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Dáil Éireann debate -
Thursday, 23 Jun 1983

Vol. 344 No. 1

Estimates, 1983. - Vote 37: Agriculture.

I move:

That a sum not exceeding £245,764,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1983, 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 formal motion for the Estimate for Lands will be put at the end of the debate but the debate itself will cover both Estimates.

Notes on the main activities of my Department, including the Land Commission, have already been circulated and will, I trust, be of assistance to Deputies.

Before dealing with the detailed aspects of the Agriculture Estimate I would like to make some general observations on the current situation in agriculture.

In 1982 gross agricultural output was worth some £2,155 million, an increase of about 13 per cent in value terms on 1981 levels. The volume of output sold off farms increased by some 3 per cent, indicating a significant reversal of trends in recent years. This favourable outcome occurred largely as a result of an 8 to 9 per cent increase in the volume of milk output and a 5 per cent increase in the crops sector. As a result of reduced use of farm inputs coupled with a continued favourable relationship between output prices and input costs, family farm incomes increased by 20 per cent in nominal terms. When account is taken of the increase in the consumer price index, farm incomes showed a small increase in real terms for the first time since 1978. A return to rising output and incomes in the farming sector is a most welcome development, and one which will be built upon and encouraged to continue. An expanding farming sector brings significant benefits to the rest of the economy in terms of employment, incomes and foreign exchange earnings. Conversely, failure to realise the potential of agriculture will adversely affect the development of the economy and make the task of steering the country towards recovery a more difficult one.

Turning to the present year, the indications are that given normal weather conditions, the recovery in output and incomes in farming would have been maintained. Because of the poor weather this year the magnitude of the growth in output and income that was achieved in 1982 may not be equalled this year, but there are grounds for believing that the underlying trend will still be upwards. Independent commentators suggest that farm incomes will grow largely in line with the movement in the consumer price index, thereby consolidating last year's upturn. The reversal of the adverse relationship between output prices and input costs in 1981 and 1982 should be maintained in 1983 as inflation continues to abate thereby ameliorating the impact on farming costs.

This year the farm prices package, which has such an important impact on agricultural development, was a most satisfactory one. The main features of the agreement represent an average increase of 8.2 per cent in our farm support prices, including an increase of 3.8 per cent arising from the adjustment of the Irish green rate. In addition, agreement was reached on a revaluation of the ECU to take account of the upward trend in the value of the £ sterling, and this has enabled a further 1.2 per cent adjustment of the green £, which was agreed last week by the Agriculture Council and came into operation at the beginning of this week. Taken together the increases in support prices and these revaluations will give an average increases in Irish prices of 9½ per cent. The price agreement also provides for an increase of 3.3 per cent in the buying-in co-efficients for our intervention beef, the continuation of the calf premium of £23 per head for livestock producers, the special additional FEOGA financing for suckler cows and the continuation of the AI and lime subsidies for a further year. The overall benefit of the package to the Irish farm sector is estimated at £255 million in a full year. This is an impressive income boost not only for farmers themselves but also for the entire national economy.

This figure of £255 million, however, represents only part of the Community benefit to Irish agriculture. It shows the effects of one year's price increase. Our farm sector also benefits from the effects of past decisions. These benefits are partly reflected in direct transfers from the Community; in fact, in 1982 my Department paid out as much as £362 million from the guarantee section of FEOGA. In addition, there are, of course, the benefits of the higher prices realised from sales of agricultural products within the Community. These sales do not normally involve FEOGA payments but the higher prices obtained represent very real benefits indeed to Irish farmers.

The Common Agricultural Policy was a major element in the discussions which took place at the European Council in Stuttgart over the weekend. As Deputies are aware, the funding of the CAP is closely linked with the Community budget problem and the provision of new own resources. A number of member states have been pressing for a thorough review of the CAP and its budgetary cost with a view to achieving greater controls and savings on agricultural expenditure. At the Council, the Taoiseach made Ireland's position quite clear indicating that any future discussions would have to take account of such factors as farm income and food security as well as the wider issues of trade and employment. He also emphasised the unacceptability to Ireland of any proposals which would freeze existing production levels, particularly for a country like ours with its low productivity levels and its large dependence on agriculture. What is now proposed, following the discussions in Stuttgart, is a review of all existing Community policies including the Common Agricultural Policy, consideration of the latter to be based on a neutral list of topics, which will not prejudice the direction that the review should take.

Turning now to the Estimates themselves, the gross sum for Agriculture is almost £329 million which is £8 million more than the amount expended in 1982. The net Estimate shows a decrease of £12 million on last year, but this reflects the fact that receipts are estimated to rise by £20 million. The principal increases in expenditure amounting to some £34 million arise under salaries and wages, disease eradication, the calved heifer scheme, the rescue package interest subsidy scheme, market intervention and UK variable premium payments. The principal decreases in expenditure amounting to some £26 million relate to the farm modernisation scheme, the disadvantaged areas schemes, costs of winding up the Pigs and Bacon Commission, and the now defunct winter fodder schemes. The £20 million increase in receipts to which I have referred arises mainly from EEC contributions in respect of special measures, market intervention and the farm modernisation scheme, as well as variable premium receipts from the UK.

The gross total of £329 million, does not represent the full picture in regard to expenditure on agriculture because it does not include most of the money handled by my Department in respect of EEC agricultural support measures. As I have mentioned, direct payments on these measures funded by the EEC amounted to some £362 million last year. In addition, a sum of £230 million was raised to meet the capital cost of intervention purchases of beef, butter, skimmed milk powder and barley.

I will now deal with some of the main agricultural products. Cattle prices have remained at the high levels attained in 1982 but many of our meat plants are working at well below their capacity. The industry is, therefore, somewhat unbalanced and will continue to be so until cattle numbers are increased. We are still affected by the high level of destocking which took place in 1980 when the factory kill, amounting to nearly 1.4 million head, was the second highest level ever attained. The factory kill in 1981 was 883,000 head and in 1982 this increased to 937,000. Slaughterings in 1983 are expected to show a further rise, to slightly more than one million head. However, the industry's capacity will still be very much under-utilised and a substantial increase in total cattle numbers is still needed.

In the context of the prices package export refunds on cattle and beef were increased by from 8 per cent to 14 per cent and in addition the green £ adjustments of over 5 per cent also applied to the export refunds. In the new rates the improved balance between refunds on meat and live cattle achieved last year is maintained. This will assist our factories to continue to compete effectively for the available supplies of cattle.

In the prices negotiations I highlighted the difficulties arising for Irish meat exporters because of the competitive advantages available to UK export traders from the operation at a high rate of the UK variable premium.

It was decided that the Commission would carry out an urgent examination of the operation of the variable premium and of other cattle related aid schemes in the context of their effect on the competitive position of exporters in the member states. The Commission is to report its findings by August. In the interim we are having discussions with the UK on the problem. The recent fall in the rate of premium has alleviated the situation somewhat for our exporters but a satisfactory solution of the problem is still required.

An expansion in the national herd is essential if we are to ensure adequate supplies for both the meat trade and the live trade, with resulting benefits for both the farming community and the national economy. In this regard the calved heifer scheme will be of a particular benefit and a sum of £5.5 million is provided under subhead D.2 for the scheme. This year's scheme provides for a grant of £70 on each additional heifer which calves, and this grant will be by way of a straight headage payment rather than as an interest subsidy as operated heretofore.

Arising out of the recent prices package the EEC-funded calf premium scheme will continue for a further year. The grant is now about £23 per calf and the scheme is worth some £40 million to the livestock industry. Coupled with the other headage schemes it provides a worthwhile financial incentive to farmers towards rebuilding the national herd.

As from 1 January 1983 certain changes in the procedures for tagging calves under the scheme were introduced. All herdowners were issued with calf registers and were authorised to tag calves born after 1 January, the AI bodies being responsible for the supply of ear tags to farmers. These revised arrangements are meeting with the co-operation of farmers and are working satisfactorily. I am arranging also to bring forward the inspection of calves by my Department's staff and this year herd inspections for all cattle schemes will commence on 11 July as compared with mid-August last year.

The national beef carcase classification scheme which had been introduced on a statutory basis in 1979, was superseded by an EEC classification system in June 1982. That system has not as yet impressed itself in a substantial way on factories' pricing policies, but it must be borne in mind that the level of factory activity in recent years has not provided the best environment for such policy changes. It is nevertheless important that investment in quality should be rewarded. The EEC classification system provides a means of describing carcases in a standardised manner in all member states, and this is beneficial not only in regard to purchasing and marketing but also as a guideline for production. Particulars of the classification of their carcases are given to the suppliers by factories, and this helps to make producers more aware of market requirements and thereby encourage them to improve carcase quality. The new Community-wide scale should also enable meat export plants to sell to greater advantage on export markets.

My Department are continuing the various measures for the improvement of the quality of both beef and dairy herds. The first importation since 1974 of Canadian Hereford and Angus bulls for use in the AI service took place recently. The Department are also continuing their programme of expanded progeny and performance testing for which a total of £730,000 has been provided, as part of subhead M.9. That subhead also covers the subsidy for inseminations by the AI service, which totalled 1,264,000 in 1982, an increase of about 10 per cent. This increase is largely attributable to the EEC subsidy of £4.94 for each first insemination. The subsidy was due to terminate last month but as part of the prices settlement I secured its continuation for a further year.

A sum of £757,000 is provided for CBF under subhead I.1. Beef is a highly export-orientated industry, and it is evident that CBF's promotional policy on the main Community markets has been paying dividends. It is important in this regard that the industry should consider its output as a consumer product and that efforts should be made to produce quality value-added products from the point of view of job creation domestically and expanded export outlets.

I have provided £273,000 in the Estimate under subhead C.1 primarily for the implementation of a revised milk recording scheme under which recording will gradually be taken over by the co-operative movement. The aim is that this reorganised service should result in a substantial increase in the number of cows being recorded, which is currently very low by international standards.

In 1982 creamery milk production at over 930 million gallons showed an increase of more than 9 per cent compared with the previous year and reversed the downward trend which obtained since 1979. Despite the bad weather conditions of the late spring and early summer the outlook for this year is for a further increase of the order of 5 per cent. Last year resulted in a substantial improvement in dairy farmer incomes. This year's price agreement combined with the expected volume increase should result in some further income improvement, although this will be reduced by the higher feed inputs because of the bad weather.

The Community milk market faces great difficulties at present. Deliveries are up generally and, due to the economic recession and pressure from competitors, exports are in decline. As a result stocks are rising towards historically high levels. Inevitably action is being taken to come to grips with these problems. While this year's price settlement was satisfactory, we undoubtedly face a period of lower price increases than we have been used to in the past. Nevertheless, it remains profitable to continue to expand milk production in Ireland. For a great many of our farmers increased milk production represents the only prospect of income security. We have a real potential for development in the dairy industry in Ireland and it is in the interests of both farmers and the economy as a whole to exploit it.

I have made the point repeatedly, both here and in Brussels, that the system that was decided on last year by the Council of Ministers and the Commission is not to the benefit of the Irish dairy industry. I refer in particular to the concept of production thresholds which are designed to reduce the price being paid for milk. This arises from the surplus of milk and milk products in the Community and it is the Commission's way to discourage increased milk production. This type of measure is contrary to the interests of Irish dairying because it is leading to a reduced price for our milk. We are by far the lowest producers of milk in the Community, taking the output per annum per animal. We have repeatedly claimed that in view of our underdeveloped position in milk production special concessions should be given to us. We will continue to press that case because I am afraid that the introduction of the milk production thresholds which have come into being over the past couple of years is detrimental to us.

While the increase in milk deliveries is most welcome, it has unfortunately implications for Exchequer expenditure. There is substantially increased usage of the EEC intervention support system here in the current year. At present my Department has about 30,000 tonnes of butter and 100,000 tonnes of skim milk powder in intervention stores, involving a capital investment of £190 million and it is expected that this investment will increase to £260 million by the end of the year. Any capital loss will, of course, be reimbursed by the Community at the time of disposal of the stocks but in the interim there will be a considerable net cost to the Exchequer in financing the capital and in storing the product. Such expenditure is justified in order to give the necessary support to the dairy sector and to encourage its continued development. Nevertheless, it represents a real financial burden for the Exchequer.

There is more involved in this than simply the Exchequer cost of intervention operations. There is also the important point that undue dependence on intervention is against the long-term interests of the dairy industry. If heavy use of intervention were to become the norm in the Irish dairy industry, commercial marketing capacity and expertise built up over decades would be put at risk and, furthermore, we would become very vulnerable to changes in EEC policy.

We are meeting with some success at Community level in ensuring that conditions are created to assist export efforts and improve domestic disposals so that the burden on intervention will be minimised. Decisions at Community level are not, however, all that is required. We must produce milk of a quality and seasonal spread which will offer the greatest processing potential; we must make the products which are required in the market; and we must achieve a greater and wider market penetration. These are mainly issues for the industry itself. As far as Government are concerned, the Exchequer will continue, through the IDA, to aid projects with real diversification potential. I intend to introduce later this year legislation to extend the duration and scope of the State backing for Bord Bainne's borrowings, which will assist that body's marketing activities.

During Question Time in recent weeks I have been speaking about the desirability of diversifying. We have been moving in too narrow a production level, concentrating on skim milk and butter production.

The market for pigmeat has been difficult for some time past and market returns to pigmeat producers have been declining since the latter part of 1982. Prices have now stabilised but they are still at a low level. In response to the poor market situation, which was worsened by an outbreak of foot and mouth disease in Denmark in January, the EEC Commission introduced aids for the private storage of pigmeat with effect from 1 February. As a result of strong pressures from Ireland, export refunds on the "Japanese" type pork cuts were also increased. These measures are going some way towards relieving the present market situation.

I take great heart from the good reports we are receiving about the quality of the pork we are sending to Japan. This is a most valuable outlet for our processors. This year we expect to export a record 15,000 tonnes of pork to Japan, almost three times the previous highest level in any one year. I understand the value of these exports is in the region of £45 million, a considerable figure.

Good progress has so far been made in ensuring the continuation of centralised export marketing of pigmeat. A new body, Pigs and Bacon Commission Ltd., was formed in August last to take over the functions of the semi-State Pigs and Bacon Commission. I expect to be able to introduce fairly soon the necessary amending legislation to formalise this transfer of functions.

Later this year the Council of Ministers will review the sheepmeat regime to see how it has fared since its commencement in late 1980 and to assess what changes are required. Looking back, one can say that the regime has offered a measure of stability not previously enjoyed by sheep producers. It was heartening to see the decline in sheep numbers arrested and then reversed. What is a little surprising is not that sheep numbers have risen in the past three years but that they have not risen more in response to the stability offered under the sheepmeat regime. Expressions like "pigmeat" and "sheepmeat" are a bit strange to our people but it is the continental way of expressing bacon and mutton and lamb.

What do they call chicken —"henmeat"?

The UK operates a variable premium system on lambs whereas all other member states operate a system of compensating producers by means of a ewe premium. The combined effect of the variable premium system and imports of third country lamb has been that the UK market price has not got close to prices in the rest of the Community. The differing support systems and the volume of imports into the Community will be among the issues to which we will attach importance at the review.

Before leaving this topic I should mention one other issue. Under existing arrangements whereby New Zealand enjoys access to the Community market. Ireland is regarded as a sensitive zone and this obliges New Zealand to respect traditional patterns of trade which in our case means zero imports. I have served notice that we intend to preserve that status. Over recent months our Customs authorities have detected a number of attempts to smuggle lamb, most of which was of British origin and some of New Zealand origin. Unfortunately the incentive to smuggle stems from the lower British prices and the New Zealand imports to which I referred.

Irrespective of the outcome of the review, there are certain things we must do to help ourselves. There is plenty of room for expansion in the sheepmeat sector but we must rid ourselves of the worst excesses of seasonality of production and we must take greater care in regard to the quality of our lamb. All the work by CBF in expanding existing markets or developing new ones will be of little avail if we cannot produce the quality product that the customer wants.

As part of the measures being taken to reduce Exchequer expenditure, it was decided that An Chomhairle Olla should be abolished and that the provisions of the Wool Marketing Act relating to the registration of wool buyers and the licensing of wool exporters should be implemented directly by the staff of my Department who were doing that work in any event. I feel I should avail myself of this opportunity to emphasise that the decision to wind up An Comhairle should not be interpreted in any way whatsoever as a reflection on its performance. On the contrary, the marketing of wool is now in a much healthier state than it was when the council was established. This is due in large part to the activities of the council.

That is why the Minister scrapped it?

No, it has achieved its purpose. The Deputy might be interested to know that there was a proposal in the Estimates prepared by the previous Government to do just that. There were some very sensible people around.

Although there has been some increase in the production of poultry and eggs. 1982 was not a particularly good year for the poultry industry. In the egg sector imports kept prices to producers at low levels. However, an encouraging feature has been the good response to the scheme of aid for commercial egg packers initiated in 1982, which enabled packers to qualify for FEOGA aid. The scheme has been extended into 1983 and the allocation under subhead M.5 doubled.

In the broiler sector a rise in output coupled with higher imports led to price-cutting and some disruption of the market. Towards the end of the year the industry succeeded in re-establishing a measure of market stability. Competition from Northern Ireland continues to make serious inroads into our domestic market, as Deputy Leonard repeatedly points out so correctly, and as the Ceann Comhairle used to point out frequently when he was on the Opposition benches.

These imports present the industry here with a formidable challenge if it is to regain its lost market share. We have a top quality product but to meet the challenge from imports all of our products must be of a consistently high standards and well presented to increasingly discerning consumers. In addition, diversification into further processed products is vital to meet changing consumer tastes.

1982 was an excellent year for the turkey industry, production increasing to a record two million birds, of which about 25 per cent went for further processing. Duck production also fared well, some 90 per cent of production being exported. The success achieved by top quality products in these two sectors should signpost the way ahead for broiler producers.

The acreage under cereals in 1982 showed a reduction of about 3½ per cent on the 1981 acreage but yields were above average. About two-thirds of the total cereals acreage is feeding barely, while wheat and malting barley make up most of the balance. In wheat there has been a swing in recent years from spring to winter varieties with the result that about 80 per cent of the crop is now winter wheat. More than 100,000 tonnes of the barley crop was taken into intervention by my Department but all of this has now been sold.

The 1982 yields were most peculiar in that the yields on the east coast and in the Midlands were exceptionally high, and in parts of the south such as in my own county and in east Cork they were extremely low. Nevertheless the overall output showed an increase.

The flour milling industry has been experiencing difficulty in competing with lower priced imported flour and I would like to appeal to all concerned — consumers, retailers, bakers, flourmillers and grain growers — to bear in mind the importance of a national flour milling industry to our economy. I can understand that the availability of cheaper flour is attractive but before availing of these lower prices the long-term effects of this action on our native flour milling industry should be considered.

Delays at grain intake points at harvest time are due mainly to a shortage of grain drying equipment. To alleviate this situation a sum of £100,000 is provided in subhead M.5 in respect of grants towards the cost of grain drying and storage, thus enabling applicants to apply also for a FEOGA grant.

Production of compound feeding stuffs in 1982 showed a very slight decrease on the 1981 level but this reflects the good grass growing conditions which prevailed last year rather than any underlying trend.

The commercial horticulture sector continued to make a valuable contribution to overall agricultural output, with a farm-gate value of £60 million in 1982. The acreage of field vegetables increased by 10 per cent while yields also improved. However, marketing problems continued for some products and, in the glasshouse sector, tomato growers in particular experienced severe competition from imports.

In order to improve the organisation and marketing of glasshouse products a sum of £35,000 is provided under subhead D.4 towards the cost of a market co-ordinator. The functions of the coordinator will be to streamline marketing arrangements and also to organise a much greater participation of growers into producer groups. In this connection £25,000 is provided under subhead M.7 to assist the formation and operation costs of such groups.

I was very pleased that last week we had a deputation from a new group set up by the IFA, the IFA's horticultural group. Their activities will be designed to improve the standards and the marketing of horticultural products. I will give every assistance to that group. It is time we had a national body doing that work, and it is nice to see that they are doing it on a voluntary basis. Their ideas are excellent and I hope the venture proves to be a success.

The acreage of maincrop potatoes increased by approximately 6 per cent in 1982 to 36,000 hectares compared with 34,000 in the previous year. In addition, there was an increase in yield over the previous year as well as improved harvesting and storage conditions. Consequently, there was a greater availability of home-produced supplies of good quality, resulting in a dramatic reduction in potato imports from 92,000 tonnes in the 1981-82 season to 14,000 tonnes in the season just ended. On the question of potato imports we have seen from the manner in which our competitors present their product that there is a great need for our producers and packers to improve quality and presentation. I think that there is now an awareness in the industry of this need; the significant improvement achieved in standards this season is evidence of this.

A topic much in discussion recently has been the expansion of food processing and the replacement of food imports. There is considerable scope here for the creation of added-value and for the provision of increased employment through the processing of native raw materials. At the same time, it is necessary to be realistic. Some of the discussion about food processing possibilities is based on an inadequate appraisal of the economics of the whole cycle of farm production, the handling and processing of the primary raw material and the marketing of the finished products. There are several relevant and vital factors that are not always taken into account.

First of all, it is necessary to be clear as to what we have in mind when we talk of food processing and the replacement of imports. For some, it seems to apply only to vegetables and potatoes. Important though they are, these represent only about 4 per cent of our agricultural output. Beef, milk, sheepmeat and pigmeat account for just over 80 per cent of the output, and so it is on the meat and milk sectors that we must rely for any significant expansion of food processing.

I do not want to underplay the value of the potential of vegetable processing but it only accounts for 4 per cent of our agricultural output. Nevertheless, the fact that we import such a vast quantity of processed vegetables is a highly emotive issue. We will make every effort to reverse that trend.

Much of our agricultural production is seasonal and this presents serious problems for the food industry. While seasonality is unavoidable, there is scope for reducing its extent. For example, earlier calving and better winter feeding can have significant effects in flattening the milk supply curve. The efforts by some dairy co-ops to secure a more even spread of milk deliveries are to be commended. We need more of this approach, and not merely on the milk side.

There seems to be an impression, too, that because we produce large quantities of beef and milk for export these products are available at cheap prices to food processing firms. That is not so. The prices of these products are supported by the EEC intervention system and processors here have to pay prices at least equivalent to those available from intervention. This means that there is a certain degree of competition between intervention and foodprocessing, which is an added reason for avoiding undue reliance on intervention.

In view of the limited size of our home market, any significant expansion of food processing must be based on exporting. One of the main reasons we find it difficult to maintain vegetable processing industries here and to compete with foreigners is because of the vastness of the combines involved which, in turn, is due to the huge populations they serve. Here again our food processors have no special advantage over processors elsewhere in the Community. On the raw material side there is no special margin available to them to offset higher costs elsewhere. Indeed, they may be at a considerable disadvantage if they have to pay unduly high prices for electricty or oil, if they have to meet high transport costs, if communications are too expensive or unsatisfactory, or if inflation and high interest charges add to capital and other costs. All those factors are of great importance in the food processing industry and, generally speaking, the costs I have mentioned are higher here than in other countries. If the Irish food processing industry cannot compete in price, quality, delivery and continuity of supply it cannot survive in the keenly competitive world of international food marketing.

It is against this background that any calls for State involvement in food processing would have to be considered. Past experience of such involvement has been anything but satisfactory. However, the State can do much to help the development of the food industry without directly participating in processing and marketing. The IDA provides direct assistance for investment in food processing plants and facilities, and substantial grants are also available from the EEC. Official encouragement can be given also in other ways. For example, in subhead I.1 a provision of £757,000 is made for CBF which is active in promoting the marketing of beef, cattle and sheepmeat. On the dairying side, much valuable work is done by An Bord Bainne, and of course the resources of Córas Tráchtála are available for the promotion of exports of food products generally. On the research side the expertise and assistance of An Foras Talúntais and the IIRS can be called upon.

In relying on private and co-operative enterprise to develop food exports there have, of course, been some significant advances and Irish agricultural products are now being exported to markets scattered throughout the world. Thus, we have a valuable trade in pigmeat to Japan; substantial markets for cattle and beef have been opened up in North Africa and the Middle East; dairy products are being sent to the Caribbean and South America, and so on. Irish exporters are displaying considerable initiative in tackling new markets. To take an up-to-date example, the large dairy co-operative in my own county has opened a new factory from which it is embarking on a major launch of yoghurt on the British market. I should not be so immodest: it covers Wexford and part of Cork also. This follows on the capturing of a major share of the yoghurt market here and in the North of Ireland. One of the major successes of recent years has been the development of exports of cream liquers which have caught on so well and are being copied by competitors throughout the world. But even this outstanding performance is having only a limited impact on our overall milk disposals. The total amount of milk absorbed by cream liqueurs in 1982 represented less than half of the 8 per cent increase in our milk production last year.

We must watch the entry into the world market by the United States, which is causing real difficulty when it comes to getting rid of milk products such as skimmed milk powder and butter. Bord Bainne have found that a number of markets which they had, and others which they were building up, have suddenly disappeared because of the intervention of the United States who are able to sell their milk products at a lower price than ours. It is a worrying aspect and I hope that some arrangement can be arrived at between the EEC and the United States whereby we can agree to a share of the markets, rather than having a price cutting war.

I do not want my remarks to be misunderstood. We can and must aim for more intensive processing of the agricultural raw materials we produce, but let nobody be under the illusion that we can overnight move from commodity trading for most of output of these products. The food processing trade is a highly competitive business and success can only be achieved by intensive efforts — through more efficiency in the factory, reduced costs, better marketing, and intensive selling. In this era of growing emphasis on added-value and convenience foods we must seek to obtain a share of the market for the types of products that the modern housewife wants. In that way we will be providing badly needed employment for our workers, saving money on imports and earning valuable foreign revenue from exports. For their part the Government will provide assistance towards the provision of the necessary manufacturing facilities and to enable processing firms to launch and establish new products. The industry has already displayed considerable initiative. Our objective must be to encourage greater enterprise through the injection of the right kind of State support.

The sugar industry is going through a period of adjustment which will bear its fruits in the longer term. At farm level increased specialisations is paying dividends in improved yields, and the impressive results of the 1982-83 campaign, with 223,000 tonnes of sugar produced from 85,000 acres of beet, brought us nearer to European norms than we have ever been. The Sugar Company still has major financial problems, although they were considerably alleviated by the provision of £30 million of new capital by the State. The company's new rationalisation plan was received last week and is now being examined in detail. I will shortly be putting recommendations on it before the Government and the aim will be to adopt measures which will ensure the continued existence of a viable sugar industry here for the foreseeable future.

A major provision in the Estimate is that of £57.2 million under subhead E for the consumer subsidies on milk and butter. The present rates of subsidy are about 4p per pint on milk in the Dublin area and 4½p per pint elsewhere and 35½p per lb. on butter. These are very substantial subsidies indeed, reducing the price of milk by some 18 per cent and that of butter by about 28 per cent.

From the introduction of the farm modernisation scheme in 1974 up to the end of 1982 some 105,000 farmers received grant-aid of £234 million repretin senting a total investment of about £700 million. The scheme has generated a very significant increase in on-farm investment aimed at improving efficiency, expanding output and raising farm incomes.

For 1983, provision is made in subhead M.1 for expenditure of £22.7 million on the scheme. This is a decrease of about £14 million on 1982 expenditure and reflects the modifications to the scheme which were made in the budget last February. The principal change was the temporary suspension of grant-aid for farm buildings and fixed assets, which will result in a saving of £10.3 million this year. In addition, the group fodder scheme has been terminated and guidance premiums and grants for mobile equipment and farm accounts were abolished, saving a further £2.5 million. A charge of £20 per visit was introduced for farm visits in connection with the scheme by staff of my Department and ACOT. Subhead N.24 of the Estimates contains provision for receipts of £1.5 million from these charges.

The primary objective of the changes was to save money in the current Exchequer situation. However, the Government are also mindful of the fact that the farm modernisation scheme has been in operation for eight years and of the very considerable amount of Exchequer aid made available over those years for farm investment. In those circumstances the Government considered that the time had come to carry out a fundamental review of the scheme and, following this review, to bring in whatever changes are found necessary so as to ensure that we get the best possible value for the money being spent. The review is in progress and is being pressed ahead as quickly as possible. It is my aim to introduce a revised scheme at the earliest possible date, probably in the late autumn.

To turn now to the western drainage scheme. This scheme, which is financed on a 50:50 basis by the EEC and the Exchequer, came into operation in January 1979 and aims at accelerating drainage in western areas. It provided initially for the field drainage of 100,000 hectares over five years but it was extended in July 1981 to include an additional 50,000 hectares. The response to the scheme exceeded all expectations. By the end of 1982, approximately 43,000 applications had been received. Almost 25,000 approvals have so far been issued covering 135,000 hectares involving grant-aid of some £51 million. A sum of £9 million has been provided in the Estimates for 1983 under subhead M.1.

The programme for western development implements an EEC measure providing for the injection into the western region of over £300 million over a ten-year period, about half of which will come from FEOGA and half from the Exchequer. Five million pounds has been included in subhead M.1 for this programme. This should enable grant-aid of £2.2 million to be paid for the improvement of 5,500 hectares and of £2.8 million towards investment by farmers following improvements plans. Under subhead M.2 a sum of £36.3 million is provided for livestock headage grants in the disadvantaged areas. In all it is expected that approximately 85,000 farmers will benefit from these grants this year.

For the 1983 headage schemes the Government decided to reduce the offfarm income limit to £3,500. This decision enables the limited financial resources available to be devoted to those who are primarily dependent on farming for their livelihood. Rates of payment are, however, being maintained and as a result a farmer in the disadvantaged areas can now receive up to £169 in grants under the various cattle headage schemes for each additional calved heifer and calf, while a farmer outside the disadvantaged areas can receive up to £118. These grants emphasise the benefit of these schemes to all farmers living in the disadvantaged areas.

A sum of almost £26 million is being provided under subheads C.2, C.3 and C.5 for the disease eradication programme in 1983. Despite the tight Exchequer position this year's provision shows an overall increase of some £2 million over last year's allocation. This is indicative of the Government's commitment to the disease eradication programme and to their determination to rid this country of the dual scourge of bovine tuberculosis and brucellosis.

The excellent progress achieved in recent years in reducing brucellosis infection levels was maintained last year and as a consequence herd incidence fell to 0.95 per cent at the end of the 1981-82 round of testing. This improvement has resulted in a reduced Exchequer requirement of about £2 million this year for brucellosis eradication. So far in 1983 there has been a further dramatic decline in brucellosis herd incidence to 0.25 per cent. That is a real reduction in the incidence of brucellosis. There is now a realistic expectation that this disease can be eliminated in the next few years.

The Exchequer requirements for TB eradication this year is £17.3 million which is an increase of some £4 million over the 1982 allocation. The bulk of this increased requirement is accounted for by the Government decision to increase reactor grants to herdowners, for which an extra £3 million was provided in the budget. Reactor grants which had remained unchanged since 1978 were increased very substantially with effect from the end of January. In addition to the standard grants paid for reactors a special payment is made from the hard-ship fund to herdowners with chronically infected herds who depopulate their herds on the advice of my Department's officers.

The situation in regard to TB is less satisfactory than is the case of brucellosis. Herd incidence increased to 2.76 per cent at the end of the 1981-82 round of testing compared with 2.12 per cent in the previous round. In the light of this upward trend a further round of testing was postponed, and veterinary resources were concentrated on special check testing of herds in highly infected areas commencing in June 1982. Evidence that this approach was effective has come from early results of the 1983 round of testing, which indicates a decline in herd incidence to 1.55 per cent — the lowest ever recorded. This is matched by a reduction this year of 30 per cent in the number of herds restricted because of TB. This improved situation is encouraging but I would prefer to await the completion of most of the round before drawing more specific conclusions. There definitely is a very encouraging trend.

As part of the extended two year plan for the eradication of bovine TB which was approved by the EEC Commission late last year we are committed to introducing "special status zones", commencing in the southern dairying counties. I propose to make a start shortly in this regard by declaring County Kerry a special status zone. The aim is to reduce the incidence of TB in herds in a zone to 0.2 per cent. This is to be achieved by more intensive and alternative testing of herds by private veterinary practitioners and Department veterinary officers and by strict controls over the movement of cattle into the zone.

An Comhairle Oiliúna Talmhaíochta (ACOT) is the national body specifically set up to provide agricultural advisory and training services formerly discharged by my Department and the county committees of agriculture. This includes the operation of the State agricultural colleges and also the Department's former functions in relation to the Stateaided private colleges and the Farm Apprenticeship Board. I am providing £15.456 million under subhead B.15 for ACOT's general purposes as well as £2.1 million under subhead B.16 for capital purposes. In addition, ACOT will be receiving some £4 million from local authorities. The grant, however, reflects the Government decision to phase out the amenity horticulture, poultry and farm home management advisory services, which will eventually result in the suppression of 57 posts.

ACOT are responsible for the implementation of that part of the programme for western development relating to the provision of new agricultural advisory and training facilities. This involves mainly the construction of 22 new agricultural training centres, the provision of an additional 190 student places at existing residential colleges and the establishment of an Advisory Resources Centre at Athenry as a training centre for agricultural advisers. The grant-in-aid for capital purposes includes provision for continuing this building programme in 1983, and a FEOGA refund of 50 per cent will be made in respect of eligible costs incurred.

The county committees of agriculture, which now include representation of the voluntary agricultural organisations active in each country, have the task of preparing and submitting to ACOT the annual advisory and training programmes considered necessary in each county. In addition they monitor the implementation of these programmes by ACOT and make recommendations where necessary for their improvement. Also, they continue to operate a number of livestock premium and other agricultural schemes at county level. Provision is made under subhead B.6 for £150,000 in grants to the committees to supplement their income from rates contributions.

The amount being provided for An Foras Talúntais this year is £15.05 million under subhead B.3. In addition, An Foras receive financial contributions from the agricultural industry itself and these constitute a most practical and tangible recognition of the valuable research work of An Foras, which is so essential to the expansion and development of the agricultural industry.

Over a considerable span of years my Department were responsible for the provision of training in poultry husbandry and farm home management at the Munster Institute in Cork. In recent years the facilities were provided at the Munster Institute for ACOT and UCC. In view, however, of a sharp decline in the demand for the services provided, the change which has taken place in the organisation of the poultry industry, and the overall pressure on Exchequer funds, the Government decided that the institute should be closed and the property sold. Arrangements are, therefore, being made with ACOT and UCC for the relocation of the courses.

The sum included for Bord na gCapall under subhead J is £654,000 as compared with £950,000 in 1982. The board have had problems in the past year or so and their affairs are at present being managed on an interim basis by three officers from my Department. I have just received their views on the board's activities and on what they have been doing to put their operation on a sound and proper basis. I am considering these and I shall take decisions shortly on the composition, functions, et cetera of a new board.

There are a number of interest subsidy schemes in operation to help farmers, who had borrowed for farm investment, to overcome the difficulties resulting from high interest rates. Under the EEC interest subsidy scheme for which £3 million is provided under subhead M.1 a subsidy of 5 per cent per annum is payable for two years to development farmers on borrowings for on-farm investment. Since its introduction in September 1981 7,000 farmers have received subsidies totalling £5.3 million. The 5 per cent national interest subsidy scheme was introduced in December 1981 for non-development farmers participating in the farm modernisation scheme. Over 5,000 farmers have so far been paid subsidies amounting to £1.6 million and the provision for 1983 is £1 million under subhead F.3. As announced in the budget, a second year's subsidy under this scheme is confined to those participating in the reduced interest scheme for farmers in severe financial difficulty better known as the rescue package. The latter scheme is intended to cover a hard core of farmers who are not able to meet their interest payments, but who can regain viability with the aid of the scheme. The scheme is being implemented by the financial institutions, portion of the cost being met by the State, partly through direct payments and partly by way of tax credits. Subhead F.4 provides £5 million to meet the Exchequer commitment in relation to direct payments in 1983. Some 9,000 applications have been received under the scheme, and I understand that about 3,000 are already receiving benefit. In view of the nature and complexity of the scheme, progress is as good as could be expected. I must say I am not happy that it is as good as it should be. Investigating individual claims can be complex because of problems involved. However, we must not be complacent and I am hopeful the rate of progress will increase.

Other schemes involving State guarantees on loans by the banks and the ACC for agricultural purposes are being continued. A sum of £1 million is provided under subhead F.2 to meet the exchange risk of the lending institutions in respect of low interest loans financed from foreign currencies, while under subhead F.1 a provision of £300,000 is made to assist certain advances made by the ACC to agriculture-based industries.

A sum of £37.1 million is provided under subheads M.3 and M.4 in respect of expenses and losses on market intervention. These expenses cover such matters as storage, deboning and transport costs as well as interest on the capital borrowings used for the purchase of the intervention products. Intervention activities are carried out on behalf of the EEC and the expenses incurred are recouped from FEOGA by way of allowances based on average costs throughout the Community. A sum of £24.7 million in respect of these recoupments is provided under subhead N.15. The net difference of £12.4 million mainly reflects the relatively high interest charges here compared with the average level allowed by FEOGA in respect of the borrowings for intervention purchases. The rate paid is considerably higher than 9 per cent and we have to meet the shortfall.

A provision of £12.6 million is made under subhead M.9 in respect of expenditure under the EEC programme of special measures for Ireland. These measures were due to expire last month but as part of this year's price package I secured a further year's extension of the principal measures, namely the AI subsidy and the ground limestone subsidy. Both these subsidies have been extensively availed of in the past two years and have had a significant impact on the usage of AI and ground limestone. Over the two year period of the subsidy schemes inseminations have increased by 20 per cent and about 1,650,000 tonnes of ground limestone were applied in 1982 as compared to less than a million tonnes in 1980. The continuation of the two schemes for another year should further boost the usage of AI and limestone with beneficial results for production, particularly in the beef cattle sector.

To meet our contributions to FAO and certain other international organisations as well as to finance certain aid measures for developing countries some £2.6 million is being provided under subhead K. This is an increase of over £300,000 on the 1982 figure. Contributions are also being maintained to a number of Irish agricultural organisations such as the ICOS, ICA, Macra na Feirme, Muintir na Tíre, et cetera. These appear under the B group of subheads.

I mentioned earlier that receipts are up by £20 million. This arises mainly from EEC recoupments relating to the farm modernisation scheme, subhead N. 13, market intervention, subhead N. 15 and the programme of special measures for Ireland, subhead N. 18. The fees payable to my Department for inspection services at meat and bacon factories and dairy premises as well as those for the inspection of livestock exports have been updated and the resulting additional receipts are reflected under subheads N.19, N.20 and N.21.

I now turn to the Estimate for Lands. The gross Estimate is just over £16.2 million, a decrease of some £400,000 on the out-turn for last year. The Estimate does, however, provide for increases on some subheads, principally for salaries and wages under subhead A and for increased contributions towards the revision of annuities under subhead E. These contributions are in the nature of statutory commitments and, with the provision in subhead G, represent the taxpayers' contribution towards the service of the land-purchase debt accumulated since 1923.

The increases provided for are more than offset by reductions on some other subheads. The reductions arise from decreases in Post Office charges under subhead C., a reduced deficiency in the income from untenanted land under subhead G. and a reduction in the provision for improvement works under subhead J.

However, the largest single reduction, over £900,000 on subhead H.1 arises from the decision to suspend the operation of the farmers' retirement scheme in so far as it provided for the sale of land to the Land Commission. This scheme has not been a success. Fewer than 600 farmers have availed of it in its nine years of operation. Nevertheless, and despite the small numbers participating, the cost of the scheme has been considerable. Two factors account for this. First, because of the age pattern and location of the farmers who retired, only a small proportion of the cases qualified for subvention by the EEC. Secondly, resale of the lands purchased by the Land Commission has involved the State in heavy losses. The EEC Directive under which the scheme is operated is due for review before the end of 1983, and in conjunction with this, I intend to examine the whole question of farmer retirement to see whether a more imaginative retirement scheme can be devised to make the whole notion of retirement more acceptable to elderly farmers and to channel land to young active men with the capacity to work it better.

Here I would like to deal briefly with the general question of land policy. Following the virtual completion of the transfer of ownership from landlords to tenants, the State has been concentrating for many years on a policy of enlarging and improving smallholdings. This programme has been implemented through the acquisition and redistribution activities of the Land Commission. For some time now there has been widespread criticism of the efficacy of this policy.

In any event given a Land Commission acquisition target of 30,000 acres a year, the impact in terms of our total land area could only be minimal. As well as this, the cost of land and high interest rates have led to a situation in which the Land Commission have been forced to dispose of their acquired land at a considerable loss. This loss has to be made good by the State and places a sizeable burden on the taxpayers, which is difficult to justify at a time of severe budgetary restraint. Realistically, then, I think there is little prospect of a resumption of large-scale acquisitions of land by the Land Commission.

With compulsory acquisition and redistribution of land becoming less significant the time is opportune to develop a new constructive role for the Land Commission. The commission's field staff have a century of tradition behind them. They have a vast pool of knowledge and experience, which makes them wellequipped to deal with the complex problems that surround land ownership. In seeking to make productive use of that valuable reservoir of expertise, I would like to change the image that some people have of the Land Commission by turning it into an agency that will provide a positive and constructive service to people who want help in solving their land problems.

One activity which has already been put in train is the encouragement of local groups of farmers to join together to purchase land that comes for sale in their locality. The Land Commission field staff have been instructed to assist any such groups and to advise them on, for instance, the subdivision of the land and any rearrangement of holdings which might be necessary.

Fragmentation of farms is another problem that needs to be tackled. There are many able and progressive farmers who are frustrated in their efforts to expand production because their land is in scattered units. For many of these the shape and lay-out of the farm unit is more important than its size. I believe that there is enormous scope in all parts of the country for restructuring these scattered and intermixed parcels of land into compact units. I would like to see groups of farmers who are anxious to rationalise their fragmented holdings coming to the Land Commission and asking for help and advice on getting the job done. If they do come, then I can assure them that the assistance will be readily forth-coming. The commission will do the paper-work and arrange for transfer of ownership of the final holdings to each of the occupiers. I would urge farmers who see a prospect of rearranging their holdings in agreement with their neighbours to think seriously about this. The restructuring and unification of holdings could certainly increase the production potential and general efficiency of their operations.

As far as broad land policy goes, there is universal agreement that the overall aim must be to optimise the use of our land resources. Unfortunately, a substantial share of the land is in the hands of people who, for various reasons, are not using it efficiently and are unlikely to do so.

Our ability to reach optimum efficiency is limited by various factors but especially by the low rate of mobility of land. This lack of mobility is a product of the owner-occupancy system of land tenure and it will not be easy to overcome. There is nothing intrinsically wrong with the owner-occupancy system, but it does lead to some inflexibility. The bulk of land transfers are within families and only a small percentage reach the open market. The problem is how to make the best use of available land while still retaining full regard for the rights of private ownership. It is a difficult problem, but we must try to overcome it because this lack of mobility is preventing younger and more energetic farmers from gaining access to land. Bearing in mind the failure of the open market to provide more than a minimal turnover annually, it is necessary to look to earlier family transfers and leasing to improve mobility.

The traditional pattern of late transfers to an heir creates its own vicious circle. It means that heirs are relatively old and past their most energetic and enterprising period when they achieve ownership and they, in turn, hold on to the land long past the age of active farming. As a result the necessary dynamism for the fullest use of the land is absent. I appreciate that the matter of succession is a very personal and private one and that intervention by outsiders could do more harm than good. Nevertheless, there is much to be said for the promotion of a more enlightened approach. Within families early transfer could lead to increased production and better income for the whole family. Partnership arrangements or phased transfer of management between owner and heir could be useful also in bringing benefit to those directly concerned. A close study of the whole question of farmer retirement is being made to see whether the State could intervene in an acceptable way to encourage earlier transfers.

Probably the quickest means of moving land towards younger people is through leasing. The market would be widened greatly if a pool of land could be made available for medium or long-term letting on a more or less regular basis. Term letting should appeal to those landowners who because of age or infirmity cannot work their land effectively but who still want to retain ownership of it. At the same time many farmers, especially young farmers, are anxious to get extra land but cannot purchase outright because of the high capital cost. Indeed, one could say that a pool of land for leasing already exists in the one million acres or so let each year on the 11-months system.

If a leasing system is to be developed a basic requirement will be to separate the concepts of ownership and management which for so long have been regarded as almost inseparable. Many farmers let land on the 11-month system year after year, very often to the same person. The practice has often been condemned and, indeed, some people have called for legislation to make it illegal. While the system leads to the inefficient use of land I would not favour going so far as to make it illegal, if only because of the impracticability of effectively enforcing any such law.

If the 11-month system is to be discouraged, I think we must try to convince those who are letting their lands on this semi-permanent basis that it would be in their own best interest to adopt a fixed-term arrangement. For example, there would not be the present risk of having the lands exploited and run-down. If the owner wanted his land back at the end of the fixed term, it would go back in good condition. Nor should he fear losing out at a time of rising rents, because any normal lease will provide for periodic reviews of the rent payable. The lessee, on the other hand, will have a guarantee of possession for a stated number of years, and he can plan his enterprise in a rational and constructive way without the uncertaintly of renewal from year to year.

I believe that, if we can get land moving through leasing and if we can secure a wider acceptance of the concept of term-leases, agricultural output will increase significantly. However, because it is a novel concept in Irish agriculture it will require an energetic campaign to sell it. We must also set out to dispel the fears some people have that leasing will put their ownership of land at risk. Some may fear that a lease will be able to claim a tenancy interest which will be upheld by the Land Commission or that the commission will intervene to acquire land that is let on lease. My Minister of State, Deputy Paul Connaughton, has already given unequivocal assurances on these points, but I think they can bear repeating. I would, therefore, affirm once more that the Land Commission will not issue a section 40 notice in respect of lands which are the subject of a bona fide lease nor will they accept any claims for tenancies in respect of leases made in recent times, or from now on.

There has also been speculation about provisions in land legislation, which might be seen to inhibit the development of leasing. The more important of these provisions have now been identified, and I expect that a Bill amending or repealing them will be ready for introduction in the autumn session. My own belief is that fears on this point are more imaginary than real, but nevertheless we will take steps to put peoples' minds at rest.

There have been suggestions that financial incentives by way of cash grants and so on should be made available to lessees and lessors. Leasing should be established and accepted as an ordinary commercial arrangement rather than as an artificial device which had to be kept going by subsidy. In any event, I can see no possibility of providing cash incentives in the present severe budgetary situation. We have got to get away from the attitude that nobody will do anything, even something that will benefit themselves, without getting a grant or subsidy at the taxpayer's expense.

I have already mentioned my intention to change the traditional image of the Land Commission by giving it a new role in providing a constructive service to people who need help in solving land problems. Among these tasks will be a positive involvement in promoting the idea of leasing. I have in mind, for instance, that a group of Land Commission inspectors will be assigned specifically to the task of promoting and encouraging this in their areas. They will foster discussions and interest in leasing and co-operate with farming organisations, co-operatives and other local bodies who are anxious to bring potential lessors and lessees together.

As a token of support for the promotion of leasing I have provided in subhead H.5 of the Lands Vote a sum of £25,000 for the current year. This is more a gesture of support for the idea than anything else.

One could only buy ice cream for that money.

Gestures are important, and if I make kind gestures to the Deputy and others it should be taken in the right spirit.

Seven holdings acquired in County Galway this year.

And seven last year.

While I am optimistic that progress can be made in fostering leasing, I am also conscious that there is no quick road to success. There will be no shortage of lessees and the real task will be to persuade potential lessors to make their lands available. Leasing is a novel concept in Irish agriculture, and the idea will have to be sold to people who in the nature of things constitute the older and more conservative element in the farming community. There can be no question of people being forced to lease. They can only be encouraged to do so; the final decision must remain with them. However, I am confident that, with dedication and goodwill on the part of all those involved, we will be able to bring about this change in Irish land tenure custom. By so doing we will contribute towards achieving the goal of optimum utilisation of the potential of the land, with consequential benefits for the farming community and for the rest of the population.

(Limerick West): At the outset I should like to repeat what the Minister said at the conclusion of his speech:

By so doing we will contribute towards achieving the goal of optimum utilisation of the potential of the land, with consequential benefits for the farming community and for the rest of the population.

They are laudable words, but words are not good enough at a time of recession in farming and agriculture in general. When one thinks of the gesture — I hope it is only a gesture — of allocating £25,000 in the Estimate of the Department of Lands for the promotion of leasing, surely the Minister, the Minister of State, or the Department cannot be taken seriously. I put it to the Minister, and his Minister of State, that they should put the money where their mouths are if we are to get an answer to the problem of development of agriculture.

I must make it clear that we are opposing the Estimate and I will give our reason for doing so in the course of my address. Notwithstanding what has been said by the Minister in the course of his contribution, and the inhibitions of the Department and the Government in the last eight or nine months, Irish agriculture can make progress in the future. But there was not one syllable of hope for the future of agriculture in the Minister's speech. His speech amounted to no more than an annual report and did not express any hope for the farming community in the future. He did not indicate any way forward for farming or set any guidelines for the development of agriculture here in the years ahead, although agriculture is providing up to 50 per cent of our total net exports and employing 50 per cent directly and indirectly of our total population. There is no hope given at all for the future. We only have a rehash of what has developed in agriculture over the last few years. Surely when we are discussing this very important Estimate it is an opportunity for the Minister and his Department to give us a look into the future, to let us know where they are going, where they will move forward into the future and how agriculture can develop.

What have we got? Hollow phrases make very hollow reading indeed. I have a copy of the Fine Gael Programme on Agricultural Policy produced by that party on 15 November 1982. They showed a very different approach in that document. The Minister's speech today makes very hollow reading when one considers the dismal hopes for the future of agriculture. The Department of Agriculture and the Government have starved this vital industry of the necessary finance which up to this had always been provided. Finance should have been provided this year and should also be provided in future years. This clearly outlines the Government's approach to the development of our most important industry and the role which agricultural development can play in the recovery of the economy.

The sudden interest of the Taoiseach in Irish agriculture at long last is encouraging even though he had to go to Stuttgart to see the light. After he returned from the EEC summit he assured us that the future of our greatest industry was guaranteed. He listed a number of what I shall politely call adjustments but they do not give any guarantee for the future. We are indebted to him for his brilliant discovery that Irish agriculture at long last has a role to play in our economy. He discovered another aspect of agricultural development, the importance of our dairy industry in our economy. One could be forgiven for saying that he felt that this brilliant discovery of his was so earth-shattering that he should announce it himself rather than allow the Minister for Agriculture to take credit for this great leap forward in knowledge. Milk producers can feel more confident as a result of the Taoiseach's announcement. Nevertheless, I feel they can think again, if the Government allow inflation to remain at a level which could lead to a fall in the price of milk to farmers next year and if the present Brussels policy on milk continues.

The Minister outlined many areas of farming development rather than areas where he will show us the way forward. My colleagues and I will refer to many aspects of farming development. I am not blaming the Minister completely for fixing EEC prices for the present season. However, they caused a great loss to farmers, especially milk producers, and, to a certain extent, undermined confidence because of the uncertainty created. The losses sustained and the shattering of confidence were compounded by the extremely bad weather this spring and early summer. Crisis conditions prevailed for many farmers with critical delays in crop sowing and cattle having to be rehoused during what is normally a grazing period. No reference was made to that in the Minister's speech.

The losses to farmers are very substantial. During this time of extreme difficulty we have not heard one Government voice raised in sympathy or understanding. This is another link in the chain of the Government's lack of interest in our most important industry. Extremely unfavourable weather conditions occur only infrequently but when this happens, like this year, they call for appropriate understanding and help. Never was leadership more needed to restore confidence and encourage a higher output but farmers have not got any and they cannot expect any from the Government. This has been outlined very clearly in the Minister's speech this evening. No hope, leadership or guidance for the future has been given by the Minister in his remarks. Often our farming community are accused of moaning to much and too frequently. Under the present regime and conditions I am sure the House would agree with me they have a lot about which to moan.

That being said, there are areas in which they could improve their lot through some action of their own. Here I am thinking particularly of catering for the consumer, who unfortunately at present is rejecting an amount of Irish produce, especially vegetables, and to which the Minister made reference in the course of his remarks. I hope the Minister of State, Deputy Hegarty, who has responsibility in that area, will ensure something will be done. I go along with the Minister in his sentiments about encouraging the vegetable group now formed by the IFA. I hope they will receive encouragement, perhaps more than that, to ensure that food imports are curtailed so that we shall not reach a damaging stage not alone for our farmers but for our balance of payments. I hope the Minister of State will set about this important task, ensuring that our producers will present a product entirely acceptable to the consumer.

However, they need leadership, guidance and much more than the mere waffle now emanating from this Government and particularly that emanating from the Minister of State, Deputy Connaughton, with regard to the land situation. I have been accused of this and that, but I want to point out clearly to the Minister our position with regard to that aspect. I am merely giving an example of how Ministers, when they realise that agriculture is basic to our economy, tend to maintain that that is something new, something they have discovered, just as the Minister of State, Deputy Connaughton, maintains that land leasing is something new he has discovered and that the Land Commission must be revamped. This warrants serious considerations if we are to influence the destiny of our agricultural industry here. I cannot repeat too often that this guidance is not being given by the Taoiseach, the Government or his Ministers individually.

I spoke about farmers self-help and that producers should present a commodity entirely acceptable to the consumer. With proper guidance from the Department producers could do a lot to lessen the import of food products which could easily be produced at home. This is an area in which the Minister of State, Deputy Hegarty, could consult and talk with agencies such as the IDA and SFADCo who have the expertise to ensure a proper approach to production, processing and above all, to the presentation of our products.

What we want is action, not talk. Producers might concern themselves more directly with the marketing of their produce, ensuring that the improvement in quality and presentation needed can be achieved. I would urge them to be more active in the formation and operation of producer groups. I am sorry that Deputy Hegarty is not present. I hope his colleagues will tell him that for the promotion of producer groups there are subsidies and grants available from EEC funds. This applies not alone to the food processing industry and the vegetable industry but other areas as well in which producer groups in other member states have played a vital role in the development of their produce. I would ask the Minister to examine the role such producer groups have played in other EEC countries and ascertain how best it can be put to the benefit of our producers. I am examining that area myself at present and shall be very glad to make any research available to me available also to the Minister so that something along those lines can be implemented.

The Minister and his Department should give every encouragement to the development of successful producer groups so that they may play a vital role in the development of our agriculture, rendering their products more acceptable on the home market and in that way curtailing the amount of imports of food which can quite easily be produced here for the benefit of our consumers and employment generally.

I want now to say a few words about the cattle industry. I might suggest that the Minister and his two Minister of State read our document The Way Forward. They have a lot to learn——

(Limerick West): They might also read our 1980 White Paper on land structure. In The Way Forward we said we believed — and we still believe — that the growth of our national herd is the key factor in determining agricultural growth in the years immediately ahead. Conscious of the virtual halving of our national cattle herd as a direct result of the cattle crisis of 1974, we introduced the calved heifer grants, the calf premium and the suckler cow grants. I am glad that this Government have continued those grants. I would hope they would take another leaf from our book and read back over the years of the progress made by this party in Government in so far as agriculture is concerned. But an increase in cattle numbers is not in sight. I often wonder at the lack of appreciation of the importance of the cattle industry in the non-farming community. The decline in stocks is a continuing and totally avoidable loss to our balance of payments and has been responsible for the closure or the short-time working of meat factories.

Calf mortality is still far too high. Here I should like to see more guidelines from the Department. I know that the research station at Grange is carrying out research in regard to a reduction in the calf mortality rate but I do not think enough is being done. It is causing a loss to the economy and particularly to the farmers. Calf losses could be greatly reduced. I urge the Minister, with the help of his Department and other State agencies such as the Agricultural Institute, ACOT, the co-operatives and, above all, the veterinary profession, to launch a concerted campaign to reduce calf losses to a reasonable level. This can be done, but the Department must set out the direction and the guidelines.

The Minister referred to bovine tuberculosis and brucellosis which are causing great concern to the farming community. More progress should be made in the eradication of these diseases, particularly bovine tuberculosis. I give the Minister credit for implementing our proposals in The Way Forward with regard to compensation for reactors. That should have been done a long time ago, but better late than never. If the farming community is adequately compensated for the disposal of reactors there would be a major improvement in the programme to eradicate bovine tuberculosis.

I wish to pay tribute to the staff of the Department for their work in this difficult area. I must also pay tribute to the veterinary profession who have played a vital role — perhaps not always recogpensatio nised — in the eradication of bovine tuberculosis. When blame had to be apportioned, at times they were the fall guys. Perhaps at times they were at fault but it cannot be denied that the veterinary profession have played a major role in reducing the incidence of brucellosis and I hope they will play a vital role in the future in the elimination of bovine tuberculosis.

Some farmers are uneasy at the recent public statement of representatives of the veterinary profession who said they were not consulted on the latest steps which the Minister outlined in the drive to eradicate bovine TB in the south-west. Perhaps the Minister will clarify to the House the exact position because it is an important matter. It would be a retrograde step if the veterinary profession were not consulted on this matter because they have a vital role to play in the eradication of disease and particularly of brucellosis. I hope they were consulted, but I must point out that in their statement they said that was not the case. I am asking the Minister in his reply to set out the position.

I congratulate the people concerned who have done valuable work in the programme to eradicate disease. The co-operation of the veterinary professional farmers and the veterinary officers in the local offices is vital. Time is not on our side so far as the eradication of disease is concerned. I hope that what is happening in the south-east and also the progress that is being made in Kerry will bear fruit. District veterinary officers and their staff should be given more responsibility. Of course they must operate within the national guidelines but they have local knowledge and know what is best for their own area. They have the knowledge and experience and also the contact with local farmers. They know best how to deal with the problem in their own county and they should be given more freedom to deal with this great scourge. What affects the farming community affects the whole country. The cattle industry has a very important role to play but we need the co-operation of the Department if we are to eradicate this disease.

Over the past few months much has been said and written about land structures, land mobility and the development of a land policy. As spokesman for Fianna Fáil I have been misinterpreted and misquoted very often. I want to state categorically that our policy on land mobility and the development of a proper land structure was set out very clearly in our White Paper, published in December 1980. I want to put the true picture on the record. The Minister says we did little about land mobility and the development of a proper land structure but he must realise that the White Paper, which was our guideline, was published in December 1980 and the following June there was a change of Government. This is a very complex problem to which we gave very deep thought. The guidelines set out in the White Paper are as true now as they were in 1980.

There was a White Paper and a Green Paper. I thought the Green Paper set out political conclusions.

(Limerick West): I am talking about a White Paper.

There are two.

(Limerick West): We will talk about the White Paper. At that time we aimed to devise a system so that as much agricultural land as possible could be channelled to progressive small and medium farmers who were making the best possible use of their existing holding, and to young persons with acceptable agricultural experience and training. We have been maliciously misrepresented in regard to our attitude to leasing. Our party were the first to propose a standard type lease capable of general use which could be adapted to meet special circumstances and which would provide adequate protection for both the lessor and the lessee. The present Government have dropped some of the most important safeguards we had built into our White Paper.

The compulsory acquisition powers of the Land Commission have been withdrawn. I would like to remind the Minister that the Land Commission operated as a very effective social safety valve in otherwise explosive situations. I agree with the Minister when he says that tensions have always risen in some areas in connection with land. That could be dangerous if allowed to develop. I warn the Minister to be very careful to avoid a new form of landlordism which could be brought about by a lack of adequate safeguards in the system. This is important and I ask the Minister to look very carefully at it.

As I said, the Government decided to suspend the compulsory purchasing powers of the Land Commission and they have permitted EEC nationals to settle in Ireland and to buy land without restriction, because of pressure in the EEC. I accept the Minister's viewpoint on that, but what I do not accept is the withdrawal of the safeguards in our 1980 White Paper. The way has been opened for wealthy individuals, Irish or foreign, to acquire large tracts of land without hindrance from any agency or source in Ireland. There does not seem to be any legal or other bar to the accumulation of hundreds, and possibly thousands, of acres of land into the ownership of one person. Because the safeguards in our 1980 White Paper have been withdrawn, the way is open to recreate a new type of landlord system.

The Land Commission had some imperfections but they served the nation very well over the years. They implemented a democratic structure of land ownership and did their best to make holdings viable. Above all, they tried to keep families on the land and provided some control, however imperfect, over the socially responsible use of land and an important safety valve when social tensions threatened to become explosive.

I repeat — and it cannot be repeated too often — that this Government have abandoned our aim of introducing comprehensive land legislation which would give a disincentive to the acquisition of land over a certain acreage. While I would be the first to agree that land policy reform is certainly required, and also a review of the Land Commission's role and function, the Minister's decision to open the land market to a free for all is a very serious decision indeed. The Land Commission have become even more redundant in withdrawing from involvement in land restructuring. However, I welcome the role which they will continue to play in bringing farmers together, as outlined in the speech of the Minister, Deputy Deasy, this evening. That is no new role, the Land Commission always brought farmers together and advised them on a more rational structure of their land holdings. I wonder if this will provide full occupation for the staff of the Land Commission. Nevertheless, we shall wait and see what type of legislation the Minister will bring forward in the autumn.

Another area which I would like to discuss here is that of part-time farming. It needs quite an amount of researching because it is far too complex an issue to warrant a simple for or against attitude. In some regions where the land is poor and incomes are low, the State has given positive encouragement to part-time farming as a means of maintaining the social fabric of that area and of society. Perhaps the absence of part-time farming might eventually lead to the abandonment of land whose productivity is low. In the more fertile areas, the relevant issues are not so much the other occupations of the landowner, but the proper use of the land and priority access of young people with training who want to enter farming.

It is important to remember that certain types of farming, while highly beneficial to the national economy have a low rate of return for the farmer. The cattle industry is an obvious example, where a turnover of something in the region of £30,000 to £40,000 may yield an income of only a few thousand pounds in a good year. The farmer with other sources of income may be in a better position to invest his farming profits in the land. If a farmer with another job has to hire labour, there is no net loss of employment. What is not acceptable is the neglect or gross under-utilisation of our land. The policy of the Department should be concentrated on the productive use of land and there should be a minimum turnover on every good acre. The land which comes on the open market should go, where possible, to the young, active farmer.

More is needed than mere legislation. There are legal problems. Above all, there is a taxation policy and Government expenditure should be concentrated on ensuring the more productive use of land with ultimate benefit to the economy and to employment. Our principle of land mobility is set out in the 1980 White Paper. That principle is as valid today as then — more valid, indeed, in view of Minister of State Deputy Connaughton's recent announcements. Both the Minister and the Minister of State in recent statements have chosen to disregard the legitimate and widely held concern about recent land policy development. They are prepared to gloss over the fact that the Government are going in the opposite direction to that proposed in the White Paper on land policy. Vital decisions have been taken in the very recent past without adequate announcements or adequate public debate.

I stated — and want to repeat — that the combination of the measures of opening the way to EEC nationals to buy land without restriction and of the cessation of the powers of acquisition of the Land Commission adversely affect land mobility and acquisition. I was not criticising, and never did criticise — any of these measures in isolation. I was criticising — and both Ministers failed to realise this — the complete dismantling of the safeguards proposed in the White Paper as the necessary accompaniment to any major changes in land policy. Contrary to the statement of the Minister that Fianna Fáil did nothing, Fianna Fáil prepared a White Paper with positive land policy suggestions for discussion, a paper which provided for open debate and encouraged recommendations from interested groups. What have the Government done? They have done nothing, published nothing. The Minister tells us legislation will be brought in before the autumn. When asked at Question Time today if this would be backed up by an injection of capital from the Exchequer or if leasing would be encouraged by giving incentives, the answer was "no".

The Minister is paying lip service to land mobility and land leasing. The White Paper recognised that certain changes such as land leasing and the opening of the land market to EEC nationals were inevitable. Safeguards were laid down in the White Paper but these are absent from the recent decisions which were taken. I am not against land leasing on a one-to-one basis. I appreciate far more than any Minister the useful role it can play. This party are anxious to avoid a situation where a person or company can buy up a number of farms and lease them to tenants. That would reconstitute landlordism.

The 1980 White Paper on Land Policy proposed a whole range of safeguards giving small holders and enterprising young farmers priority access to land. These have been ignored by the Minister. I will list a few of these safeguards: all purchases of land exceeding £5 rateable valuation would require the consent of the Land Commission; there would be a surcharge on land purchased by young farmers, part-time farmers and full-time farmers over and above a certain rateable valuation; special assistance would be provided to progressive farmers to enable them to acquire land. No such assistance is being provided by the Minister. That is the difference between a progressive policy on land mobility, acquisition and development and the negative attitude of the Minister and the Department. Another safeguard was the retention of the powers of land acquisition. The White Paper stated that to abandon the compulsory machinery of the Land Commission would be to accept, if not encourage, bad husbandry.

I and my party agree that the good use of land is more important than ownership, but the Minister has removed powers which the White Paper stated should be retained to ensure the good use of land. The Minister seems to be prepared to adopt a stop-go, careless attitude to land mobility. The opening of the land market to EEC nationals was only to take place within the safeguards.

The Minister's approach will be applauded by the money interests with the fat cheque books — speculators who want to invest in land. It will be a cause for concern and frustration to progressive farmers and young people who want a chance on the land. I accept that because of the Minister's pronouncements before coming into the House he is being dictated to by other members of his party and people who are not interested in land mobility. This has been proved. I am sincerely and genuinely concerned for the future of our young progressive farmers. If the Minister wants to call me a backwoods man for saying so, then that is what I am.

In a certain county a person attempted to acquire a number of small farms for private forestry development against the opposition of the local farmers and the Land Commission. This was the subject of a Today Tonight programme and showed clearly the real dangers I am warning about. The policy seems to be to meet the requirements of the wealthy interests. The Minister is creating a charter for merchant adventurers in relation to land and a new form of landlordism. At a time of high unemployment the family farm structure is the best guarantee that employment will be maintained on and off the farm and in support and processing industries.

In the Cork Examiner today Mr. Michael O'Leary, Chairman of the Cork County Executive, IFA, speaking yesterday at the Cork Show, said that he had been busily promoting to the farming community the concept of master lease, a legal contract drawn up with the assistance of AIB and other interests. The article states:

To date, leasing of land at reasonable rates for long terms has been the crux of the small and not so small farmer. According to Michael O'Leary the absence of proper legislation relating to long lease has been instrumental in the decline of fertile farming land.

In England, he continued, between 46 per cent and 47 per cent of farming land is owned by landlords and financial bodies and this is leased out at an average rate of £27 per acre. Larger holdings of 100 acres and over can be leased for as little as £34 or £35 per acre per annum.

In Ireland, the current legislation is that agricultural land can be leased only for 11-month periods.

He went on to say that this situation is likely to be changed after the autumn following approval by the Dáil of new legislation. He concluded by saying that Ireland would then have a fairer land leasing system and one that would be comparable with the English system. I am quoting this by way of emphasising to him what I have been stating in previous days, that is, that there is being motivated by this Government a policy that will meet the requirements of the wealthy interests. This is a retrograde step. It is a step which we on this side of the House will not tolerate and which we will ensure will not happen.

I must deplore the statement made during Question Time this afternoon by the Minister of State when a Member of this party asked about the farm modernisation scheme in the context of whether there had been a verbal agreement that the Minister had a legal, if not a moral obligation, to meet the demand in respect of that scheme. The Minister of State replied that there is a course of action open to the people concerned and the mentioned recourse to the courts. Is it the position so far as the Government are concerned that the only recourse a farmer has by way of getting his rights is to go to the courts? Surely the Minister is not setting himself up as a sort of dictator who will make decisions without prior discussion with the farming interests. I can only hope that when replying the Minister will withdraw that statement.

The agricultural sector must be relied on to lead us out of the current recession. I am speaking not only of the lot of the farmer but of the entire national economy. In a small open economy like ours economic recovery and increased employment must be export led. We have considerable potential to expand by way of foreign exchange earnings in the agri-food industry. As has been stated here already, the potential of our natural resources is a long way from being realised fully. Ireland's most valuable resource is her people and especially her youth. I look to the enthusiasm, the energy and the drive of our young people to interest themselves actively in an integrated rural development, but this must be encouraged by way of leadership and particularly by the Minister for Agriculture. Most progress results from the young pioneering spirit. I urge all agricultural interests to become involved in the formulation of plans and policies for national economic and social progress. This can be achieved through our greatest single resource, through our young people in the first place and, secondly, through the land.

Notwithstanding what has happened, Irish agriculture has been one of the most progressive agricultural industries in the world in the past ten to 15 years. Its growth rate has been 3 per cent to 4 per cent better than that of most European countries. Unfortunately, that growth rate declined between 1979 and 1981 but began to stabilise in 1982, with definite signs in the spring of this year of more output and more development. This development must be encouraged, but above all we must restore confidence to our farmers to help them develop the industry. This confidence was diminished as a result of changes recently in the farm modernisation scheme. This was acknowledged by the Minister this evening. Another factor that eroded that confidence to some extent was the withdrawal of other aids. In the period 1973 to 1979 farmers invested more than 30 per cent of their net income. This indicates their willingness to expand and to put new technology into operation. That period was important in the development of agriculture. Farmers increased fertiliser usage thereby increasing productivity. Silage making increased also and about 35 per cent more farmers switched to milking machines and adopted more mechanical means of cooling milk. This had a great bearing on milk quality.

Many farmers switched also to the milking parlour facility. A modern approach was adopted. Many cattle farmers provided extra buildings to take stock off the land, which is so necessary for the proper management of grassland. About 20 per cent of farmers adopted this approach. All these good practices were made possible by grants from the various services but those grants have now been suspended. While many farmers have availed of grants, there is still a long way to go.

About 45 per cent of our farmers have not sufficient facilities to take stock off the land and about 35 per cent have not piped water in the farmyard, a facility which is necessary for hygiene purposes to keep disease at bay and to produce a quality product. I spoke recently about disease eradication, particularly tuberculosis eradication, and good hygiene is very important. If the Minister is in earnest about getting rid of disease, the wherewithal must be provided to assist farmers in the provision of the necessary facilities. While milking facilities have improved, over 60 per cent of farmers have not as yet a modern milking parlour.

The average income on farm per labour unit is not more than £55 per week. This is surprising in an industry which is contributing almost 50 per cent of our total exports. We must also take into consideration the very low import content of agricultural products. Despite all the good things which have happened during the past 15 years, there is a need to continue the high level of investment which has obtained in the past and to make sure that the best technical knowledge is availed of and put into practice.

Uncertainty about prices for agricultural produce and the present low level of incomes makes farmers despondent. They must be encouraged if they are to sustain the production so necessary for our agricultural exports. It is important to appreciate the unique role of agriculture in our economy. Agriculture affects the lives of all our people, whether they are city dwellers or people living on the land, either through their income or through the cost and quality of their food. Farm exports are up to four times as beneficial to the economy as industrial exports in terms of the balance of payments.

This industry, which is the bedrock of the economy, was safely nursed through the world recession of 1979 and 1980 by a caring Fianna Fáil Government. The concern of this party and the well-known resilience of the farming community ensured that no permanent damage was done to farming by adverse weather conditions. Farming was cushioned as far as possible against outside influences. There must be a continuous policy of achieving the highest possible contribution from agriculture to economic growth, not only because this will mean maximum farm incomes but also because of the potential of agriculture for producing growth in the economy as a whole. When we left office agriculture was in a sound condition. We hope that this Government will give equal recognition to the importance of agriculture.

There has been agreement that this debate will continue from 10.30 a.m. until 12.30 p.m. tomorrow.

Dún Laoghaire): That was agreed with the Opposition Whip because of the number of Deputies who wish to speak.

(Limerick West): That is acceptable. I would welcome a reply by the Minister for Agriculture to this debate. Will he be given that opportunity.

(Dún Laoghaire): I would also welcome it. There has been some confusion. The normal practice is that the Minister would reply but unfortunately on one occasion this did not apply because there was some disagreement in the House. In view of the fact that the Opposition spokesman wishes the Minister to reply, we will arrange it.

(Limerick West): Could we decide on a definite time for the Minister to reply?

Mr. Leonard

I would hope that Deputies here would be allowed to speak, even if only for 15 minutes. It is important that all Deputies would be allowed some short time.

(Dún Laoghaire): I agree fully that the time should be extended. Because agriculture is of such importance to so many Deputies, there is no desire to stop anybody from contributing. Perhaps by agreement we could arrange between ourselves, when we see how things are going, that the Minister would reply in the morning.

Are Deputies in agreement that the Minister should be allowed to reply in the morning?

(Limerick West): At 12 noon.

It is agreed, then, that the Minister will get in to reply at 12 noon tomorrow?



And that the question be put at 12.30 p.m.?



I am delighted to have this opportunity to say a few words about agriculture generally and to reply to some of the points made by Deputies. I shall give a global view of the entire industry to begin with. I believe we realise now that the biggest single factor inhibiting growth in all areas of the economy is inflation, but there is not any other sector which is affected more by inflation than agriculture. Any Government serious about rectifying the problem, particularly the income problem of farmers, must take serious note of inflation.

I contend that this Government are going about their business so as to ensure that, irrespective of outside forces, our inflation will be forced down. From the best advice I have, our inflation rate is on that trend — it is taking a downward turn, and we hope that at the end of this year it will be in single figures. Without talking about aid of any description, this is most important, because if it happens that we have two, three, or in some cases four times the inflation rates of our direct competitors in the market place, we are not at the races. However, the policies we are pursuing at the moment are the correct ones in the circumstances.

We must ensure that pay restraint in the public and private sectors will be achieved. This small country is subject to outside influences over which we have not any great control and unless we decide to pay ourselves only in relation to the work we do — in other words, that we do not overpay ourselves — we will not whip our cost inputs in farming. I was amazed at the lack of time given to that aspect by the Fianna Fáil spokesman, because this is the important factor.

We should look at the inflation rates in the countries we have to compete against, such as Denmark, Holland and the UK, whose inflation rates are 3 per cent and 4 per cent and 3.7 per cent. They are some of the countries we have to compete with. If we are not able to stand in the market place on equal or near equal terms with our competitors, we will have higher input costs. However, the policies we are pursuing, the tough line the Government are taking, will be seen to an even greater extent in the next 12 months.

We cannot get away from the fact that in the past number of years we have been tied to our EEC partners, and this year I was particularly delighted with the package the Minister for Agriculture was able to negotiate on behalf of our farmers. In the economic conditions we are in, that was a very good package and most farmers have seen it and accepted it as such.

Where are those farmers?

They are there. At another time they were in the streets to protest that their case had not been well presented. There is no fear that they will come into the streets on this occasion.

They cannot afford it.

Your spokesman was allowed to speak without interruption. Perhaps you would allow the Minister of State to do the same thing.

We could have managed plenty of interruptions but we are better behaved. I speak from the grassroots when I say that farmers are not always happy, but the majority of us acknowledge that the price agreement this year is the best that was available. Therefore, the majority of farmers have every confidence in this Government. Speaking as a Minister who hails from the west of Ireland I can say that I have a special understanding of how the disadvantaged areas scheme has helped the growth of agriculture in the areas covered by it. The scheme injects more than £36 million into these areas each year, and headage payments for all the country come to £103 million. By any standards this is a fantastic sum of money. It is a springboard from which farmers can increase their herds. I have no doubt that as a result we will have a sizeable increase in our national herd.

The £36 million injected by the disadvantaged areas scheme is equivalent to about 6,000 industrial wage packets Put in that context the scheme must constitute a considerable contribution to the local economy in these times of recession. Put another way, the benefits extend to a very large number of farmers and about 85,000 farm households in the disadvantaged areas.

These are substantial and widespread benefits whether taken on a regional or an individual basis. Yet they do mask some important figures. For example, the average sheep headage applicant is paid on only 50 ewes; the average cattle headage applicant is paid on only slightly over 14 livestock units; and the average beef cow applicant receives grants on only six cows. It is obvious from these figures that there must be scope in the disadvantaged areas for better use of the land available and a consequent growth in the number of cattle and sheep on that land. This will be impossible, of course, on the poorest of that land, and on the most efficient holdings only modest growth may be possible. But on all other holdings some growth in numbers can be and should be achieved.

While the disadvantaged area schemes were designed by the EEC essentially as income supports, farmers in these areas have, in common with farmers elsewhere in the State, the incentives to expand numbers which are provided by the EEC premium schemes for ewes, suckler cows and calves and also the calved heifer scheme. I would urge farmers in the west in particular to use the available grants to increase cattle and sheep numbers so as to benefit the economy of the areas concerned and of the entire country.

As Deputies are already aware, a comprehensive review of the internal and external boundaries of the disadvantaged areas is at present in progress. This involves a considerable volume of field work and the detailed analysis of socioeconomic data in respect of over 600 district electoral divisions and 10,000 townlands.

It will be necessary to await the outcome of the present boundary review before approaching the EEC authorities with any list of areas for designation as disadvantaged or reclassification as more severely handicapped. It will take some months yet before the review is completed, and I would not like to forecast at this stage how soon the question will be finalised by the Government or, eventually, by the EEC authorities. The extension of boundaries, if any, must, in the final analysis, be considered in the context of availability of Exchequer resources.

The suspension of grant aid for buildings under the farm modernisation scheme gives us an opportunity to review the scheme with a view to reintroducing as soon as possible a scheme which will be fully cost effective. This review is all the more timely when we look back and see the considerable amount of money which has been paid in grant aid since the scheme was introduced in 1974.

Up to the end of 1982 farmers had received £234 million in aid under the scheme, representing a total investment of £700 million. These are very considerable sums of money, and it behoves us to stand back and see if the money has been spent to the best advantage. The review is in progress and, while I do not wish to prejudge its findings, I am confident that one of its conclusions will be that there should be greater emphasis in the future on basic housing for livestock.

We all know that outwintering of livestock is still widely practiced. I understand that up to two million head of livestock have to endure the rigours of an Irish winter in the open. I do not have to remind the House of the diseconomies this entails for the farmer, both as regards loss of condition of the animals and damage to land through poaching — land which, in many cases, has been drained at considerable expense only to suffer damage because the farmer had neither housing nor a dry sheltered place in which to hold the cattle during the winter months.

If, as a result of this review the revised scheme which we hope to introduce in the autumn helps to solve this major problem of outwintering cattle, the pause in the operation of the farm modernisation scheme will turn out to the longterm benefit of Irish farmers.

The Minister has already dealt very fully with land policy. I would like to contribute some thoughts of my own and, perhaps, elaborate on some of the points made by him and, in particular, on some of the points made by Deputy Noonan. An aim I am particularly interested in is the creation of a new role and image for the Land Commission.

The Land Commission are one of our oldest State agencies, having been established in 1881 mainly to fix fair rents. As our Land Code developed the commission became the body responsible for dismantling the landlord system by the transfer of ownership of their holdings to the tenants by way of advances repayable over a long term. The Land Act, 1923, completed the transfer to owner occupation. By 1930, or thereabouts, land purchase activity — that is, transfer of ownership from landlords to tenants — was growing less important, and since then the main functions of the commission have been the acquisition of land for redistribution to smallholders.

One particular aspect of the Land Commission's activities in this area is worthy of attention. The powers of compulsory acquisition of land have been gradually widened down through the years until they are, in fact, now quite extensive. This has resulted in a significant erosion of landowners' rights for the common good. This is evidence that our people believe that the right to private property is not absolute but carries with it certain responsibilities. One of these is the obligation to ensure that land is worked as productively as possible. I will return to this point later.

I do not think anyone could deny that, given the limits within which they had to operate, the Land Commission have had an impressive record of performance. Their direct intervention in land activity has had a considerable impact in rural areas. The enlargements it provided were of vital importance in a great many cases in helping small farmers to stay on the land. The only real alternative for many of them would have been emigration. In such circumstances the policy of giving land to as many as possible, rather than giving enough to the few, was readily justifiable at the time.

However, despite the important influence they have had, it would seem now that this work of the Land Commission is making only a marginal impact on structural change. Their very achievements in establishing the owner-occupancy system have themselves led to a land tenure system which leaves us now with the lowest rate of land mobility in Europe, and we cannot escape from that.

For some time past there have been demands for a review of the Land Commission's activities. These demands are sparked by the recognition that agriculture plays a vital role in our economy, the land being our main natural resource. Agriculture will make its proper contribution only if every productive acre in the country is fully worked. It must be acknowledged that land policies have not been designed primarily to achieve that end.

Various studies have shown that there is a significant potential for growth in Irish agriculture, and that such growth as there has been is confined to particular categories of the farming population. It has been estimated that about one-third of our agricultural land is occupied by farms on which the household and labour situations make it unlikely that growth in output will take place. Structural conditions do affect the potential for growth — the better the conditions, the more likely is growth to occur.

It is clear from the debate on land matters that opinions vary as to what form future land policies should take: it would be difficult, indeed, to frame a perfect policy which would satisfy everyone. Nevertheless, we could all, I think, accept two fundamental precepts. One is that the primary objective must be the most efficient use of land, and the other is that the ownership and management of land need not necesarily coincide. To put it more simply, what we need is to increase our rate of land mobility so that as much as possible of the land at present under-used can be channelled into the management but not necessarily the ownership of people able and anxious to work it fully.

The amount of land which is being under-utilised, or in some cases actually neglected, is a significant proportion of the whole, possibly upwards of one-third of all our land. This presents us with a situation in which our most valuable asset is not being properly exploited, with a consequent loss to the economy as a whole. My aim is to create a climate in which those who cannot, or do not wish to, work their land fully will automatically and freely consider making it available to others eager and willing to do so.

In order to achieve an acceptable level of mobility we must look first at those areas in which there is already movement and seek to increase such movement. We can rule out the open market straight away. The amount involved in open market transactions is very small. We must, therefore, consider the other main causes of movement: transfers within families on the one hand, and land let on the 11-month system on the other.

Inheritance accounts for 80 per cent of all land transfers. It is therefore an obvious area where mobility could be greatly increased. However, the opportunities for direct State intervention in matters of inheritance are, I believe, quite limited. Family matters are private and in my view should remain so.

In recent years there has been a noticeable trend towards earlier transfer of farms but, unfortunatley, this trend has been largely confined to farms which are already being worked well anyway. There are still too many farmers where transfer is delayed too long. I believe that farmers and farming bodies generally should themselves strive to promote a more enlightened approach to earlier inheritance. Should we not now have a conscious effort to promote the concept of gradual transfers, mentioned already by the Minister, starting with shared management responsibility, going on to partnership, and eventually full transfer?

Mention of shared management responsibility leads me back to what I have already said on the necessity of divorcing the management of land from its actual ownership. This can be achieved through leasing — a concept in which I have a great interest and which I have been advocating actively for some time. Up to now it would be true to say that the use and management of land has meant ownership of it. This situation was the almost automatic consequence of the way our land tenure system developed. My ambition is to break out of this mould so that progressive energetic farmers anxious to increase their land holding and others keen to enter farming will have a means of doing so.

The Minister has already indicated the programme we have in mind to promote and encourage leasing. This programme will be implemented by the Land Commission as part of the new role we have envisaged for them.

Even if the only result of a system of medium-term leasing were the elimination of 11-month lettings, that in itself would more than justify it. It is a bad system which has rightly been blamed for a lot of our ills, even though personal necessity — illness, widowhood and so on — can justify a certain amount of it. A general switch away from seasonal lettings to longer term arrangements would be greatly to our advantage.

Despite my optimism, however, I am at the same time conscious that there is no quick road to success. I do not think that there will be any shortage of lessees. The real task will be to persuade potential lessors to make their lands available. It is perfectly natural that the older and more conservative element in the farming community will have doubts and fears about opting for something that will appear strange and novel to them. Gentle persuasion will be the best way to convince them that it is in their interest, as well as in the national interest, to lease.

I should like to take this opportunity to reply to Deputy Noonan and to allay some of the fears and misgivings he has about the future policy of the Government. I was dumbfounded to hear a man of the calibre of Deputy Noonan talk about a return to landlordism. I consider that an emotional issue and if I did not know him as well as I do I would say he was using that phrase as a smokescreen.

It has been well known for at least 15 years that there was a crying need for more mobility on the land. There were White Papers, Green Papers, consultative committees and inter-departmental committees of one kind or another. At this stage we have enough of them. Everybody seems to know what is wanted, but the time has come for action. The only black mark against the Government apparently is that we took the bull by the horns and decided as a matter of top priority that it was necessary to bring in a new, imaginative land reform policy. I heard Deputy Noonan reading out a list of the items in the White Paper issued by his Government, but they are not new either. I do not profess to be the first person who thought of land leasing but I am the first actively to do something about it. I can honestly say that there was more activity in the Land Commission in the last six months than there had been for the previous six years. We have gone past the crossroads. The time for talk is over. We are all well aware of the problems that lie ahead. No single approach in a land reform policy will solve the problem. It involves a multiplicity of factors and I am probably justified in saying that as time goes on certain changes will be necessary to meet the needs of the time. We must have an elastic type policy which will take note of trends in the future.

I want to return to the question of landlordism. A highly thought of political party with a rural base should not use this term. Deputy Noonan went so far as to suggest that we had discarded the acquisition powers built up by the Land Commission over the years. I wish to state categorically that that is not the case. We have those powers and will use them where necessary. They are important powers which have been acquired at considerable trouble over the years and are a vital part of our armoury to control future land sales.

In the last three or four years, as a public representative in East Galway, I remember calling at two or three of the local Land Commission offices. At that time we were supposed to have a policy of land acquisition by the Land Commission. However, over the last number of years only very small acreages were bought, and I defy any Deputy to contradict that. There were different Governments involved, so it was a general policy. We were saying one thing and meaning another. We were supposed to be buying land, but the policy was extremely selective in the sense that very few estates were bought. To put Deputy Noonan's mind at ease, the figures for the past three years show that 20 per cent of all the land purchased has been bought by people who did not own one acre of land before that. They were newcomers to farming. Where were the custodians of the small farmers then? That is why the Government are ensuring that there is an orderly direction in land sales.

I have asked the Land Commission to actively promote the concept of group purchase, something which has not been done to any degree here. In the last month or so since this policy has been advocated I am pleased to say that it is working reasonably well. Anybody who understands the problems of land sales will know that, no matter what programme you have, it will not be 100 per cent successful. However the Land Commission will give every help possible to local smallholders who group together. It is acknowledged that the inspectors in the Land Commission are the experts when it comes to land and land division. Many groups have to come to the Land Commission in recent times and have got good help. We will continue to do that. We will help with the division of land that farmers buy jointly and all that kind of thing. I do not want to give the impression that this will cure all the ills, not at all, but there is no intention on the part of this Government to do away with the acquisition powers the Land Commission have.

I cannot see how it could be construed that we are reverting to the landlord system in the policies I have advocated. Deputy Noonan said that one of the policy matters included in the White Paper was that notification should be given to the Land Commission of all intending sales over £5 valuation. I have gone on record as saying that I see nothing at all wrong with that; but I must point out, too, that the PLV system has been declared unconstitutional and that has be ironed out in the Supreme Court. Those are the small and not so small things a Government have to take note of.

It is vitally important that the concept of land leasing gets off the ground. This is not the first time this country has heard about land leasing, but if it does not work this time it is the last time we will hear about it. It was tried ten years ago on the basis of a 12-year lease. That was too great a progression from an 11-months system. I must confess I always had doubts about that. It was beyond the ability of most Irish farmers to adjust to that. If at that time we had talked about three, four, five or seven years, we would have been more likely to succeed. Over the years every Government knew that the tenants should have certain rights.

The reason the 11 months system was so popular was that the tenant had no right at the end of it — he just had to get out. There were not many farmers in Ireland who were willing to allow a tenant in if they thought they could not get him out. Why Deputy Noonan's Government did not see the need for this, considering that they were so long in power, I cannot understand. Anybody who would stand up here and condemn me for bringing this legislation to the House is very misinformed about it, or is mischievous. It is a very important step forward as far as the land reform policy is concerned.

Deputy Noonan said that from the point of view of what the field staff of the Land Commission might be doing there would be great note taken of the serious problems we have with fragmented holdings all over rural Ireland. He said that was part and parcel of the Land Commission activity at all times. Yes, but to a very limited degree and it was only where the Land Commission had an estate that they rearranged land surrounding it before they left the area. In a part of the country where there was no land held by the Land Commission they did not rearrange any holdings. The fragmentation we have certainly leads to lesser production, for obvious reasons. To every farmer in Ireland and his neighbour who want to voluntarily rearrange their land I will give the undertaking here this evening that if they contact the Land Commission they will get every possible assistance. I consider that to be a very important step forward.

Contrary to what Deputy Noonan has said, the policies I am pursuing are completely geared towards the smaller farmer and as the years go by that will be positively shown. I come from a small farming background myself. I quite understand the problems. Rather than being the big farmers' party, as Deputy Noonan would have us believe, we are quite the contrary. Time will show that, Fianna Fáil over the years were afraid to grasp the nettle. They talked about it, but they were afraid to do anything about it. That is the worst form of political leadership. They have now taken note of the fact that this Government mean business, that there is a land reform policy and we are committed to it.

There is quite an air of confidence among the farming community. The live cattle trade is particularly good at the moment. The price of sheep is extremely good. Livestock farmers are quite happy with the prices they are getting at the marts. One has to be worried by the fact that there are so many meat factories closed at present. There are many reasons for this. The variable premium and the impasse with the British Minister for Agriculture is something that needs to be ironed out as soon as possible. I have no doubt that the policy our Minister is pursuing and the pressure he is putting on his EEC colleagues will bear fruit. There is a place in this country for a good live cattle trade and a good dead meat trade. It is important for the employment potential of the country that we kill as many cattle as we can, but nevertheless I believe it is also very important to have a good live cattle trade. With good healthy competition between the dead meat trade and the live cattle trade there will always be a reasonable floor price for cattle, and that is what this country needs.

I want to refer now for a moment to the question of aid to the small farmers in the west and the position we now find ourselves in with the western package. This package was organised in Brussels some years ago and parts of it for some strange reason have never worked their way down to farming level. I have taken a deep interest in this since coming into the Department and it is important I should explain a number of things to the House. Despite all the talk of the suspension of the farm modernisation scheme, under certain conditions there are substantial grants available under the western package for the construction of farm buildings and so on. The scheme I inherited was not particularly tailor-made for the kind of farmers it was intended to help. There were a number of problems and these have to be brought back to Brussels now to be renegotiated, but there were things the Government could and should have done. There was a stipulation that a farmer over 55 years of age was not eligible. This was a deterring factor. I took note of that and a few weeks ago I introduced a management arrangement heretofore involved in the farm modernisation scheme and now that particular partnership applies to the western package.

There are two other important aspects which need looking at very urgently. Part of the financial arrangement was a calf to beef system and at first glance it appeared to be a suitable arrangement. However, it did not take note of the special status store cattle have in the north-west where people for the most part keep them on to factory weight. The scheme never got off the ground and the time has now come for a reappraisal of it. The subsidy on electricity installation has gone quite well and the contributions to the group water schemes have been impressive. There are other aspects which have been negotiated in the past two or three years which need close scrutiny because it is vitally important for the smaller farmer that there should be some type of pre-development scheme. This scheme is more or less tailored for that. There are several small farmers who will never achieve a comparable income. They are not trained for anything but farming and their lot could be bettered by imaginative help.

These are some of the things at which the Government are looking really seriously. We have made quite a good start in the face of the budgetary problems. The incentives are there — the £70 calved heifer grant and so on — and I believe farmers will accept that this Government are quite serious about increasing the national herd. As an end result we shall have a greater income for our farmers and more people at work. I am delighted to have had an opportunity to explain in reasonable details what we are doing on the land and also what we are not doing and what we do not propose to do, as outlined by Deputy Noonan, and I hope that makes the position quite clear.

I welcome the opportunity to debate this Estimate. The agricultural industry is by far the nation's greatest industry in size and in contribution to the economy. Yesterday we were told there are 120,000 full-time farmers. There are a further 20,000 part-time farmers. A former Taoiseach claimed that 25,000 were employed in the sugar industry, the basis of which must be the 10,000 sugar beet growers. The agricultural industry is a massive potential employer. Wexford is one of the most intensive agricultural counties. In that county it is claimed that two out of every three of the working population are involved directly or indirectly in agriculture. The volume of exports amounts to 30 per cent of the total value of all exports. Because of the lesser import input into agriculture the overall value to the economy is almost 60 per cent of the total profit from exports.

The major contribution made by agriculture is obviously not fully recognised. The vast potential of the industry as an exporter and as an employer is certainly not fully recognised. Is this because the industry is under attack from other sectors of the economy, from the socialist element within the present Government and from The Workers Party? The cry of the Labour Party and The Workers' Party for the nationalisation of the land is short-sighted, stupid and greedy. When one looks at our State and semi-State companies and their contribution the very thought of the nationalisation of the land is frightening.

Farming is a difficult area fully to understand unless one is born and reared in it. Can it be that it is not realised that the farmer's day may begin at 3 a.m. and may not end until 11 p.m.? I would not dare suggest this is the case every day thoughout the entire year, but it is well-known that the farming family may put in anything up to 100 hours per week. How can that be compared with the average civil servant, if there is such a thing, with every element of his or her livelihood protected against attack, trivial or otherwise, living in a sugar-coated environment? How can that be compared to any PAYE workers on a 40-hour week?

I would neither suggest nor ask for special treatment for farmers but the special position of agriculture should be recognised. Are the Government prepared to sit back and allow a noisy minority dictate a policy of disaster for our agriculture and for our national economy? The Minister should recognise the value of the soil. It is our greatest natural asset. He should recognise that if properly supported it could make an even greater contribution to our economy. We are in recessionary times. Every day industries are closing down with massive redundancies and all sorts of resultant problems. Is there a case for the promotion of agriculture to help us out of our difficulties? I believe we can lessen to a large degree the dreadful effects of the recession by recognising, first of all, that agriculture has the capacity to play a greater role and, secondly, by encouraging its potential.

Agriculture has changed dramatically since we entered the EEC. Our investment and input have increased greatly. Farming has become more specialised at the expenses of the mixed farming of a few years ago, when the old belief of having all your eggs in one basket was the policy of the day. Now instead of having a few hens, pigs, cows, beef cattle and a few acres of tillage, farmers are concentrating on two lines possibly but in most cases just one. This is a desirable trend. Dairying has become a very specialised area and the modern milking parlour is a very sophisticated technological unit. The modern farmer will devote all his energies and research to developing one enterprise rather than spreading his time over six or seven areas.

The principles of continental farming are spreading into this country, and so too must the continental ideas of taxation, farm aids, development and farm education policies be considered. Our agricultural ideas are outdated. Our entry into the EEC and subsequent participation in it never yielded what we had expected. Perhaps we expected too much. Perhaps we did not prepare ourselves sufficiently to take maximum benefit from it. Perhaps the Government of the day saw that the farmer in developing more was spending more money and therefore assumed that he was now well off and that the Government should cream off for themselves what probably should have gone back to the farmer and into the industry. This type of activity stifled progress and stunted growth, because the money that would have been available for more development was redirected in the main into the non-productive sector.

We must set out a clear policy on agriculture that will ensure that the maximum benefit is got from every acre of land within this nation, that all products are marketed, that the maximum number of jobs are created related to agriculture and that taxation will not interfere with extra or increased production or create an atmosphere of depression in farming such as exists today. This policy must be based on the fact that agriculture is still, or at least can be, the backbone of our economy and on the belief that when agriculture is down so too is the rest of the country, and this certainly is the case now.

The basis for success in any project or industry is a good education. It is well known that farming and agriculture have had less opportunity of education than any other sector. In County Wexford alone in the last few years there were three applicants for a year's residential agricultural course for every one farmer placed. Compare that to any other sector, to pupils for universities, regional colleges or AnCO, and remember that I am talking about a one-year course for farming. Sufficient places are not available for interested young farmers. What do they do in that case? They leave school, a school which has had no agricultural subject in its curriculum. Even though most schools today carry wide curricula of subjects to accommodate almost every trade, agricultural education is completely forgotten about in our educational institutions. Believe it or not, 20 per cent of our farmers have a leaving certificate and only 25 per cent of our young farmers have agricultural training of any description. In the main those two figures are one and the same. The Department of Education and the Department of Agriculture should be ashamed of themselves in this day and age for their gross neglect in this area. I suggest that secondary schools should immediately establish a precedent, particularly in rural areas, whereby agricultural science would be taught as a subject for the intermediate and leaving certificates. Then sufficient space should be provided for all young farmers for at least a year's residential course in our agricultural colleges.

I was interested to hear the Minister for Agriculture expounding more or less the same idea. He told us that there is an ongoing building programme within the Department of Agriculture to provide more space in this regard, but I fail to see any comment in that area in regard to any money being put forward, and I read through his speech afterwards. It is all right to talk about providing extra space in colleges, but if you do not provide the money you do not get the space. Expounding ideas is grand, but if you do not put up the money it is just not on. I ask the Minister of State, Deputy Hegarty, to ensure that the Minister, Deputy Deasy, in his reply tomorrow evening will tell us what the exact situation is. If he believes in this as strongly, as he said he did this evening, is he prepared to put his money where his mouth is? I call for an increase in the amount of space available in colleges for these young farmers and that will necessitate the provision of new colleges, which should be located strategically rather than politically. We in Wexford would welcome such a college because it is well known and accepted generally that we are one of the better agricultural counties in that per head of population we produce more agricultural products than any other county. Because this is so I believe that the young farmer would have a great deal to learn from a year's residential course in County Wexford. I ask the Minister to keep that in mind if he has any notion of providing this extra space.

The educational base of a good, sound knowledge of agricultural science in the secondary schools and a year's residential course should be a minimum base for our young farmers. This base should be followed up with these excellent 100-hour courses which have been provided over the past few years and on which I can only compliment the Department of Agriculture. Specialist courses should then be provided for the young farmers to go on to from there. Farming then would progress and prosper. As I have said, our farming population have been completely forgotten when it comes to education. It is a shame that the present Government and past Governments did not recognise this; or, if they recognised it, that they did not do something about it.

Of course, there is little advantage in preparing our young people for entry into farming unless we ensure that the land will be made available to them. I am told that the average age of an Irish farmer is 50 and that of his European counterpart is 38. The reason for this is late inheritance. In Ireland the average age of a farmer who inherits land is 40 years and, by coincidence, the average age for a farmer to marry is 40 years also. The inheritance problem is historic because of what happened in the past under British rule and landlordism, and I think everyone here will accept that. An Irish person would prefer to part with his right hand rather than with land. I realise that attitudes will have to be changed in any future policy. Everyone accepts that a retirement plan must be introduced immediately giving sufficient incentive to older farmers to retire in order to make land available for the younger generation. The Government made a dreadful decision to abolish the retirement scheme for farmers even though only 607 farmers participated in the scheme. I was interested to note in the speech of the Minister tonight that he said fewer than 600 farmers had participated in the scheme: yet in answer to a question today I told 607 farmers had participated. We will not fight over the number but it shows that even the Department are not sure of what is happening.

I ask the Minister to reintroduce the retirement scheme and to provide an incentive in the form of an attractive pension for the lessor. If this is done we may be able to remedy the situation. As the Minister of State, Deputy Connaughton, pointed out, it will not be easy, and we all accept that. I admit that many of his ideas are quite good but I think he is taking the whole business too easily and when he gets out of the world of fantasy he will discover the real difficulties that have to be tackled. It would have been far better had the Government allowed the scheme to continue. They could have carried out a more effective review and would have been able to implement a better policy. As the Minister of State has pointed out, the Government agree with the scheme in principle but disagree with the way it worked. So do we all, but nevertheless 607 farmers participated and that is better than none.

Transfers from father to son must be made more attractive. Any inheritance tax must be examined carefully to ensure that such transfers are not discouraged. The Workers' Party, the Labour Party and elements in the Fine Gael Party are anxious to impose taxes on the transfer of land from father to son or on any transfer. On the other hand, the Labour Party, and more particularly The Workers' Party, cry out that they want to see agriculture prosper and extra jobs created within the industry. They want the wealth of agriculture to be spread around, but their policies will kill the industry. This type of hypocrisy is dangerous and these people would do well to look before they leap. Their policy would put agriculture on a disaster course and would destroy every farming family.

The Minister of State, Deputy Connaughton, spoke mainly about the Land Commission and land policy. He tried to maintain that Fianna Fáil had not shown any interest in the matter. That is not the case. We prepared a White Paper, but I do not intend to engage in party political haggling at this stage because it does not benefit anyone. We are interested in agriculture and we will put forward our own ideas. If they are good they should be accepted irrespective of their source. I share the view that any land leasing programme which is good for agriculture will also benefit the economy. This is what we should be interested in and we should forget political haggling.

In my opinion the Land Commission have been a failure. I listened with interest to the Minister of State who said they were very successful, but a few years ago I heard him say the exact opposite. The Land Commission have not been successful because they distributed land to people who in the opinion of most had no right whatever to get the land and who made no use of it. I accept that the commission made some good decisions and did valuable work, but in the overall context they were a failure. For that reason I welcome any change to improve the commission.

I agree farmers should have some qualification before getting land. One of the main qualifications should be that a person should have been engaged in agriculture in some way or other. It may be claimed that a person should have an academic qualification in agriculture, but I do not necessarily agree with this. A farmer's son may not have had the opportunity to attend college or do the 100-hour course because he may have had to stay on the farm. That should not militate against him. I know of people who are finding it difficult to get land. Some days ago I asked if the Government proposed to allow landless people to qualify for land. I regard this as absolutely essential. In his answer, vague though it was, the Minister was inclined to agree this would be the case. An instance springs to mind of a person in my county who for about 30 years let an area up to 80 acres on the 11-months system. He had been applying to the Land Commission for the past 20 years for land but when land in his area was divided he was ignored. That was very bad business, particularly when two people from Dublin with no agricultural background, training or expertise got the land. Such decisions brings the Land Commission into disrepute.

Speculators must be kept out at all costs. The land of Ireland is for the farmers of Ireland. It should not be given to people who are in the business of buying and selling when it suits in order to make a profit. That must be resisted at all costs. There has been much talk about the 11-months system. Deputy Tomás Mac Giolla, leader of The Workers' Party, asked today if the Minister would bring forward legislation to prevent the 11-months system. It demonstrates how little The Workers' Party know about land when they ask for this. What would happen to the land which is already let on the 11-months system if the system were abolished? We do not have a leasing policy. Are we to leave it idle or do The Workers' Party believe that land becomes richer when not being worked? I appeal to the Government to resist this type of stupid suggestion.

I agree that we must look at long term leasing because the 11-months system is not a good one and must be phased out parallel to bringing in a leasing system. This must be done as soon as possible. The 11-months system allows a person to make the best he can out of a parcel of land for a year, although he will not leave it in good fertile condition for the person who follows. We cannot get rid of the 11-months system without bringing in a leasing policy.

I would like to refer to the farm modernisation scheme. I repeat that I am disgusted at the fact that the Government saw fit to withdraw it. The Minister said today:

The suspension of grant aid for buildings under the farm modernisation scheme gives us an opportunity to review the scheme with a view to reintroducing, as soon as possible, a scheme which will be fully cost effective.

Those are laudable words but removing a scheme in order to review it is hardly a good policy. This is a penny wise and pound foolish scheme. It shows very little commitment by the Government to agriculture. It was an insult to our farmers to withdraw the farm modernisation scheme. It is a bigger insult to those participating in it that some of them had their work completed and were waiting departmental approval. Those farmers may have applied before Christmas to have the inspector call and he had not called by 10 February. The result is that those farmers lost their grant. They did everything they were asked to do but they were denied their grant. Such farmers invested heavily because they knew their investments would be supplemented by the Government. The Government reneged on their promise. I would like to know how the Government would feel about this if some people took them to court over not getting their grants. Oral approval was given by departmental inspectors in some instances but because of a technicality the Government refused to pay the money. I know that some people are thinking of taking the Government to court over this matter.

The Minister of State in the House at the moment should look very seriously at the people who had their work completed but for reasons best known to the Department were not given their grants. I hope the Minister will take this matter up immediately. I am sure it is well known that development in farmyards is at a standstill compared with this time last year. I am speaking from my experience on Wexford County Committee of Agriculture when I say that a large number of small firms are now out of business because of lack of work of this nature. What about the farmer who hoped to do a lot of work in his farmyard with departmental advice and who now finds himself without any winter houses for his cattle? Is he forgotten about? It is bad management to suspend a scheme in the middle of a plan. I believe this is just a sop to the people in the Government who do not care anything about farming. I hope the farm modernisation scheme will be reintroduced in the near future.

The mobile equipment grants have been discontinued but there was no reference to this in the speech of the Minister, or of the Minister of State who spoke as though the mobile equipment grant was not of any significance. This grant ensured, to a large degree, that farmers always had reasonable machinery to do their work. I hope the mobile equipment grant will be reintroduced when the farm modernisation scheme is reintroduced.

I would like to refer to the agricultural contractual scene at the moment. In the Minister's constituency as well as in Wexford the contractor is traditional and about 80 per cent of farmers depend on agricultural contractors for most of their work. The silage making machinery is run down. The Wexford County Committee of Agriculture in a deputation to the Minister last year asked for support for those people to enable silage to be cut in time in order to ensure that it is at its best. What happened? The mobile equipment grant, the only support there for those people, was taken from them. That is an insult to those contractors as well as to our farmers.

The charges imposed by the Government for farm visits is one of the most evil activities engaged in by the Government. I do not see any necessity for this. The amount of money which the Government have budgeted for, approximately £1.5 million, for this will not be used because farmers will now shy away from these people. About 30 per cent of people have not been visited by agricultural instructors and those are the very people we hoped those instructors would visit. Those people now have the feeling that charges will be imposed for every visit. I acknowledge the fact that the Minister of State is shaking his head but I believe this is the thin edge of the wedge and that the £20 charge for the farm modernisation scheme is only the beginning. Will the Minister of State guarantee that no charges will be made at any time during the Coalition Government's period in Government? I would like to have that commitment from the Minister.

I would like to talk about investment in the agricultural scene. I agree whole-heartedly with the Minister of State, Deputy Connaughton, that inflation is one of our major problems. I would not shy away from that fact and I am sure it was an oversight that Deputy Noonan did not mention it. Inflation must be controlled if farmers are to succeed but, in line with the curtailment of inflation, we should have fixed interest rates. It will be remembered that in 1977/78 the ACC and the banks could not give enough money to farmers; they almost visited the farmers on his property asking him to take money. Since then interest rates have jumped from 13 per cent to 20 per cent. perhaps even a little more, even though they have dropped slightly now. This meant that a farmer, having paid two years repayments, found himself owing approximately 20 per cent more than he had borrowed originally. This cannot be allowed to continue. We must take a stiffer line with the banks and the ACC. If they are so anxious to lend money they must share the risk but they do not. We read recently of how the banks, but particularly the ACC, were about to sell out a farmer in County Meath. If they succeed in doing so that will be the beginning of an enormous amount of land coming up for sale. Again, that is bad business. It is not because farmers are inefficient or that they spent foolishly or unwisely. It simply was that interest rates jumped out of all proportion and farmers were caught.

I should like to know whether the Minister or his Department have contacted the banks or the ACC telling them to lay off, reminding them of their original contracts with farmers and their encouragement of farmers to borrow. I am sure the Minister is well aware of the encouragement they gave farmers to borrow. But now, when farmers are experiencing difficulty, most definitely they are not going to be caught. The banks and the ACC must be made share the risk. If the banks and the ACC pull with farmers, are patient with them, then we can emerge from this situation successfully. It would mean that those farmers in particular could ride out the recession and difficulties in which they now find themselves, when they would be back on an even keel.

There is as much necessity now as ever for investment in agriculture. We are all aware that anybody involved in farming to a large extent who goes to the banks for money for fertiliser, lime or to buy extra stock will be told it is just not available; one will be shown the door fairly quickly. When one compares that with the situation that obtained in 1977 it is incredible. The Government have a responsibility to insist that the national herd be increased at present. That is why I would request them to examine the scheme Fianna Fáil were about to introduce before they left office. If we are as interested as we claim to be, then we should be endeavouring to increase the national herd. The interest subsidy schemes introduced a few years ago have not been as successful as they might. Indeed the very people who most needed interest subsidies have had to go without. I appeal to the Minister to get the banks and the ACC to cut out all this red tape, to request his Department to play a more active role in insisting that these schemes are dealt with immediately.

I should like to turn now to taxation. The present taxation system is accepted by farmers as being a disincentive. That is terribly wrong. A desirable taxation policy should be one which would have built-in incentives to increase production which, in itself, would be better for our economy because there would then be more money in circulation and extra jobs created. Let us not, by our taxation policies, play into the hands of those who have cried "tax the farmers" for too long. Let us ensure that we are fair, that farmers will be asked to pay their fair share but, in so doing, ensure that there is an incentive for them to produce more. Such a policy is non-existent at present.

With regard to food imports I was interested to hear the Minister point out that 4 per cent only of our imports constituted potatoes and other vegetables and that, for that reason, he seemed to cast aside the fact that this was important. Every percentage is important, whether it be 1 per cent or even .05 per cent. If we can change that then we shall have done a good day's work. We can endeavour to improve the other 96 per cent. But we should not let the Minister or his officials detract attention from the fact that this 4 per cent is vitally important. I am in full agreement with present efforts with regard to import substitution. In Inch the other day at the opening of the yoghurt plant I heard that 20 per cent of the yoghurt made there is imported, 20 per cent of the cost of a carton of yoghurt is imported in packaging, in bacteria and in strawberries. Certainly there is no good reason we cannot produce the strawberries. As the House will be aware I live in a strawberry county. With the help of God and somewhat better weather I may be able to produce a few punnets here next week. But we can produce the strawberries; it is a question of getting the right type.

In this connection I understand that An Foras Talúntais are at present researching the cultivation of a certain type of strawberry. I would ask the Minister to ensure that that strain of strawberry is produced fast so that it can be grown at home. There is no reason why every ingredient of that carton of yoghurt cannot be manufactured here. With regard to bacteria, I should say that, having milked cows for 16 years, I have bred enough bacteria in my time and I am certain it can be bred within the country. I would ask the Minister's officials to accommodate this simple request. With regard to cartons, I believe that most milk today is provided in cartons, all of which are brought in from other countries. Surely there is good reason for the Departments of Agriculture and Industry and Energy to get together and discuss this whole business of the manufacture of necessary cartons or packaging here at home. Surely there are jobs to be had there also. The Minister admitted here today that he was concerned only with production. That is not sufficient in this day and age. He must also be interested in marketing and all the other facets which I have mentioned. Will he comment on that suggestion and get together with the Department of Industry and Energy to accommodate my request?

On ACOT and the county committees of agriculture I should like to say that ACOT have not been as successful as they should have been. They are on a go-slow because of the fact that the staff scheme has not been introduced. I believe ACOT have been reasonably successful, but they are becoming very like the health boards. To get to the chief executive you would almost want a machine gun. You have to go through about ten doors. That is not what the farmers of Ireland want. They want ACOT personnel to be out in the fields with them, and easily accessible. We are on the wrong path when we build up a bureaucratic barrier between ACOT and the farmers.

I learned recently that the ACOT personnel are in the office three days a week, not because they have so much paper work to do, even though they have far too much of it to do, but because of the mileage limit imposed on them by the Government. That is ridiculous. Anybody who knows anything about farming, knows that the place for the ACOT adviser, with his experience and expertise, is in the field advising the farmer, instead of in an office. In other words, he is giving two-fifths of his time to the business to which he should be giving all his time. We are educating people to talk to farmers and to advise them. At the same time, we are preventing them from doing so. If we are serious about farming, these people should be on the road five days a week, or four days and allow one day for the paper work.

I welcome the fact that the home economics colleges are being reopened next September. This was a wise decision on the part of the Government. It was probably a reaction to the enormous pressure from Fianna Fáil and from all the people who use or will use these colleges. They are of tremendous benefit to farming. I am delighted that the Government have taken this decision. I hope they have not been given a reprieve for a year only. I hope they will continue on indefinitely because of the contribution they have made to agriculture.

The poor law valuation system was mentioned by the Minister of State, Deputy Connaughton. I want to ask him, if his Government are appealing it, and I believe they are, when will the court case be held? Many items are still dependent on the poor law valuation. It is imperative that a decision be made one way or the other. It has been suggested that the Government are dragging their feet on this. It is well known that if this goes an alternative system will have to replace it. I would like to ask when this will be appealed. When will the court case be held? I should like the Minister to tell us one way or the other.

I want to mention briefly the activities in the House over the past few weeks with regard to Question Time. This also relates to Estimates. Question Time was for the benefit of all Members of the House. When answers were given, Deputies could ask supplementary questions in the hope of receiving answers. I am not saying anything to you, a Cheann Comhairle. I believe you are as fair as is allowed, let us say. It is my firm belief that, from the answers the Minister of State, Deputy Connaughton, and the Minister, Deputy Deasy, have been giving us, we would get just as much information if we put down a written question for reply. We get no answers whatever to our supplementary questions.

I am not sure why that is so. Is it because they do not have a knowledge of the subject or are anxious to make a farce of Question Time? Irrespective of the reason they should come clean. They should bring in their officials to advise them and we will give them time to consult so that they can give us answers to our supplementary questions. Questions Time as it operates at present is a farce and if there is some indignation, confusion or frustration on this side of the House it is because we are not getting proper answers to our supplementary questions. It would be preferable if the Minister admitted that he does not know his subject and for that reason is not able to answer our questions. The Minister of State, Deputy Hegarty, has not been in the House to reply to our supplementary questions but because of his experience in agriculture I am sure he would not refuse to answer. The Minister of State should convey my sentiments to the Minister and the Minister of State, Deputy Connaughton, who have not answered our questions to date. We will allow them to consult their officials if it means that we will get proper answers. We will be patient with them. Our questions are put for the benefit of farmers.

Farmers will respond to a Government commitment. They have always done so and will rise to the occasion again if the Government show that they are committed to helping agriculture.

I shall try to confine my contribution and endeavour not to repeat the points made by other speakers except to identify the areas of agreement. It is strange that those of us who have contributed or are waiting to do so on this Estimate, while we are members of parties who are in opposition to each other, probably all belong to the same farming organisation. I am a member of the IFA and I sat on the national executive of Macra Na Feirme with Deputy Noonan, the Opposition Spokesman on Agriculture, for a number of years and there was no deep ideological difference then between the way we looked at economic factors. I do not believe there is such a difference today and yet we can get involved in very heated arguments in the House. I wonder if that is the reason why there are so many difficulties in agriculture here. Is that the reason why agriculture is not at a more advanced stage, further down the road towards the ultimate in efficiency, competitiveness and giving good quality and service to the country?

I am sure that if it was possible to gather together the volumes that have been spoken on the subject of agriculture in this House it would be an impressive sight. The one topic that would dominate those volumes would be the praise spoken about the industry, those engaged in it, the hopes that those involved would be able to continue in it as their parents had and would enjoy a standard of living equal to that of any other section of the community. On the Government side down through the years Ministers have read scripts justifying existing policies. There is no doubt that months earlier when they were in Opposition those Ministers would have condemned those policies as being inadequate. Through the years Opposition Members have attacked the systems they left behind them. I do not know what to say about all this. Those engaged in the industry are no better or worse than any other sector; they are no better than those engaged in industry or the professions. Their performance has not been great over the years and I do not believe that is because there is something genetically wrong with our farmers. They are the brothers of the multi-millionaires in the United States and the cousins of the people running the mightiest democracy in the world, people who have been extremely successful. Yet they have not made a good job of it at home. Irish farmers are as good as the economic environment in which they operate and they are just as good as the markets in which they have to sell. Their competitiveness has to be compared with that of the people who sell on those markets and who are taking an increasing share of them.

I do not think any Deputy acknowledged the importance of outside factors and influences on the welfare of the agricultural industry. Somebody said we did not reap the kind of benefits from the EEC we should have reaped. I am sure many people made wrong projections about the conditions in which Irish agriculture would operate. Over the past few years developments in agriculture in this country have been influenced by decisions made inside and outside the country. We have not assessed our attitude to the Common Agricultural Policy. Every politician wants to defend that policy. While we may allow for changes, we want the CAP to remain because it is the cornerstone on which the Community is built. It is the only fully developed policy in the EEC.

We would welcome some changes in that policy which would be to the benefit of agriculture. We support the three main factors of the Common Agricultural Policy — the free market, financial solidarity and, above all, Community preference. Nevertheless we have to recognise that while we supported the Common Agricultural Policy in recent years our farmers did not do very well in real terms. Their incomes are only 85 per cent of what they were in 1977. The British Government do not support the Common Agricultural Policy and it is interesting to note that British farmers achieved better incomes than Irish farmers. They have improved their position from something like 60 per cent self-sufficiency in food to 85 per cent. Last year when Irish farmers were not able to improve their position, British farmers enjoyed an increase in income of between 30 per cent and 40 per cent. This is happening under the Common Agricultural Policy under which we operate.

We have to ask ourselves if the Common Agricultural Policy suits us. Every year great play is made of the Minister for Agriculture going to Brussels and fighting for Irish farmers — we always underline fighting the British. This is a great selling point which generates coverage in the media and gives a wide sector of the population something to identify with. We should be more constructive. Others are fighting for improved agricultural prices also. If we were not a member of the Community for the past four or five years the rate of price increases would probably be the same. Our influence at the bargaining table has not been that important. We know that other governments held out for the price increases that were given.

We would break the European budget ten times over before we would solve our agricultural problems with increased prices. Moderate climate crops — milk, beef, sugar beet and cereal — are over-produced in the Community at present. When we go to Europe and fight for increased prices we should remember that for every pound we are fighting for for the average Irish farmer we are fighting for £10 for the average farmer in the Netherlands or Britain. We are making it more attractive for them to produce vast quantities from a far stronger foundation and wider basis. They will produce the quantities of food that will create difficulties not only in the European markets but in the world markets. That is the reality. The capacity of European farmers to produce is without limit. What factors will influence the point at which we stop producing? This is something we have to face up to. There is very little likelihood that economic conditions will become so bright that we will have rapidly increasing incomes in the industrial and other sectors and people will be drawn from agriculture. That is not likely to happen.

We are rapidly running into a situation where we will have to demand a vastly increased budget to finance the extra production, we will have to reduce prices so that farmers will have a lesser return, or we will have to limit the amount we produce. If we do that we will be continuing what we have been doing for the last 50 years — expressing pious hopes about the things we would like to see happen rather than facing the reality of what we know is likely to happen and planning to be in the most advantageous position possible as time goes on.

We will not do any good for agriculture by refusing to acknowledge the realities and we will not solve the problem of farm incomes by continuously demanding higher prices and getting them. We have to recognise the difficulties in which the EEC finds itself and seek to negotiate by being as co-operative as possible while pointing out the special situation of our economy and our agricultural industry. Our partners in Europe will recognise our difficulties. They are always ready to recognise the difficulties of a small economy which joined the community at a time when the greater benefits of the Common Agricultural Policy had gone to farmers in other countries and enabled them to build the strong foundation on which they can go on producing today.

I have nothing against quotas or quantums provided that they are applied to the Dutch, the British and the large efficient producers. I would welcome an inspection of the amount of cereals being imported into the Community, but am not absolutely certain that in reducing imports of what are called cereal substitutes, or foodstuffs of one sort or another, it is the less profitable products which will be reduced. Milk may be produced from the grass which we have rather than beef. We probably exaggerate to some extent the amount of milk being produced from the use of these cereal substitutes. Most of these will go on producing pork, veal and poultry products. However, they are a factor and that is one solution.

With milk production increasing as it is in Europe, we will not be able to solve our problem because we cannot put up complete barriers and must recognise the special difficulties experienced by some countries with only one product to export. The criterion for them is not a reduction in the standard of living but whether they will be able to stay alive.

We must give more thought to the whole question of the policies we pursue in Europe. I do not accept that Irish agriculture has gained as much as it should have from our entry into Europe. From one point of view we get approximately £350 million through the various aids given and the price support from the FEOGA guarantee and guidance section, but that money has not found its way directly to the Irish farmer. Before we joined the Community ten years ago, agricultural spending as a proportion of our budget was something like 14 or 15 per cent. We reduced that progressively over a period of years and now it is down to perhaps a little over 4 per cent. The money that we so saved went into other sectors, towards improving our social welfare and educational systems. That was fair enough, but the money going into the agricultural industry today by way of assistance and subsidisation is as little as possible in the circumstances, without running the risk of a complete collapse of that industry.

The money resulting from our membership of the Community has found its way, not to agriculture but to other sectors and into other policies. The country has benefited from it but agriculture has not. Had we maintained, as a percentage of our budget, agricultural spending over the last ten years, together with the benefits of EEC membership, we might today have had a much more competitive agricultural industry in the tough economic environment in which it has to operate. We would have an industry which could probably compete with that in other European countries. There is no doubt that Irish agriculture can compete. Given the right environment a few years ago, we had the most rapidly expanding agricultural industry in the world, apart from those of Denmark and New Zealand — certainly it was equal to the one and more rapid than the other. Our farmers, given the right conditions, would certainly increase production, take risks, innovate with the best people in the industry in any place in the world.

In spite of the structural drawbacks about which we have spoken today, the shortcomings in our educational system, the age structure and the marital status of those living on the land, all these difficulties which we acknowledge, our farmers for those three or four years could cover more gound than those of almost any other country. We know that it can be done, but of course at that time we had an optimistic future, prices were increasing fairly rapidly and costs were considerably lower than in other European countries because our inflation had not been increasing as rapidly as it is today.

We did not plan things as they turned out. We did not realise that we could not continue having the same type of increases in milk prices in those years, but would have to plan to be much more competitive than we were then and for shrinking margins. I knew that it was going to happen and warned of it. We invested money in agriculture, in farm buildings and many farmers, for one reason or another did not borrow at a fixed rate. Most were borrowing for a programme at a fixed rate at first, but the financial institutions wakened up to the fact that inflation was still increasing rapidly and sought the opportunity of refinancing or giving more money to farmers on a floating interest rate. Before they realised it, farmers were paying sometimes 20 per cent and at times as much as 23 per cent interest. We had not bargained for that.

The financial institutions will say today that the farmers who have got into difficulties in those years did so through buying land or planning badly. It is true that in those same years the financial institutions were refusing some farmers, not just standing behind their counters ready to give money to any farmer who looked for it. They said they gave money to the farmer who had shown by his past record that he was a good manager. They sent out their agricultural advisers. I know of no farmer who got money without a farm plan. The banks in their wisdom thought that that farm plan was correct and that the economic conditions were right. They believed, just as he did, that that farmer was capable of paying back that money. I know of no financial institution which threw money to a farmer after he left school. They gave it to farmers with a record behind them and a future plan, farmers whom they knew to be efficient, solvent and experienced in the world of agriculture. Their calculations, just as the farmers', proved to be wrong. Today they say it is not their responsibility, it is entirely that of the farmer. In the meantime those same financial institutions have done reasonably well. If there is any business that it was good to be in in the last ten years, it was the business of lending money. I do not accept that just because inflation increased to 21 per cent interest rates should also have run at that figure. I do not believe that that is fair, natural or right.

We joined the European Monetary System and agreed to pin the value of our currency to that of our partners in that system and maintained the value of our currency up to a few months ago. If we did so, then the institution which lent money to an Irish farmer was not getting back money of less value. In the Irish market that money might buy less consumer goods, but would buy more land, more houses, more agricultural equipment and more commodities such as raw materials. The German moneylenders or financial institutions who had converted money into Irish pounds, lent it in Ireland and taken it back to Germany would find that over a period of four years they had made 30 per cent more profit than their colleague who had kept his money in Germany and lent it to German farmers or industrialists. Lending money was a good business and if the banks and financial institutions are to suffer a loss in some instances — and they will — they have done reasonably well from those who have, out of their bone, flesh and blood, scraped the 20 per cent and 22 per cent together and paid it back. They will say today that they will restructure and refinance those who can show that they will become viable. But there are many who are gone past that because when they got into difficulties, instead of lowering the interest rate to make it possible for these people to repay, they put a further levy on them. I know people who were in difficulty and the bank increased their interest rate by 2 or 3 per cent in order to shorten the agony and bring about their end quickly.

The financial institutions cannot stand back and say they have no responsibility. They take the risk as well as the farmer and they should realise that. The sad thing is that, in many instances, the banks are not going in to get their money back but are selling out just to resolve the problem. That is the punishment for those who fail to make it. Those who cannot pay back must be annihilated. The banks annihilate them just to prove the point that whether the bank win or lose those who fail to make their repayments will not survive. That is the name of the game. Very often the banks will willingly sell the land from which they have evicted one person to another person even though the other person cannot pay any greater rate of interest than the first person. If the banks were prepared to write off the loan and sell it to that person for the same price as they would sell it to another person the problem could be resolved.

Farmers have suffered a lot and the banks and other financial institutions will have to share their losses as they share the blame for the mistakes made. We have a rapidly expanding agricultural industry but the people who helped to create that are those whom the banks are selling out today. The Agricultural Institute has proved that farmers did not get into difficulty by paying too much for land but rather by providing themselves with modern facilities which are necessary if production is to be increased.

We all agree that education is a priority. Yet when we were forced because of budgetary difficulties to cut down, the area that was most severely cut was education. We retained all the staff in the Department of Agriculture and all the administrative structures, agricultural officers and so on. There are some areas where we have made savings but rather than reduce the budget for the education of the agricultural sector we must increase it. We cannot raise money by increased taxation because that has been saturated. We must agree on where we will take the money from. Opposition spokesmen will demand that no cuts be made in their areas. This is the difficulty.

We must look seriously at the whole area. I would consider cutting out the whole system of farm development officers, grants for land reclamation, grants for farm buildings and so on. If we had a good system of advice and education a farmer would have a good idea of the kind of building he needed and would not need a farm development officer to visit him five or six times to tell him whether the plaster on the wall was thick enough or the foundations were strong enough. The farmer would be investing his own money in it and would do what he thought was right. A farmer who wants to reclaim his land does not need an agricultural officer to come out with a rule to see if he put in six inches or eight inches of stones on top of the pipe or whether the pipe was 23 inches or 24 inches. No two acres of land are the same and most of these men have been wasting their time down through the years. A farmer would know how to put in a drain to improve his field after all the work that has been done and with all the advice and research facilities which are available.

In the west of Ireland we spent £50 million on land reclamation in recent years. I have perhaps carried out more land reclamation than anyone else. That is a big boast to make but it is true. There was hardly a farm where reclamation was carried out where one could not first have improved the stock rating or improved husbandry to the degree where milk yields would be increased and stock performance improved. In most instances, we set out to reclaim land without making provision for the extra money to stock the land. Maximum use was not made of the land before we started to improve it. After all the money that was spent there are fewer cattle and sheep on the land in the west than before. I am not saying that there were not farms where such reclamation was necessary. There are many farms where proper plans were not made and the Government had no plans to finance restocking of the land. Farmers did not know the money was not available and those in authority did not provide for a situation where there would be a demand for increased stock. Farmers at that time were not knowledgable in the ways of finance, husbandry and management.

I regret that the Minister had to withdraw the grants in the way he did. Many people were left hung up in a difficult situation. We should ask how the £250 million we vote for the Department of Agriculture can best be channelled to farmers so as to increase production. I do not propose that the Minister goes back to the Department and sacks two-thirds of the staff. However, if the staff were not already there nobody would dream of proposing that they be recruited for what they are doing. I do not blame them. They are probably the finest young people on the labour market. They got their jobs by way of open competition but they are not performing an economic function which is compatible with the cost of the Department. We should redirect their energies and efforts. We should not be afraid to think out new policies.

A few years ago we had a scheme known as the farm incentive bonus scheme. The increased production which was achieved through intensive advice, education and financial incentive shows us that is the way to go about it. We might have difficulties with the EEC about giving financial incentives to farmers for increased production but that is the best and cheapest way to approach it. If we continue the way we are we will not be able to raise taxation to maintain the cost of the present structures and at the same time give financial incentives to farmers; or if we do we will have to decide what other Department we would get rid of.

On the European scene we must face up to the reality of over-production and seek to promote policies that will allow us to expand — as everybody knows we must expand — while at the same time accepting that increased production is a severe embarrassment in Europe. At the end of the day the Irish economy can benefit to a greater extent perhaps by the development of other policies. While agriculture is seen to consume 65 to 70 per cent of the present budget and while we cannot foresee an end to the increased demand for agricultural spending, there will not be the political will in Europe to increase the own resources of the Community. There will be extreme resistance to any such move because there are only about eight million farmers in Europe. They are a small minority of the total European population. Others will be asking for social and regional spending and for spending on transport and so on, but we will have to have a balanced budget if Europe is to agree to a bigger budget. Therefore, we must accept some changes and we must work as constructively as possible to have those changes brought about in a way that will be of maximum advantage to us. We must not merely sit there applying a veto to change while we know that this also is putting a veto on progress.

In addition, it is worth noting that, while we do very well out of the Common Agricultural Policy, we get a much lower percentage under that heading in terms of spending than is the case in respect of the Social or Regional Funds. We get something in the region of 6.9 per cent of the social budget. Therefore, if the social budget were to increase in the morning by another one billion pounds, Ireland would gain to a tremendous extent, to a far greater extent than would be the case if the agriculture budget increased by the same amount. If we can achieve a transfer of moneys from the European economies to our economy surely we are clever enough also to devise means by which we can get a transfer of that money from one sector to another. We were smart enough to transfer to other sectors the advantages that came by way of agriculture. Conversely, we should be smart enough to transfer back in the event of our succeeding in getting improved allocations. We should consider very carefully our attitude in that regard.

So far as some of the individual European schemes are concerned, it is difficult to understand why successive Irish Governments have not decided to take, by one means or another, every penny available through the Community for spending in Ireland. The disadvantaged areas scheme is one example of where Ireland could get a further £15 million from Europe by way of paying the maximum amount of money that can be paid. This is regarded as a supplementary income but I am not totally satisfied with the way it is being spent. I would much prefer if there were schemes that would encourage increased production and involve a transfer of moneys to people working to a plan rather than merely to see money being handed out per head of stock that a farm happens to carry regardless of what is the performance of that livestock or of the needs of the individual concerned in terms of age structure and so on. Sometimes it might be better to give some of the people concerned the facility necessary to enable them to retire because in many cases the money is paid out without the possibility of the generation of any sort of economic improvement. We should not hesitate to raise in our own budget the amount of money necessary to match European spending because such money would come back to us. If the Minister were to say that he intended cutting agricultural spending in another area in order to be able to get £15 million for the Irish economy, I would support him. I have said to the IFA on many occasions that they should put forward that type of proposal, because ultimately the Irish economy would benefit. In any case, we should consider the possibility of applying these various schemes in a way that would encourage increased production in the industry and thereby enable co-operatives and food-processing industries which are working under capacity to have more produce. This would lead to greater efficiency and to increased exports.

Instead of heckling over minor details we should be trying to be constructive in debates here in the hope of pointing out to the agricultural industry what the problems are. We have been lavish in our praise of the industry and of the contribution it makes to the economy but we must recognise that 18 per cent of our work force is involved in agriculture. The industry produces only 13 to 14 per cent of gross domestic product. I am not blaming them for that. It is the result of the environment in which the industry operates and also because of the kind of policies that were pursued in this House down through the years and about which we cannot do anything now. We need much more from our agricultural industry than we are getting from it. One little cribe I have is that within this Estimate there is something like £60 million for food subsidies. That is a very high proportion of the budget. When the taxpayer looks at the Estimate for the Department and sees that the sum being provided is of the order of £215 million he will think that this is money being devoted to our agricultural industry, but that is not the case. Some of it is for social spending. I cannot understand why successive Ministers have accepted that situation as part of the cost of running the Department or of supporting the agricultural industry. The agricultural budget should be identified clearly in terms of what is spending in respect of agriculture. There is the same problem with the European budget whereby aid to the Third World is regarded as agricultural spending.

On the whole question of the restructuring of land, everybody who has spoken in the debate so far has had something to say. I welcome the fact that at last we have a Minister who is thinking seriously about this question and who is prepared to take a risk, because there is always a risk in relation to new legislation. One can never be sure exactly what effect the legislation will have or whether it will be effective in achieving the result it was intended to achieve. In this case the Minister has held firmly to the belief he espoused when in Opposition, that is, that the Land Commission were not an effective body, were not performing the function they were intended to perform and were not giving the Irish taxpayers a return for the expenditure involved. The Minister is bringing forward solutions. Though I have reservations about some of the proposals he is bringing forward, it is good that he is taking a bold step and going down a road which most of us would consider to be 80 to 90 per cent right. When the former Deputy Gibbons was Minister for Agriculture he instructed the Land Commission not to acquire further land and to dispose of the land they held. He did not say that they would never acquire more land, but to the best of my knowledge no Minister for Agriculture since then has said that that policy should be reversed. The position is that in this year's budget we are providing about £16 million for a body who have had no official function for years. It is time some Minister found a role for them.

One of the great problems of the Land Commission was that there were far too many social considerations involved in the distribution of land. The commission should have acquired land and distributed it without fear or favour to the people who were making the best use of the land they had and who would make the best use of additional land. Instead of that the commission considered such aspects as the number in a family, their marital status and whether, for instance, a child of eight would make a good farmer. Land should have been given to those who would work it. If they did not work it, the Land Commission should have re-assessed the situation some years later and reclaimed the land.

Much of the land given out was not put to the best use and the Land Commission were too slow to distribute the land they had. It is hard to believe that four years after Mr. Gibbons told them to get rid of the land they still have a substantial acreage. They think they are extremely busy people. There is an in-built self-protection mechanism and if the policy were not changed for 100 years they would have enough land to keep them going. The sooner the system is changed the better.

The Minister will have certain difficulties but if the legislation does not work properly he or some other Minister can introduce new legislation. Following consultation with the people concerned and agreement with the farming organisations he has produced the best package possible. I am willing to support him and wait to see how it works out.

We have something like 60,000 farmers who have off-farm income, excluding social welfare, of something like £5,000 per year. Over the years nobody was more attached than I to the idea of part-time farming because I come from an area where one needs a substantial amount of land in order to derive a reasonable income. Nevertheless, when so many people are unemployed we must consider whether we can plan for investing money to create a job in industry while at the same time subsidising another job for the same person on the farm. It would be ideal to have the maximum number of full-time professional farmers devoting all their energies and attention to the land. They would turn out a better product and it would be to the greater benefit of the economy.

I recognise that the Minister has inhereted an agriculture industry which is not in good shape and which requires a lot of nursing, care and planning if it is to produce more food and sell it in a shrinking market where there is already over-production. We have on the land the people who led the world in increased production in the late seventies and I am confident that, given the right environment and given money at reasonable interest rates, we will improve our position and we will get from our partners in Europe the understanding and special facilities we need, provided we are realistic in our demands and in our appraisal of the situation.

The Minister obtained the best that was possible in respect of price increases and gave Irish agriculture something more, through the Government's decision to devalue our currency. Deputy Noonan is a member of a party who would hold that we should not have devalued our currency and given our farmers 50 per cent of the price increase they got this year. I doubt if Deputy Noonan's personal opinion on this matter is different from mine and this is a problem for him, but he cannot say that our Government have not given to agriculture the opportunity to earn an income equivalent to the inflation rate. That rate is now down to 9 per cent and farmers will be getting almost that this year.

If we give a guaranteed price which provides for an increase this year for a final product we should seek to ensure that it is passed on to agriculture. It is regrettable that the work force in the food processing industry are demanding more than their fair share and demanding the sort of wage increases that farmers have not been able to get over the years. It seems that the benefits of this price increase may go to them rather than to the farmers. The workers in the industry must carry the burden in the same way as the primary producers. In good times wages were increased and working conditions were improved.

We can still get from our EEC partners excellent grants to modernise our food processing industry but we need to identify markets and products. We could channel into this area the expertise of the Agricultural Institute, a body for which I have the greatest respect. Through the years they have been carrying out experiments and working in areas where experimentation had already been done in Holland or Britain. We had only to go to Hillsborough in County Down or to County Fermanagh to see what was being done. We were duplicating much of the work done in other places and could have saved ourselves the cost and effort and devoted our energies to other areas of research. The food processing industry is an area where a better financed Agricultural Institute could utilise their expertise.

If we are able to increase our production we will get generous assistance from the EEC. If we do not get increased production we will not be able to make the repayments on the improved facilities we have already provided. I am not depressed about the future of the industry but if we do not face up to the realities and tell our farmers the truth, even when it is not always palatable, there will not be a future for us and we will become less and less competitive. We will not be able to realise for the people the full potential of our resources.

I welcome the opportunity to speak in this debate. I agree with Deputy McCartin regarding price increases. I hope that in Europe he and his colleagues will be able to do something about the control of farming inputs which have increased greatly in price, making it very difficult for farmers due to the absence of any subsidy.

I will be voting against the Estimate for many reasons, but particularly because of the Government's attitude to the Tuam sugar factory. I do not know what the Minister's attitude to the factory is but I am disappointed that the Government have not stated clearly that money out of the £30 million would be spent in Tuam. The Government changed the conditions in relation to the Tuam factory when they wrote a letter to the Sugar Company on 15 February last. I hope to have an opportunity later to speak again about Tuam.

I agree with all Deputies who said that we need to get inflation down. Deputy Connaughton said he hoped to get the inflation rate down to single figures by next year. I think he is a bit late because inflation is actually down to single figures as a result of the policies of successive Governments.

I wish to speak particularly about the amount of money taken out of the Agriculture Estimate. From the budget it is clear that the reduction will be something like £16 million in State spending. On budget day the Minister for Finance said he would be taking £47 million from farmers by way of income tax, and that there would be a charge of £1.5 million for visits by the Department's advisory staff. The principal amount saved was the £10.3 million because of the suspension of the farm modernisation scheme. That scheme has been there for about eight years and 105,000 farmers had benefited. When I put a question to the Minister recently about how much would be lost in EEC grants because of total cuts in spending in agriculture, he told me that next year we would lose £3.2 million in recoupment and another £2 million would be lost because of the suspension of the FMS. That gives an idea not only of what the farmers will lose but what we will lose in EEC aid.

During Question Time in the past week the Minister for Agriculture said he was not quite sure about the number of full-time farmers in the State. He gave a figure of 120,000, but the Minister for Finance knows how many farmers and he knew how many he would be bringing into the tax net. He gave the figure of 90,000 extra farmers who, he said, would contribute £2.5 million extra to the State. Since then he has created greater confusion by saying that he will be sending tax forms to only 20,000. These are questions the Minister for Agriculture should clarify. I am sure he would like to do a good job but he has his hands tied by the attitude of the Minister for Finance.

I hope the ACOT staff scheme will be agreed on. I will point out that it is regrettable that the ACOT committee have not enough money even to hold meetings. I attended a presentation of certificates in Loughrea last Monday to people who had done the farm accounts and the farm home management courses and I was told very clearly about the situation concerning poultry instructors. For example, County Galway, the second largest in the country, is included with about four other counties to be served by one instructor. Surely that is an impossible situation for that instructor. That is not a service for the farmyard enterprise that many housewives have throughout the west of Ireland with only one instructor for that large area.

The Minister said that the Munster Institute is to be closed and that the poultry, husbandry and farm management scheme is to be relocated. The poultry unit we have had in Athenry has been very successful and I suggest Athenry would be a suitable place to relocate the poultry, husbandry and farm management course.

Purely on the question of land, the Minister spoke about a Green Paper and a White Paper. The only report on this subject that I know about is an interdepartmental committee report on land structure and reform. Having read it I do not agree with all its recommendations but I suggest that the White Paper issued by Fianna Fáil is a good basis for new land policy. All we have heard from the Government has been speeches about what they hope to do, but they have not put anything in writing like the former Fianna Fáil Minister did. The talk about land leasing is not something new. In the west the Tuam sugar factory has been doing that for years with their land bank — they have been leasing land to people for beet growing. It is difficult to talk about land mobility when the farmer retirement scheme has been suspended. I hope that when the Government decide to resume that scheme it will be more attractive.

I am concerned about the way land is being divided. Deputies have referred to the people who get the land, but at the moment there does not seem to be any fencing of land divided by the Land Commission, whether it is commonage or ordinary land. The Land Commission should be given funds to do this work. Another problem in relation to land transfer is the matter of compensation. In the west of Ireland there are many single farmers, but the inheritance tax, the gift tax and the stamp duty have become so high that there is difficulty in transferring land. In regard to the western drainage scheme I had hoped that more money would be made available than the £9 million provided in the Estimate. Perhaps the Minister could tell us how many hectares that will cover, how many applicants will be catered for.

I was glad to hear Deputy McCartin say that more money may be available for the disadvantaged areas. We have been pressing the Minister of State, Deputy Connaughton, to have the entire 12 western counties included for grants under the severely handicapped scheme. I was very concerned about the budgetary decision to reduce the income limit under the headage scheme from £5,500 to £3,500. That was a wrong decision and the saving will be only £500,000. If the Minister is serious about building up the national herd he is on the wrong track when he does a thing like that.

As Deputy McCartin said, many farmers must have part-time employment to survive in small farms in the west. We now have a situation where farmers are being visited by social welfare officers concerning the farmers' dole.

Debate adjourned.
The Dáil adjourned at 10.30 p.m. until 10.30 a.m. on Friday, 24 June 1983.