no avail. Those who opted for the scheme are now very annoyed. Eighty per cent of all land ownership transfers occur through inheritance or succession. First we had estate duties. Where a succession took place and the transfer was dealt with a number of years before the death of the property holder, there was no duty; but that changed under the Coalition programme in the middle seventies. The taxation to be paid now in such cases is more severe. That situation should be looked at very critically to ensure that there will be a greater flow of land and that farmers will not be prevented from passing land to their sons, nephews or nieces. I know nephews and nieces who lived with their uncles for 20 or 30 years, with no fixity of tenure, but because of their interest and commitment to the land, they stayed on, only to find that when the eventual transfer was put through they would have been better off if they did not get the land. This puts a millstone around their necks while at the same time the Revenue Commissioners are prosecuting them for estate duty. This is an area that must be looked at seriously. We must make the distinction between the man who is committed to the land, who knows no other way of life, and the person who is left a legacy of land. We must make use of the legislation to protect, assist and help in every way possible the person who is using the land to the benefit of the economy.
The farm retirement scheme came into being under the terms of a 1974 EEC Directive but since then fewer than 600 farmers have availed of the scheme and the amount of land released in this way has been only of the order of about 22,000 acres. It is possible that even without the retirement scheme that quantity of land would have been released anyway. We must make it easier for farmers who have toiled all their lives to transfer land that will be put to better use. Too much of our land is under-utilised. After all the years that these people put into farming the least we might do is give them the non-contributory old age pension. Some of these people would have lived on a mere pittance although making a major contribution to the economy. They would not have drawn any social welfare or received handouts of any kind during their farming years. In some cases there are difficulties about ownership and so on but we must strive to eliminate whatever anomalies exist in this area so as to facilitate the transfer of land and in that way improve considerably land mobility.
A great number of Irish farmers are more than 65 years old. That is a situation that we must do everything possible to change. Farmers regard land ownership as bestowing a significant status. They do not wish to pass on land to sons, daughters, nieces or nephews for fear of losing that status. One can hardly blame them for this after they have spent all their lives on the land. We must not turn them out as paupers or put them on the unemployment heap after they have contributed so much to our economy.
The voluntary retirement scheme, too, has been unsuccessful. Indeed, one might regard it as a total failure. Of the 37 who opted for this scheme in 1980, 30 sold their farms while seven opted for the 12-year leasing scheme.
In a statement to the Farmers Journal of 26 February last, the Minister expressed concern about the low rate of land mobility. Open market transfers account for as little as 15 per cent in this regard and associated with that, though perhaps more important, is the fact that 57 per cent of those buying land on the open market are not full-time farmers. I have no objection to non-farmers buying land. We must not be too restrictive in this matter because there may be people who have tried other ways of life, who may be once or twice removed from the land, and who now wish to take up farming. It is likely that to prevent them from buying land would be unconstitutional. Therefore, that is a matter that must be taken into account in the formation of any land policy. There is nothing wrong with the property market when it is open and free. The way to make progress in this regard is to allow the Land Commission to buy land for cash and then to distribute it to people who are prepared to use it effectively and to the overall benefit of the economy. We all know that a greater level of productivity is necessary even from the land.
I agree with many aspects of the Minister of State's proposals. he tells us that the purpose of the land agency is to promote the more effective use of land. Whether we have a land agency or a Land Commission there will not be any great difference. I would be concerned that people wishing to sell their property would have to make overtures initially to the land agency. This would seem to me to be an infringement on a person's right within the terms of the Constitution. A farmer wishing to sell land should be allowed to put his property on the open market. We should not be afraid of allowing that to happen. I am confident that the policy that the Minister has outlined will be successful but we must be prepared to pay for the land. The same is true of any market. If people have something to sell they are entitled to a reward for it. The same goes for the urban Land Bill. Both pieces of legislation are equally contentious. What is so different between urban land, whether for use in the industrial or the housing scene, and land that becomes available for use in the agricultural sense?
For a number of reasons, the long-term leasing scheme deserves consideration. I would not wish to think that we were returning to the days of the landlord when people with money could acquire large amounts of land and let it out. However, the land agency will have a significant role to play in the acquisition of land and in its distribution to young farmers who are better educated, better trained and who have a much deeper interest in learning the skills of farming than the older type of farmer had but these young people are not in a position to pay £1,500 or £2,000 per acre even in the event of land being available freely. The interest rates would prohibit them from getting a worthwhile return for their investment and their effort. Therefore, there is an obligation on the State to acquire the land in the first instance and the State must also make sufficiently attractive and worth while the farm retirement scheme. The land agency must do whatever ground work is necessary in order to ensure that land falls into the hands of the right people.
For a number of years past I have been concerned with the question of the taxation of profits on farming. To some extent the PAYE sector are guaranteed an income. The same can be said for business people but the position is different for many farmers. None of us is too concerned about the farmer who is doing well and who is able to pay his taxes but over-taxation would lead only to a disincentive situation. That fear is being expressed already. We may have got over the initial problems of farm taxation but in this respect we must take into account a number of factors, apart from the vagaries attached to the growing of a crop from one year to another. A crop may not be successful and there is an element of risk attached to investment in farming. In fact, that risk is greater in farming than in industry although industrialists may disagree with that notion.
