asked the Minister for Agriculture whether the Exchequer would incur a loss as a result of paying cattle headage grants to all part-time farmers.
5.
Ceisteanna—Questions. Oral Answers. - Headage Grants.
4.
asked the Minister for Agriculture the money the Irish economy would gain if his Department were to pay the full amount of headage grants permissible under the relevant EEC Directive; the amount of the resulting demand on the Exchequer; and the money he estimates would be payable to the Exchequer in the form of income tax and VAT.
6.
asked the Minister for Agriculture the maximum cattle and sheep headage payments per livestock unit permitted under EEC regulations; and if he has any plans for making payments at the full amount allowable to Irish farmers.
7.
asked the Minister for Agriculture if he will consider removing the income anomaly on off-farm employment so that farmers can qualify for headage grants both for cattle and sheep; the number of people who do not qualify because of the restriction; the number of cattle and sheep; and the estimated saving to the Exchequer.
It is proposed to take Questions Nos. 4 to 7, inclusive, together.
If headage grants at existing rates were paid to all part-time farmers in the disadvantaged areas, about 11,000 farmers who were disqualified from payment of grants on some 125,000 cattle and 50,000 sheep since the limit on off-farm income was introduced in 1979 would be brought back into the schemes. The abolition of the off-farm income limit would involve an extra cost to the Exchequer in the first year of £4.5 million and would mean that less resources would be available to those most in need, that is, full-time farmers and those with low off-farm earnings. In these circumstances, I do not propose to remove the limit.
The maximum cattle and sheep headage payment per livestock unit permitted by the EEC under the disadvantaged areas schemes is 97 European currency units equivalent to some £67 per head on adult cattle and £10 per head on sheep. To increase the current rates here to the permitted maximum would involve extra expenditure by the Exchequer of about £38 million in the first year and this also could not be justified in present circumstances.
Any questions in regard to income tax and VAT payable by farmers in the disadvantaged areas are a matter for the Minister for Finance.
My question referred to the loss he expected arising out of paying headage to part-time farmers and I was thinking that perhaps, with the introduction of income tax on all farmers, since half the headage is paid by the EEC and half by our own Government, then if farmers fall within the tax net the Government would be getting back almost all of its contribution.
Would the Deputy ask a question?
I only want the Minister to understand why I asked the question. I want the Minister to indicate if he can do a calculation on this in view of the changed situation with regard to income tax and if he could consider there might be only a small loss in bringing these farmers back into the headage scheme.
First of all, it would not be safe to assume that the Exchequer would get a return in taxation of certain moneys paid into the disadvantaged areas for the simple reason that no matter what the tax rate might be, unfortunately it is most unlikely that many farmers in these areas will ever have a taxable income. It would be much better for them and the State if they had. For that reason it is difficult to assume one would get a great deal of money. It is something in which I have an interest and I shall certainly be looking at some of the figures involved but, because of the low income of the farming community in the west, there would not be a taxable income at the moment.
One of the attractions of this scheme is the fact that 50 per cent of the cost incurred is paid by the EEC and it would not be economic to use this scheme to increase the national herd by the extinction of the scheme at the full rate.
It would be hard to argue with Deputy Walsh's assumption. We are in fact getting reimbursed from Europe on a £ for £ basis. This system has been in operation for a number of years and the problem is that we have to take note of the budgetary situation here. As well as that you have the problem that a number of areas which should be included in severely handicapped areas are not in at all. An in-depth look is being taken at the situation but for a variety of reasons it has not been possible over a number of years to increase the headage payments.
Mr. Leonard
Would the Minister not agree that it did not make sense in this budget year to restrict the qualifying limits for cattle headage grants and at the same time any person with another form of employment had to pay tax from zero? There was no £20 allowance. Do the two things make sense in the confines of the budget itself?
The problem was that within the confines of the budgetary measures, there was not enough money to go around. The Government wanted to ensure that full-time small farmers and people with very low off-farm incomes got the money.
Mr. Leonard
They got it every other year.
Yes, but it was important that they continued to get it.
Mr. Leonard
They did not get anything extra.
It could be argued that they did not get anything less, and that was very important.
I was talking about part-time farmers. Unless these people with sizeable farms have very big families, they will automatically be in the tax net. Therefore the money paid to them through headage grants will be given back to the Government leaving the country and the farmers better off.
This idea has been floating around for some time. I will have the matter investigated.
Will the headage grants ever be given again to the people who do off-farm work? Some people on unemployment get more than the limit for an off-farm worker. Any small farmer doing off-farm work at present will not get this headage grant. These grants should be given to small farmers in the disadvantaged areas so that people working but earning very small wages will qualify.
All these matters will be reviewed in great detail before the budget, and I am taking note of the various arguments made.
I am calling Questions Nos. 8 and 9.
What happened to Question Nos. 6 and 7?
Questions Nos. 4, 5, 6 and 7 were taken together.
That is desperate.
I answered Questions Nos. 4 to 7 together.
The record will show that Questions Nos. 4 to 7 were taken together. If Deputies wish to ask further supplementaries, I will allow them.
On a point of order, that is not the way Question Time should be conducted. I came into this House to listen to the replies to my questions. The Minister should have said he was taking these questions together.
I can assure the Deputy——
You are paying too much attention to that side of the House.
Deputy O'Keeffe will withdraw that remark.
What did I say?
You alleged that the Chair is not impartial, that he is paying too much attention to the Government side of the House. He will please withdraw that remark.
All right. Deputy Spring got plenty of latitude yesterday morning when the planning Bill was being discussed.
Does any Deputy wish to ask supplementaries on Questions Nos. 4 to 7?
On the question of the income level for off-farm workers, is account taken of the size of the family?
No. The limit is £3,500 off-farm income.
Would the Minister have a look at this because there are large families in the northern part of my county and the father might be forced to work. This might make him ineligible for these grants because his income could be above the £3,500 limit. Would the Minister look at this question with a view to relating it to the size of the family?
We are talking about off-farm income and that could not be related to the size of the family. I will be taking a closer look at the end of this year at all these matters.
That anomaly does not exist in the North of Ireland. There is a lot of talk about standardisation but why not have the same incentives for farmers in the south as they have in the north?
Our farmers get benefits the northern farmers do not get.
The Government are always talking about reform.
Because of the disincentive created in the budget, will the Minister agree that production levels will fall? What does he intend to do about that situation?
I cannot agree that production levels will fall because of this, nor can I see a relationship between production and off-farm income.
If the Minister cannot see the difference we might as well pack up.
I am having a look at the entire scheme.
The Minister will be doing an awful lot of looking.
The average weekly income of a wage earner is approximately £100. Would the Minister agree that an unemployed married man with a wife and three children would receive a similar figure? Would he also agree that the limit of £3,500 off-farm income on the payment of the headage grant is a loss of revenue to the Exchequer by way of EEC funding and a further loss to agriculture by way of investment in the agricultural industry?
Like many other Deputies, I would like to see the limit very much higher, but that cannot be done for several reasons. I have to take issue with the Deputy when he said a married man with a wife and three children would be entitled to nearly £100 unemployment assistance. I doubt if it would be that high.
It would be close to it.
Within our present resources this is the only way to ensure that the small farmer working full-time on the land and people with very low off-farm incomes will benefit.
8.
asked the Minister for Agriculture the cost of carrying out headage inspections in severely handicapped areas for the purpose of headage payments.
9.
asked the Minister for Agriculture if considerable savings could be made by introducing a spot check system rather than a complete inspection in respect of the payment of headage grants in the severely handicapped areas.
It is proposed to take Questions Nos. 8 and 9 together.
The estimated cost of carrying out inspections under the various headage schemes in the severely handicapped areas in 1983 is about £1½ million or some 2.5 per cent of the grants totalling £63½ million payable to farmers in those areas.
As regards spot checks, I would refer the Deputy to my written reply on 3 May to an earlier question by him. In view of the need to guard against fraud and because of EEC requirements particularly in respect of the calf premium scheme, it is not possible now to rely on spot checks although they were used to a limited extent in 1982. Every effort is, of course, made to simplify administration of the seven different types of livestock headage schemes now in operation and, in fact, considerable operational savings have been achieved through the use of composite application forms, common reference dates and single on-farm inspections for different schemes.
Mr. Leonard
The Minister mentioned £5 million. Does that take into account the fact that most of the officers employed will be sitting in their offices because of the restriction on this and other schemes? Is their full salary taken into account?
The Deputy's question relates to the working of the scheme this year. There are 130 permanent inspection staff plus a total of 68 borrowed from other Departments and we take due note of their salaries. Every effort has been made to ensure that for most farmers only one visit from an agricultural officer will be required. This is a big step forward. When one considers that the total headage payments for the entire country is £103 million this year it gives some idea of the tremendous number of inspections one would have if they were not channelled and done in a programmed manner.
Mr. Leonard
Would the Minister not agree that those 68 men are unemployed because they have no work in the FMS offices?
Would the Minister agree that the inspection costs at least as much again because of the fact that farmers have to be involved as well as agricultural inspectors? The disturbance to lifestock and the disruption of routine on the farm involves a serious cost that could be avoided if spot checks were carried out as they are in Northern Ireland. If that were carried through and if severe penalties were imposed there is no question but that immense savings could be made.
There is a very basic difference between the way we operate here and the way they operate in Northern Ireland. They have a statutory system of herd and flock books which they have used over the years. We have not got that. The nearest we have come to it is the herd book that we had to have this year for the calf premium scheme. There was a very enlightened approach taken to farmers who had less than four cows for inspection last year. Over 14,000 herd owners with very small herds were asked to send the cards to the local offices without an inspection. I regret to say that in the majority of cases it just did not work out. That was a major attempt to streamline the business and for a variety of reasons it did not work out.
Would the Minister consider asking the payments section of his Department when sending out cheques for headage payments to put some note with the cheque, even the herd number, because of the confusion it causes every year when people get cheques with no reference to what scheme they relate to or even to the individual farmer?
That is an administrative problem involving the computer, but I will bring it to the notice of the Department and I will see what can be done.
Will the Minister assure us that no charge will be imposed on the farmer for the carrying out of such inspections?
That is a separate question.
Will he give us that assurance today?
There is no such charge.
Will there be?
10.
asked the Minister for Agriculture the amount of money small farmers will lose in headage grants in the severely handicapped areas in each of the counties where the scheme applies; and the amount of EEC money lost to Ireland as a result of the lowering of permitted off-farm earnings.
11.
Mr. Leonard
asked the Minister for Agriculture the number of applicants affected by the budgetary measure to reduce the qualifying income limits for persons in off-farm employment applying for cattle headage payments under the severely handicapped areas scheme.
It is proposed to take Questions Nos. 10 and 11 together.
The lowering of the off-farm income limit will reduce total headage grants to all farmers under the disadvantaged areas schemes by an estimated £1 million in 1983 and £1.3 million in a full year. Half of these amounts would have been recovered from FEOGA.
About 2,500 applicants for cattle headage in the severely handicapped areas will be affected. It is not possible to give reliable figures on a county basis.
Mr. Leonard
Would the Minister agree that cattle headage payments are the most effective way of increasing the national herd, which so badly needs to be increased? For the saving of a small amount of money does the Minister think this was a wise decision?
Irrespective of what I think, the payment was given on the basis of a supplement for farmers in disadvantaged areas. My personal view is that it is a spark to production in the sense that people generally regard this payment as being connected with livestock improvement and additional cattle. Despite all the payments over the years we do not seem to have many more cattle on our farms but there are many other reasons for that as well.
Mr. Leonard
Is the Minister aware it is generally accepted that over the years we have been paying the minimum amount for cattle headage and that we did not approach it in a positive way at any time? Does the Minister not also agree that by bringing this down from £5,400 to £3,500 or £67 a week, less than any man and his wife would be receiving on supplementary benefit, they are removing any incentive for people to increase their herds or improve conditions on their farms?
Our problems were of a budgetary nature. We wanted to ensure that the people who had no off-farm income on the small farms and the people with very low levels of income would be looked after.
Mr. Leonard
The Minister mentioned the herd and stock book in Northern Ireland. This would simplify inspections and would help to curb the incidence of disease. Would the Minister consider introducing this and measures such as this so that the money would be going to the farmers rather than being tied up in administration and inspection?
Going on the pilot scheme carried out last year with the 14,000 herd owners of limited stock it might be difficult enough in this country but we will keep a very open mind on it. I think the Department have done great work in lowering the administrative costs on the huge amount of inspections. I will take another look at the Northern Ireland situation and then we will compare the two systems.
At present if a man's earnings from outside agriculture exceed the guideline laid down by £10 or £20 he may lose up to hundreds of pounds of headage payments. Would the Minister consider the possibility of having a phasing out rather than a complete cut-off point at a particular figure? If a man were, say, £100 over the limit, would the Minister provide that his headage payments would be reduced by £100 rather than not receiving them all?
For administrative reasons that system has not been adopted over the years. I could see some merit in it except that with so many schemes and so many reference numbers and payment dates it could get a bit messy. I will take a look at it.