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.
