Dáil Éireann debate -
Tuesday, 23 Oct 1984

Vol. 353 No. 1

Land Bill, 1984 [Seanad]: Second Stage.

Minister of State at the Department of Agriculture (Mr. Connaughton)

I move: "That the Bill be now read a second time".

The main purpose of the Bill is to exclude agricultural leases from certain provisions in the Statute Book which might be regarded as inhibiting the development of leasing as part of our land tenure system. At the same time, the opportunity is being taken to include a group of provisions of a technical nature aimed at tidying up some existing, largely domestic, land settlement operations and functions.

There is now a growing awareness that our owner-occupier system of land tenure is rather rigid and inflexible and that it seriously retards the pace of structural change. Land owners persist in holding on to land long after they are able to work it fully. It is quite evident that this attitude which attaches unwarranted status to the mere possession of land contributes, to a very substantial degree, to the rigidity of our land structure. If agriculture is to make its optimum contribution to the economy, then it is the use to which land is put that is of importance. The rigidity in the system must be replaced by mobility.

Since coming into office, I have given particular attention to the problem of increasing the rate of land mobility. I want to ensure that more and more of our unused land is put into production by being channelled into the management of those willing and able to work it to its full potential. One of the most promising ways of doing this is, in my view, through the encouragement of land leasing.

The programme of reform of landlord-tenant relations in Ireland saw the tenant advance from the position of occupation at the whim of the landlord to himself becoming the owner of the land. The process began around 1860 with a series of Statutes which granted progressively more rights to the tenant until the balance of advantage lay with him over the landlord. Following the successful struggle of the Irish farmer to gain ownership of his own land, there was a natural determination to ensure that the old system of landlordism should not be revived. Accordingly, the Land Commission were given the power to control leasing and the legislation favouring the tenant remained on the Statute Book. This emphasis on ownership led to a situation where possession of land, per se, tended to be regarded as an end in itself and more important questions of user and management tended to be overlooked. The instinctive and basic motivation of land holders was the determination to retain control of their holdings. Because the legislation was so much orientated towards the tenant, the adoption of leases, even of a short- or medium-term nature, came to be seen by land holders as a threat to their secure ownership of the land.

This situation led, in turn, to the adoption of the 11-months letting system as a source of revenue for those who were unable or did not wish to work their lands themselves. As this is merely a licence to use lands for a certain limited purpose for a certain limited period it does not constitute a letting in the full legal sense and is not, therefore, governed by the existing landlord-tenant legislation. If, therefore, we wish to persuade those at present letting under the 11-months system, and any other farmers for whom the arrangement might be beneficial, to turn to leasing instead, then an obvious requirement is to repeal any legislation which might appear to act against their interests. This is precisely what I propose to do in this Bill.

In my view it is obviously right that a prospective lessor should have the assurance that, when the lease has expired, he will be able to resume possession without fuss or legal complications. Any apprehension about claims under law for tenancy interests, compensation, and so on, would present a serious, if not decisive, deterrent for a lessor. Because of this I considered it proper that those statutory provisions in the old legislation which seem to favour the tenant unduly during the course, or on expiry, of a lease should be identified and revoked. This course was recommended in the report of the Inter-Departmental Committee on land structure reform and accepted in the 1980 White Paper on Land Policy. The effect of the present Bill, therefore, will be to give equal status to both lessor and lessee and to enable them to come together and agree between themselves on the terms of the lease without any over-riding statutory provisions. I might add, in passing, that two model leases are widely available at the moment. One was drawn up jointly by the Irish Farmers' Association and Allied Irish Banks working in co-operation with the Incorporated Law Society of Ireland and the Royal Institute of Chartered Surveyors. The other model was drawn up by the Irish Co-operative Organisation Society. These documents are, of course, models only. The precise provisions to be included in any individual lease, will, as I have said, be a matter for the parties concerned in each case.

I will now outline briefly the sections of the old Acts which are covered by the Bill at section 3 (1). The intention is that these enactments will not apply to a lease of agricultural land made after the Bill becomes law.

Sections 70 and 71 of the Landlord and Tenant Law Amendment Act, Ireland, 1860, provide for reinstatement of a tenant if he pays all arrears and costs within six months of the execution of a decree for possession and applies to the court for reinstatement. It is felt that a lessee who is in breach of the terms of his lease and against whom a decree for possession has been executed should have no further claims on the leasehold and that the lessor should be entitled to resume undisputed possession of his land. Subsequent minor amendments of these provisions contained in section 13 of the Land Law (Ireland) Act, 1881, sections 7 (3) and 30 (2) of the Land Law (Ireland) Act, 1887 and section 16 of the Land Law (Ireland) Act, 1896, are also provided for.

Sections 3 and 7 of the Landlord and Tenant (Ireland) Act, 1870, provide for the payment of compensation for disturbance by a lessor. There is legal advice that ejectment of a tenant on expiry of a lease could be regarded by a court as disturbance. As indicated already, one of the main aims of the Bill is to ensure that it will be the terms of the lease itself which will govern the relationship between the lessor and lessee. If the lessor is forced to take ejectment proceedings in order to regain possession of his property on expiry of a lease, then he should not be put at risk of having to pay compensation to the lessee.

Section 4, Landlord and Tenant (Ireland) Act, 1870, provides for a claim by a lessee, on quitting the lease, for compensation for improvements carried out by him on the leasehold. Such improvements might have been carried out against the wishes of the lessor, or be of no value to him. Again, it seems much more appropriate that the arrangements for improvements, as agreed between the parties, including compensation, if any, should be determined by the lease agreement itself.

Section 1, Land Law (Ireland) Act. 1881, gives the lessee the right to sell his interest in the leasehold. Here, also, I feel that the parties themselves should prescribe the terms of the lease, including any provisions regarding sale, subdivision or sub-letting by the lessee as they may agree.

Section 4, Land Law (Ireland) Act, 1881, provides that a lessee from whom a lessor demands an increase in rent is entitled to compensation, to be fixed by the court, in respect of the fall in sale value of the tenancy in consequence of the increased rent. It is probable that this provision was primarily in respect of tenancies based on the simplest documentary, or even verbal, agreements. Modern leases would normally make provision for adjustments of the rent during the term of the agreement, so that the questions of the lessor "demanding" an arbitrary increase would not arise.

Section 13, Land Law (Ireland) Act, 1881, permits a lessee to sell his interest within six months of the execution of a decree for possession for non-payment of rent. The intention here is to ensure that the lessor is entitled to retain undisputed possession of his property on termination of the lease for whatever reason.

Section 22, Land Law (Ireland) Act, 1881 renders void an agreement by a tenant to contract out of any rights conferred on him by statute provided the holding concerned has a PLV not exceeding £150. Because of the Supreme Court decision declaring the PLV system to be unconstitutional, it is possible that this provision is no longer operative. However, it is included here in order to put the matter beyond doubt. The intention is that, as already indicated, the terms of a lease will be those agreed between the parties and will not be subject to overriding statutory provisions.

Let me emphasise here, once more, that this Bill is not, and was never intended to be, a great charter for the promotion of leasing. It has one simple purpose and one only. That is to deal with the purely legal constraints which are at present inhibiting the making of leases. It is a small but very fundamental piece of legislation which will clear the legal difficulties and enable us to proceed on an all-out effort to promote the leasing system and I would ask Deputies to debate it in that light.

I am well aware that the removal of these inhibiting provisions will not, of itself, succeed in getting leasing established as a normal farm management practice. However, it will help clear some of the worries farmers have in regard to leasing their land. It will now be open to those looking for land to lease and those willing to make land available to come together freely to agree on the conditions which should attach to each letting.

The major task still facing us is to get people to see that the letting of their land for a term of years is a very simple and profitable option for those who are unable, because of age or other reasons, to work it. There is, of course, an amount of such land available at present. Here I have in mind not only those who are already letting under the 11-months system but also those many farmers whose concern for their land would not allow them to risk its exploitation under seasonal lettings. Such a farmer would see an advantage in making a leasing arrangement with a neighbour whom he could trust who would not abuse the land and would hand it back in prime condition. Neither have I in mind only smallholders, especially those in the west. I can see great advantages in leasing for farmers with good holdings in the prime farming areas such as the Golden Vale or any other prime farming area.

Even with the way cleared by this Bill it will take a great amount of promotion to get the concept of leasing accepted. Considerable progress has already been made. My Department are taking a positive role in promoting it. Area officers have been assigned specifically to the task of promoting and encouraging leasing in their areas. They are fostering discussion and interest and are co-operating with farming organisations, co-operatives and other national and local bodies who are anxious to bring potential lessors and lessees together.

The Social Welfare Act, 1984, contains a provision for new rules for the assessment of means for social assistance in cases where land is leased. Previously, income from leasing of any kind of property was based, broadly speaking, on the capital value of the property while income from 11-month lettings was taken to be the actual rent received. Under the new rules rent received on foot of bona fide leases of agricultural land will be treated in the same way as rent from 11-month lettings for the purpose of assessing income unde the Social Welfare Acts. This has removed what I considered to be a serious obstacle to the adoption of leasing. Before I leave the subject I would like to say that I am at present considering other factors in leasing, including the impact of social welfare schemes and of taxation as well. Of course, the budgetary constraints under which we work at present will limit the options to be explored.

It has been claimed that, in introducing this Bill, I am bringing back landlordism to this country, that I am ignoring the lessons of history. In my view, the people who make these claims are themselves ignoring the fact that conditions now are in no way comparable to those which existed in the 1800s. At that time almost all our land was owned by a comparatively small alien class and Irish tenants were completely dependent on them for the renting of the farms they had. It was to protect the helpless tenants that this legislation we are talking about was introduced. Today we are talking about Irish farmers who own their own land. If one of these wishes to lease his land are we to regard him as a modern-day Lord Leitrim or Castlereagh? I hardly think so. What I see is an Irish farmer coming together with his neighbour to lease his land, an arrangement working to their mutual benefit. At present this legislation stands in the way of such an arrangement. If we are to be serious about promoting leasing it seems to me obvious that we must remove this great stumbling block.

Before dealing with sections 4 to 14 of the Bill I should like to mention the recent Government decision to abolish the Land Commission.

Mr. Wilson

It was a disgrace.

Mr. Connaughton

The Land Commission was, of course, entrusted by successive Governments with the task of carrying out land policy. It is one of our oldest State agencies set up 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. This was done by way of advances repayable over a long term.

Since that programme neared completion in the thirties, the main activity of the commission has been the acquisition of land for redistribution to smallholders. In the operation of this policy, it was necessary to reconcile the purely economic aim of maximising agricultural production with the social aim of protecting and improving the fabric of rural society. This activity has had a considerable impact. The enlargements it provded 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. However, it is an activity which has, in recent years, encountered increasing difficulties, for two main reasons.

Firstly, very few large estates now remain available for acquisition and the acquiring of smaller farms, while requiring the same time-consuming and complex legal procedures to complete, makes little overall impact on structural improvement. Secondly, though land prices and interest rates have dropped recently they are still at a level which puts the ultimate cost to the allottees beyond that which any normal farming enterprise could carry. This means that the Land Commission have been forced to dispose of land for very much less than its original cost, with consequent loss to the Exchequer. Because of these factors, the scope for direct acquisition of land has been very much curtailed and the amount being acquired has diminished steadily over the past few years.

I want to make it very clear, however, that the abolition of the Land Commission will not mean the abandonment of a land policy by this Government. The aim of Government land policy is, as declared in their national plan, to ensure that land is in the hands of those best able and willing to work it to its maximum potential. The fact is that, since responsibility for the Department of Lands was transferred to the Minister for Agriculture in 1977, land policy has been a function of that Minister since. The Department of Agriculture as part of its ongoing work continues to be responsible for land policy which will be concentrated, generally on measures designed to increase the rate of land mobility.

I should now like to deal with sections 4 to 14 of the Bill. As I said earlier, the opportunity is being taken to streamline some land settlement procedures and to facilitate revesting and the exchange of land. For example, up to now, there has been the power, in exchanges, to accept registered land only. It would facilitate the distribution of lands on hands and, generally, facilitate schemes for rearrangement, if this power to exchange was extended to include unregistered land where the exchange has a right to vacant possession.

Another proposal is to provide for the dissolution of the Irish Church Temporalities Fund, the extinguishing of charges on land payable to that fund and the validation of the ending of payments to the fund as from 28 September 1975. The history of the fund, very briefly, is that under the provisions of the Irish Church Act, 1869, the temporal property of the Established Church, including its revenue, passed to the State. The Act also set up the Church Temporalities Fund into which the former revenue of the Church was paid. In 1881 the administration of the fund devolved on the Land Commission. Over the years the process of compulsory redemption of charges on lands which were the subject of proceedings under the land purchase Acts brought about a huge reduction in the income accruing to the fund and the collection of rents became uneconomic. By 1975, the rental income was reduced to about £1,000 and collection of the remaining rents was ceased. The section also provides that the assets, now standing at about £3 million in Government securities and cash and any future sums that accrue, will be paid into, or disposed of for the benefit of, the Exchequer, as the Minister for Finance may decide. Section 14 and the Schedule to the Bill provide for repeal of various enactments. These repeals are required in connection with the disolution of the fund.

It is also proposed to provide that the term "prior mortgage", mentioned in section 80 of the Building Societies Act, 1976, does not include charges on land to secure payment of a purchase annuity, a land reclamation annuity or any other annual payment arising from operations under the land purchase Acts. Under section 80 of that Act, a building society may not give a loan on a property subject to a prior mortgage unless that mortgage is in favour of the society. The effect of the present proposal will be that the existence of any land purchase annuity or annual sum or land reclamation annuity will not prevent a building society from advancing a mortgage on a property subject to such a payment. As a major proportion of land is subject to land purchase annuities the effect of this provision will be to greatly simplify the process of setting up a building society mortgage.

Before I conclude, I should like to emphasise that whilst the encouragement of leasing is an integral part of a comprehensive land reform programme, it is nevertheless only a first step in the formulation of such a programme. I have in recent months, been examining critically a number of aspects of the land problem that seem to me to be of particular importance. The problem of late inheritance and the need to give smallholders a fair chance to compete for land coming on the market in their locality are matters of fundamental concern. Some progress is already being made in encouraging group purchase of land, the rearrangement of fragmented holdings and the division of commonages.

It has been estimated that some 80 per cent of all land transfers take place as a result of inheritance and succession. What is most desirable here is that successors come into possession of land at an age when they are still sufficiently receptive to the up to date ideas and practices that will enable them to work it efficiently. Unfortunately, this is not what is happening. In far too many cases, farmers delay transferring their lands until they are themselves aged and their successors are no longer young. Naturally, individual family circumstances will dictate the time and manner of the disposition of property, but we must seek ways which would contribute towards lowering the average age of succession.

I am having a look also at the possibilities for partnership arrangements or phased transfer of management between owner and heir. In general terms, I incline to the view that the problem of late succession and inheritance is not one in which legislation is likely to make a major impact. Nevertheless the budget decision to extend for a further year the stamp duty exemption for transfer of land to young farmers is an example of the kind of positive influence that can be exerted by the State in this area.

I have been considering also whether there might not be a case for regulating or controlling the sale of land that comes onto the open market. I am convinced that State intervention in the open market is essential in eliminating undesirable land purchases and in giving developing farmers and qualified landless persons an opportunity to compete for the purchase of land with some hope of success. Related to this would be the encouragement already being given for joint purchase by small groups of farmers where such land comes up for sale. By coming together to purchase as a group the individual farmers are given purchasing power they would not otherwise possess. I am very happy with this trend to date.

Apart from what I have touched upon. there may be other aspects of the land situation which should be considered and I would welcome the views of the members of the House on these. Land policy has been virtually unchanged for a long time. It is clear to me and is, now generally accepted that the aim of future policy must be to create the conditions which will stimulate the optimum level of structural change, thereby ensuring that land is in the hands of those best able and willing to work it to its maximum potential. Leasing will have a very important part to play in this area in the future and I have no hesitation in commending the Bill to the House as an important measure designed primarily to encourage the wider acceptance of leasing.

It is important to point out that if the Bill is passed farmers can be categorically assured that if they lease land the legislation will be such that they will be entitled to get their land back on the expiry of the lease. That is a fundamental principle contained in the Bill. Heretofore I could not give that assurance. When this Bill becomes law every farmer who decides to lease land will be able to get it back when the lease expires.

Mr. Noonan

(Limerick West): In his speech the Minister said he was convinced that State intervention in the open market was essential in eliminating undesirable land purchases and for giving developmental farmers and qualified landless persons an opportunity to compete for the purchase of land with some hope of success. No Minister in his right senses would make such a statement when the Government of which he is a member abolished the Land Commission a few months ago.

The encouragement which has been given for joint purchase is a step in the right direction. However, it is not today or yesterday that this happened. It has been in operation for a number of years.

What the Bill does is remove some of the legal and technical obstacles to leasing. The primary purpose of the Bill should be to encourage land leasing but it does not do that. It would appear that the problem has been looked at in a strictly legal context. The problem of land ownership and leasing cannot be examined in isolation. These problems must be viewed in a wider context.

I am not convinced that the Bill dealing with social welfare will remove the anomalies which exist regarding land leasing. I ask the Minister to elaborate on this aspect in his reply. The social welfare system, income tax code and availability of credit are all concerned. The decisions taken in these areas will determine if long term leasing will have an impact on our farm structure. Unless we face reality we are wasting our time debating this Bill.

We have been promised this Bill for quite some time. We were led to believe since the Minister took office in December 1982 that it would encourage our young progressive farmers to lease land from those who because of age or for other reasons cannot actively run their farms. This Bill is a bitter disappointment to those people. It contains nothing that will enable them to compete with larger farmers seeking land on the conacre system. We must face the fact that to implement any worthwhile leasing scheme we will have to spend some money. The amounts need not necessarily be very large. While there would have to be some contribution from the State, some funding might be made available under one of the various EC schemes or structures. However, whatever money is spent in this sphere will be well spent because the increased production from the land leased will more than repay the initial outlay.

We must realise that the problem of land leasing not only impinges on the farmers directly but represents a social problem also. If our young and intelligent people see no future in farming because of their not being able to obtain land to make their existing holdings viable, many of them will move to off-farm jobs. Apart from adding to the problem of unemployment that would result in one of two possible outcomes for our farm structure: either the larger farms would be made bigger because of the squeezing out of the smaller family farm or we would return to an almost mere subsistence level of low production farming such as was the case 30 or 40 years ago.

The reception given to this Bill is a reflection of how effective people expect it to be. I have not seen in any publication, not even in the Farmers Journal or any other such publication any welcome for this Bill. Instead, the point is made repeatedly that the Bill is certainly not of a progressive nature and is not what was anticipated when the Minister launched this crusade about two years ago. The Bill is being treated largely for what it is, a non-event. For months we have been promised measures which would improve land mobility and help the smaller progressive farmer to acquire the extra land he needs so urgently but there is nothing in the Bill to enable him to compete with large farmers, with business interests or speculators. We must realise that a small farmer cannot compete on the open market with such opponents. If he is to acquire the land he needs he must be given financial assistance. Alternatively, certain restrictions might be introduced to discourage those without a farming background or training to acquire land.

Apart from catering for those farmers who need extra land it is important that some provision be made to train properly young people who wish to embark on farming as a career. Again, this Bill offers no hope in that direction. The possibility of procuring financial help for them from the EC should be investigated fully. As suggested in an earlier White Paper the introduction of some farm sales surcharge should be considered. I will be dealing later with those suggestions as outlined in the 1980 White Paper. Such a surcharge should apply only to the sales of sales of large farms and estates and the revenue collected should be used in total to assist developing farmers to purchase land. This could be in the form of a direct payment or of an interest subsidy. In our opinion a land Bill should have two main goals. It should be designed to bring about the maximum production possible from every acre and it should provide as many people as possible with employment, both on family farms and in the food processing industry. I cannot visualise this Bill making any significant impact in either of those respects. That is why I find it so disappointing.

The rate of change in Irish farm structure has been very slow. The average size of farms has been increasing only slightly. There are still in the region of 80,000 holdings of between ten and 40 acres. This illustrates that the rate of land mobility in Ireland is very low compared with that in other European countries. The amount of land in respect of which there is a change in ownership is less than 4 per cent of our total arable acreage and of all land transfers only about 15 per cent changes ownership on the open land market.

Those figures are significant. They should be taken into consideration by the Government and should be considered in the context of a Land Bill that would be far more acceptable than the one before us. It must be noted, too, that there was no indication of a land policy for the next three years in the plan announced recently. Surely, in a country in which agriculture is the basis of the economy, a policy of land utilisation and mobility should have be given priority in any plan.

Therefore, in order to increase land mobility and to make land available to young and aspiring farmers, we must focus on older occupiers. The objective must be to promote earlier transfer of farms to the younger people. This calls for an attractive retirement policy which in turn necessitates an appropriate social welfare and health policy. Our policy in this regard was clearly set out in the White Paper of December 1980 which was laid before each House of the Oireachtas. We aimed at devising a system whereby as much as possible of our agricultural land would be channelled towards the progressive small and medium farmer who is making the best possible use of existing holdings and to young people with an acceptable level of agricultural training and experience. Our idea was that the Land Commission or some other land agency equal to them would play a vital role in that policy. Now there is no such agency to monitor the sales of land or to ensure that the land will go to the people whom we considered would be best able to put it to its full use. For our part it was not merely a question of talking about land leasing: we were prepared to do something about it.

The Government have taken a number of important decisions such as the opening up of the land market to non-EC nationals, suspending the compulsory acquisition powers of the Land Commission and promising to repeal various sections of Land Acts. I am not necessarily against those moves but I am against not having a well thought out and coordinated policy to replace them. Our criticisms were directed at the overall policies, not just one aspect of them. We support land leasing subject to proper controls. Later on I will be mentioning the part we have played in land leasing while in Government.

There is a serious problem of land under-utilisation in many parts of the country. Land leasing is only one of a number of policy instruments which can be used to tackle this problem. This party are in favour of land leasing as part of an overall land policy and subject to proper controls as contained in the 1980 White Paper on land policy. The Government appear intent on disregarding those controls. It is important that strict controls are maintained so as to ensure that land is made available to farmers who are trained to work and to prevent land being purchased by non-EC nationals, non-farmers, large farmers and speculators. Assistance must be given to small farmers, funded perhaps by a surcharge on the purchase of land, in other words to help the progressive farmer, particularly the young farmer, to purchase more land if this is feasible and profitable.

Retention of the powers of the Land Commission with regard to compulsory purchase and approval in advance of all land transactions should be required and there must be an improved farm retirement scheme. These proposals form an integrated policy of which land leasing on a one to one basis is merely one element and not a general aspect. The Government seem to be intent on creating a free for all. The Land Commission, which is now to be abolished, had their compulsory acquisition powers suspended. Since there will be no upper limits on the acquisition of land by an individual or company and no penalties either, there is nothing to prevent a wealthy individual or company buying dozens of farms and then leasing them to agents and farmers on their terms.

I should like to emphasise what is meant by a one to one basis on land leasing. It means land leasing on the basis of one landlord and one tenant but not on the basis of one landlord and perhaps dozens of tenants which would not and never will be acceptable to the Fianna Fáil Party. I should like to emphasise that we are not against land leasing but the introduction of land leasing, if not handled with proper care, could cause social problems in future. You cannot lightly disregard or run over the deep instincts and traditions of the Irish people in respect of land and expect to get away with it easily. I must warn the Minister that a tenant interest will be created with the introduction of land leasing on a wide scale unless we have certain safeguards which will combine in times of poor agricultural yield to seek reductions in rent, to prevent eviction or non-payment of rent and to change legislation which is at present on the side of the land owner. To insist on the absolute right of the land owner, even after decades of tenant occupation, is unrealistic and inconsistent with social equity. It would be far better to go for a limited and controlled form of land leasing on a one to one basis and to develop it slowly and naturally rather than to allow, perhaps by default, a counter revolution in land policy which will only store up problems for the future which, thankfully, we do not have today.

This Bill has not a shred of policy to improve the mobility of land. It is only tidying up administrative verbiage. Its sole impact is on words. It is a paper exercise without any meaning. I ask the Minister to have another look at the basic principle outlined in the 1980 White Paper on land policy. There should be a proper leasing scheme so that full use of land which is under-utilised can be made. In order to encourage the transfer of land to younger people, there would be a retirement annuity under the farm retirement scheme which is attractive and acceptable. If my memory serves me right I think it was the present Government who abolished the farm retirement scheme. Bad as it was it was better than having no scheme as is the case at present. The success of a land leasing scheme depends on a proper retirement scheme, bearing in mind social welfare, tax codes and so on. Furthermore, a retiring farmer should not be prohibited absolutely from participation in the business of the farm and the retiring farmer's entitlement to social welfare should not be adversely affected by the transfer.

Mr. Wilson

That is the most important part.

Mr. Noonan

(Limerick West): The transfer should allow a certain participation by the lessor in farming if possible. The need for land for young and aspiring farmers cannot be over-emphasised but this Bill does not give any hope in this direction. The national plan does not contain any hope either. The main land use problem is the extent of under-utilised land and conditions pushing many farmers into a marginal position. To promote land mobility through leasing is not a simple matter, but very complex. The present policies do not promote it to any significant extent. The problem is aggravated by the lack of job opportunities off the land. There is need for a comprehensive, coherent policy between agriculture, land, social welfare and fiscal policies. At present some of these are hostile to one another. There could be some hope if an attractive retirement scheme could be drawn up and introduced.

We will support this Bill in so far as it goes but it is not the answer to our serious land mobility problem. On returning to government we would have as part of our policy the function of introducing a properly structured, well thought out land Bill which would incorporate all aspects of what I have just outlined. We would take into account in a large way the safeguards and the very fine proposals that were outlined in the 1980 White Paper on land policy. That White Paper had positive land policies and positive suggestions. I recognise that certain changes are needed such as land leasing and the opening of the land market to EC nationals. This last step was inevitable due to our entry to the EEC. The White Paper carefully laid out the necessary safeguards but they are completely absent from this Bill. This party are not against land leasing on a one-to-one basis and we appreciate the useful role it can play. However, I am anxious to avoid a situation where a person or a company could buy up a number of farms and lease them to tenants. This would be a reconstitution of the landlord system.

The White Paper on land policy proposed a whole range of safeguards which have been ignored by the Minister in this Bill. In the interests of the House I will give details of some of these proposals. All purchases of land exceeding £5 rateable valuation should require the consent of the Land Commission. The PLV system has now been shown to be unconstitutional but I am sure it could be replaced by something else such as the adjusted acre system which was to have been carried out by the now defunct Land Commission.

Mr. Wilson

Do not mention that. Everything is nice and peaceful. Even the Minister is blushing.

Mr. Noonan

(Limerick West): Secondly, there should be a surcharge on land purchases by non-farmers and part-time farmers and on full-time farmers over and above a certain rateable valuation. There should be special assistance to progressive farmers to enable them to acquire land. There should also be retention of powers of land acquisition by the Land Commission.

The White Paper stated:

To abandon the compulsory machinery would be to accept, if not encourage, bad husbandry.

Of course we recognise that the good use of land is more important than the ownership but the Minister has removed powers which the White Paper expressly states should be retained to ensure the good use of the land. The Minister seems prepared to adopt a completely inadequate approach without the necessary safeguards. The opening up of the land market to EC citizens was to take place only in the context of these safeguards.

The Minister's approach will be applauded by the monied interests with the fat cheque books, the speculators who invest in land. It will be a cause of concern and frustration to the progressive farmers, to the young farmers who want a chance on the land and to the small farmers. At a time of high unemployment the family farm structure is the best guarantee that employment both on and off the farm in agricultural services, support and processing industries will be maintained to the greatest extent possible. Every effort must be made to ensure that the best possible use is made of every acre of farmland. Methods of taxation and distribution of grant aid must be devised which will encourage farmers to use their land to maximum production. The whole area of land transfer must be tackled. This should include a programme of long term leasing which I have outlined and which should have some financial input from the EEC as well as a contribution from the State.

Greater use should be made of our marginal land and the pros and cons of afforestation should be examined. Some form of farmer-State co-operation might have a role in such an area and might afford the owner a steady income. Such development should have a particular place in small farm areas.

Agriculture is the basis of our economy and it is vital that we optimise every resource, both human and natural. Despite rumours of oil and the growing importance of natural gas our farmland is still our greatest natural resource. Land use and land ownership have always been very emotive issues in Irish life and politics. This can be partly explained by the different motives and viewpoints of people regarding the whole land question.

The most usual view taken of land is as a limiting factor in food production. The use of the available land to maximise production and increase national prosperity is clearly of the utmost importance. The use of land for non-agricultural purposes such as development, forestry, recerational facilities and so on is another area with major implications for the environment and the country. However, it is the question of land ownership and transfer which is most important. The problems of land sale, farm inheritance, retirement and land leasing are all components in this great difficulty. The magnitude of this problem can be appreciated when we see that over the past 20 years the average farm size has increased by only about 8 per cent. This is a very small change considering the major effort made by the Land Commission.

The farm retirement scheme has had minimal effect in getting land into the hands of young progressive farmers. This was mainly because the scheme was not attractive enough to encourage older farmers to transfer their farms. Many who availed of this scheme later regretted doing so as they saw their benefits devalued. In areas, other EC schemes were in effect encouraging and supporting farmers to retain their farms in direct competition with the retirement scheme. This is another area we should look at.

The popularity of the conacre system, where land is rented for 11 months, is not conducive to either land mobility or, indeed, maximising production. Too often this land is taken by larger farmers who can work on very tight profit margins as their home farm partly subsidises the land which they rent. The smaller farmer with a greater need for extra land just cannot compete in this situation. I would like the Minister to look at this area.

There now appears to have evolved a much keener awareness of the advantage of long term leasing of land with the safeguards I have already mentioned. This view has been expressed recently by farmers, the co-operatives, the banks and even by the Government. The real problem arises when we examine how this can be made attractive to both the farm owner and the potential occupier. We have seen some Government Ministers and even the Taoiseach, propounding the view that long term leasing is a good thing but we have heard nothing about the mechanism for getting such a scheme off the ground.

I am convinced that for a programme of land leasing to have a significant effect there has got to be a financial incentive built into the scheme. What type of incentive or subsidy this is to be and where it is to come from is what we should now be discussing. I have no doubt that any funds put into getting land into the hands of our many young progressive farmers would be a marvellous investment for the nation.

The Government should certainly have some financial input into such a scheme. They might also be joined by the lending agencies who would have a lot to gain from an expanding agricultural industry. There would have to be a cast iron guarantee that any assistance introduced would not be suddenly terminated. It must not suffer the same fate as befell the farm modernisation scheme and other schemes introduced by this party — the artificial insemination subsidy, the lime subsidy and so on. This Government must not repeat their performance by setting up farmers in a long term lease with large financial commitments and then pull the rug from under their feet.

Fianna Fáil believe that the major part of any such investment should come either directly from the EC or under one of the Community-backed structural programmes. Specific grants are already available to help young farmers at minimal cost but they have been spurned by the Coalition. This Government have also spurned many other subsidy schemes available from the EC. Such grants and subsidies are commonplace throughout Europe and it is inexcusable to deprive our aspiring young farmers of these supports. I know the Minister agrees with me and he is well aware of these aids which are available to us. He is working under a great strain but these aids could be availed of at very little cost and this would make his task and the task of promoting land leasing here far easier than it is at present.

I believe there is an urgent need for the formation of a small group of top level people representing the farm organisations, the lending agencies, the co-operatives, the advisory and research institutes and the various Government Departments involved to monitor land mobility, land leasing and land transfers. I strongly urge the Minister to set up such a group. This group would quickly draw up a countrywide land leasing programme which could be adopted and implemented — and I stress adopted and implemented. There is no point in producing yet another report to gather dust. Such a group could also issue proposals on the whole question of land sales and land transfers.

The area of land utilisation is of vital importance to an agricultural country like Ireland and a clear and pragmatic policy is urgently needed rather than the pious aspirations we had in the recently published plan. With the recent fall in land prices the time to implement such a scheme was never more opportune. This opportunity must not be missed.

Before I conclude I would like to say that this party have been deliberately and unfairly misrepresented in relation to our policy on land tenure. Let me put the true picture on record. Our policy was clearly and unequivocally set out in the White Paper laid before each House of the Oireachtas in December 1980. We aimed to devise a system whereby as much as possible of the country's agricultural land could be channelled to progressive small to medium farmers who are making the best possible use of their existing holdings and to young persons with acceptable agricultural experience and training. We have been misrepresented in regard to our attitude to leasing. We were the first to propose a standard type of leasing 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. Now the present Government have dropped some of the most important safeguards which we had built into the White Paper.

The compulsory acquisition powers of the Land Commission have been withdrawn. I would remind the Minister that the Land Commission operated as a very effective social safety valve even in otherwise explosive situations. Tensions have already arisen in relation to land in some areas and they could be dangerous if allowed to develop. I want the Minister to be very careful to avoid a new form of landlordism which could be brought about by lack of adequate safeguards in the system.

Over the past few years the conventional wisdom among many in agriculture was that the demise of the Irish Land Commission could not come quickly enough. These calls were of tremendous benefit to the Government who were very keen on eliminating all national aids to agriculture. For that reason, I am not in the least surprised by the recent Government announcement regarding the abolition of the Land Commission.

Undoubtedly changes were needed in the whole area of land use and distribution, but I would seriously question the motive behind the Government's recent decision. I am convinced that the sole reason for implementing this particular cutback is to reduce expenditure for farming.

If one examines the action of the Minister and his colleagues over the past couple of years, their intentions are as obvious as they are despicable. There have been cutbacks all along the line; the farm modernisation scheme was axed, the lime subsidy dropped, the AI subsidy was halved and charges were imposed for farm advice, farm services and so on. Simultaneously we had increases in levies, new charges for farm advice, the closing of the RHE colleges and, of course, the imposition of the super-levy, which now has a chain reaction in farming.

We were promised a Land Leasing Bill which would make a significant impact on land transfer and use. If such a Bill had been introduced then, the scaling down of the Land Commission might have made some sense if its objectives were to be attained by other means. The Bill put before the Dáil by the Government was an absolute disgrace. It was an insult to all those who had heard and believed what the Minister for Agriculture and his junior Ministers had promised. I do not believe that this Bill, as drawn up, will have the slightest effect on land mobility.

It is in this context we must view the demise of the Land Commission. In effect, there is now no mechanism for the thousands of progressive small farmers to acquire additional land. What I find equally disturbing is that there is no awareness at Government level of the serious implications of such a gap in our farm infrastructure. In addition to that, there is the serious situation where large tracts of lands will now be purchased by big farmers, business men and speculators at the expense of the small and medium-sized family farm.

I doubt if the Minister can be satisfied with this present situation and, if he has been pressurised by other Government Ministers into conceding a sop to the Labour Party, then I would suggest that he should now do something urgently to retrieve the situation.

Mr. Sheehan

I welcome the Bill. It is long overdue and I hope it will clear up once and for all the difficulties that inhibit the development of leasing as part of our land tenure system. If agriculture is to make its rightful contribution to the economy — I have no doubt it will, given a proper chance — it is the use to which land is put that will be of importance. It is vital that the rigidity in the system be replaced by mobility. The legacy of our historic land struggle has left us with the most land-locked tenure system in Europe. Our land is occupied by the second smallest proportion of young farmers in the EC and the second largest proportion of elderly farmers in the Community. We also have a growing proportion of part-time farmers. Only in Italy is the situation worse. Therefore, it was vitally important for the Minister to take the onus of introducing a Land Bill that is second to none. We have not had its likes since the foundation of the State.

The need for land reform here is as critical as it was in 1870 when the first tentative measures were taken to replace the landlord-tenant system that operated since the 17th century. That was the result of British colonisation. Today the system of land tenure provides for more than 90 per cent owner-occupancy and this is seriously impeding the pace of structural change in Irish agriculture.

The total agricultural land here is approximately 17 million acres. Of this some 10.5 million acres are in grazing and pasture, 1.14 million acres are in cereals and other crops, 2.6 million acres are in rough mountain grazing and 750,000 acres are in woods and plantation.

Mr. J. Walsh

The Deputy should be in the Department of Agriculture. They need good people there.

Mr. Sheehan

The Deputy may pick up some useful information from those statistics that could help him to bring forward some kind of policy as good as the one introduced by the Minister. However, I think the Deputy will have to go a long way before he reaches that stage. The remaining 2.17 million acres are put to various other uses. There is a general misconception that the massive land resources are mobilised through the land market each year, but that is far from the truth. The reality is that only 400,000 acres, or a mere 3 per cent of the entire acreage, changes ownership each year. Of that amount 84 per cent changes hands by way of inheritance gifts, 14 per cent by way of purchase on the open market and 2 per cent through purchases by the Irish Land Commission. The land market accounts for only 0.6 per cent of the total land in the country changing hands each year and that amount is so small that land mobility is not affected substantially. If we are serious about the problem and about maximising our agricultural resources, we must adopt new measures.

I was amazed to hear Deputy Noonan criticise the good points in the Bill. To my mind it is a stepping stone to a restructuring of land that will bear fruit as far as our economy is concerned. If we are serious about improving land mobility we must try to have new measures to improve farm structures but in a way that will not interfere with the "three F's" that were hard-won generations ago.

Land is a very valuable commodity. I can guarantee my friends across the floor of the House that our planet is not being enlarged. Therefore, it is up to us to ensure that in our part of the planet every acre of agricultural land is utilised to the fullest.

Mr. Noonan

(Limerick West): You never know what may happen in the future.

Mr. Sheehan

The Deputy is a doubting Thomas or he would not have made the remarks he made.

Mr. J. Walsh

I thought the Coalition were to make things bigger and better.

Mr. Sheehan

We will do that in the Deputy's area as well. In Ireland the average farm size has increased by only four acres from 52 acres to 56 acres in the past 20 years. Under whose Governments? Mostly Fianna Fáil. Despite the hundreds of thousands of acres divided by the Land Commission and the 14 per cent reduction in the number of farmers during that period, the average size of the family farm increased by only four acres in 20 years. That is proof of the pudding. The system we operated for the past two generations was futile from the point of view of making viable farm holdings available to the farmers of Ireland.

Sixty per cent of all Irish farms are still less than 50 acres, well below the level of being deemed to be capable of providing a viable income to farmers under the EC directives. Half the farmers of Ireland are over 55 years of age. One-quarter of all farmers in Ireland are over 65 years of age and they account for about 5,000,000 acres of agricultural land or approximately 30 per cent of our total agricultural land acreage. One-quarter of the farmers of Ireland who are over 65 years of age are the owners of 5,000,000 acres of land. They did not get an opportunity to lease their land. They were afraid of the 11-months system. They could not get the tenants out if they remained on for two or three 11-months periods. Therefore the problem remained with us down through the years.

At least we have the guts to tackle the problem. The Minister of State, Deputy Connaughton, brought in a Bill and he outlined in no uncertain fashion that any person who leases his farm need not be worried if it is done under the terms of the new leasing agreement. The statistics I have quoted are clear evidence of the late age of the retirement and succession characteristics of this country. They underline how the owner occupancy of land tenure encourages farmers to hold on to their land to an advanced age and slows up the rate of mobility.

Taking into consideration all the EC countries, Ireland shows the slowest rate of increase in farm size over the past 20 years. In France, Holland and Britain where owner occupancy does not prevail as it does in Ireland, the annual rate of change is five times greater than it is in Ireland. One quarter of all the agricultural land of Ireland is now being farmed on a part-time basis. Of the owners of the 247,598 holdings of over five acres recorded in a survey conducted in 1975 by the Institute of Farm Management, one-half, or to be exact 51.6 per cent, are described as part-time farmers. Breaking the figure down to province level, in Connacht 50 per cent are part-time farmers, in Munster and Leinster 35 per cent are part-time farmers, and in the three counties of Ulster three out of every five farms are run by part-time farmers. Statistics show that the stocking rates on part-time farms are only half those on full-time farms, and the gross output is only half as well.

There is also evidence that part-time farming is increasing. Since 1973, the acreage under part-time farming has increased by one-quarter of a million acres and the number of part-time farmers has increased by 6,000 since 1973. The lack of an invigorating land policy limits the opportunities for entry into farming with the drive and ability required to achieve high level productivity. In view of that, it is essential for us in Government to provide opportunities for our young able farmers to lease or rent land. I hope this will be brought about by this Land Bill which we are now debating.

Farmers tend to hold on to their farms to an advanced age. Heirs are generally in their mid-thirties when assuming control and they retain ownership to a very late age. Irish grassland is a resource with more potential than Whitegate gas, Waterford oil, Navan ore. When the last litre of oil is drained from the Celtic Sea oil wells, agriculture will still play a prominent part in our economy, It was neglected for far too long by successive Governments since the foundation of the State. It is a pity that the slogan of the first Minister for Agriculture, the late Paddy Hogan, of one more cow, one more sow, one more acre under the plough, was not adhered to by successive Governments.

In the late forties, the fifties, and the early sixties we were told industrial development was the keynote to success in Ireland. Alas, what has been the result? Factories closing one after another. We are proud to say that the only factory of any consequence we have in south-west Cork, the Ballineen milk factory is going from strength to strength, built on a solid sound agricultural foundation. It is a pity that the emphasis placed on industrial development was not placed on building up our farmers as they should have been built up to take their place with their counterparts in the EC.

Mr. Noonan

(Limerick West): Have the Government not introduced quotas now?

Mr. Sheehan

We got an increase in our quota and we are the only EC country to get that. We could double, treble and quadruple our farm output, but can this expansion ever be achieved when half of our farmers are 55 years of age, one-quarter are over 65 years of age and we have less than 10 per cent under 35 years of age.

Mr. J. Walsh

What is wrong with a farmer over 65 years of age? President Reagan is doing well and he is over 65 years of age.

Mr. Sheehan

He is not a farmer. He is a film star.

Mr. J. Walsh

He won the TV debate.

Mr. Sheehan

It takes 70 acres of average quality land to provide a reasonable income for a married man.

Mr. J. Walsh

What about a single man?

Mr. Sheehan

His sons may be helping him. Sixty per cent of all farms are below 50 acres of land. That is a sad reflection on the Fianna Fáil administrations down through the years.

Mr. J. Walsh

What about the women? What about the farmers' wives?

Mr. Sheehan

Fianna Fáil finished the farmers' wives. They finished their incomes when they did away with the poultry industry. There are no turkey cheques at Christmas now. There are no turkey cock stations, duck stations or geese stations.

Mr. Noonan

(Limerick West): What about the schools of domestic economy which were closed down?

Mr. Sheehan

The situation facing policy makers is quite simple. They should regulate the land to improve market mobility. Only 0.6 per cent of the land changes hands every year. Change of ownership can come only from early retirement and early inheritance, which certainly stimulate mobility of ownership.

The Norman invasion which brought about the dispossession of the native landlords by English colonists led to the flourishing of leasing. The three classes of tenants were the bó-airí or affluent cattle owner who never owned land, but rented it, secondly, the saor-chéilí or free tenants, and the bond tenants, who were always poor.

Mr. J. Walsh

That is going back a bit.

Mr. Sheehan

In 1923, dual ownership was abolished to prevent a return of landlordism. Today, Irish farmers own 12 million acres of arable land and the stigma of confiscation no longer exists. It will pay Irish farmers of over 65 years of age who own over 5 million acres of land to lease that land under the new land tenure scheme in the sure knowledge that their ownership will be secure.

Mr. Noonan

(Limerick West): What will the Deputy do with those people?

Mr. Sheehan

They will get such a return from leasing the land that it will be of vital importance to their livelihood.

The Land Commission was originally set up under the Gladstone Act, 1881 as a rent fixing body. Then it later developed into a land purchasing agency and later still became a large-scale purchaser and distributor of land. I have great respect for the Land Commission and their work down through the years. They played a useful role in relieving the congested areas. Nobody need remind me. I was not born in the plush surroundings of an estate in Limerick.

Mr. Noonan

(Limerick West): The Deputy is not doing too badly.

Mr. Sheehan

I was born on a congested farm half way up a 1,200 foot mountain.

Mr. J. Walsh

Ah, but they let the Deputy out and he got a seat in the House.

Mr. Sheehan

I was not born in the Golden Vale. If you lost your walking stick in Deputy Noonan's back garden at night time you would not find it in the morning with the height at which the grass had grown. Not alone have the Land Commission failed to keep pace with technological change, but no serious attention has been paid by politicians of any parties for the past two or three decades to keeping in line with the needs of the second half of the twentieth century. As a result, we were left with the Land Commission, a very costly bureaucracy making little or no contribution to land ownership mobility. The greatest culprits of all times were the Land Commission themselves.

Mr. Noonan

(Limerick West): I thought the Deputy was in favour of them a moment ago.

Mr. Sheehan

When they took over the estates they rented them out to farmers with adjoining lands, having neighbours bidding against each other, leading to exorbitant land leasing prices. The Land Commission were collecting the money. They kept leasing that land until the grass roots were nearly pulled up from overgrazing. Was that a sound policy to be continued by a party such as Fianna Fáil? They failed miserably to introduce a Land Bill that would curb that kind of operation.

The cost to the State and the taxpayers of Land Commission staff acquiring an acre of land in 1983 was £400. The 1983 Book of Estimates provided £8 million for the Land Commission, yet only 20,000 acres of land were divided out that year. Furthermore, the Land Commission have a huge land bank still undivided. I admit that the Land Commission were smothered by bureaucracy and what one can call political interference.

Mr. Durkan

That is the man. Keep it up.

Mr. Sheehan

The farmers who most deserved the land sometimes did not get it.

Deputies

Hear, hear.

Mr. Sheehan

That is a well known fact, and Deputy Walsh can go back to his and my constituency and find clear evidence of such things happening. They did happen and Deputy Walsh is pretty well aware of it.

The Department of Agriculture should still retain the right of compulsory acquisition when the commission are so advised by ACOT or where it would alleviate the congestion of small farms. That right should never have been thrown away. I am appealing to the Minister to retain that element of compulsory acquisition in the new Bill.

The State are subsidising the Land Commission with regard to tax differences between the purchase price and the annuity charged, to the tune of £70 per acre. Land must be made available to young energetic farmers. I was amazed at Deputy Noonan's criticism of certain sections of the Bill, on the grounds that landless men and women will now get an opportunity of acquiring land. Does the Deputy want to debar farmers' sons who have been classed as landless men for the past 30 or 40 years of an opportunity of leasing an extra farm and of making a living because their parents might be too young to hand over the farm? These people could lease a farm for ten years and work it as trained farmers. Deputy Noonan should think differently. This Bill will give that type of man an opportunity of making a livelihood out of agriculture, the profession in which he was born and bred and which he loves so well.

The four main points for increasing land ownership among young energetic farmers are: first, farm inheritance from one generation to the next; second, an effective farm retirement scheme; third, that the 858,000 acres of land currently let on an 11-month system be changed to an 11-year system, if possible. That would mean that the 5 million acres of unproductive land will play its part in the economy and we will have a viable agricultural industry and a viable farming population making a living where they should get the opportunity of doing so.

Regulating the open market or sale of land to potential young development farmers is most important. Countless thousands of land-starved, young, energetic, well-trained farmers' sons are being debarred from participating in and making a living out of the land. Therefore, it is most important that the new element being introduced in this land leasing Bill cater for that section. The Land Commission were oriented towards traditions of the past but they had not the capacity to initiate new policies. Apart from a few exceptional instances the commission as such are no longer used to implement public policy. Indeed, you could describe the Land Commission, established 100 years ago, as now archaic because they were muzzled by red tape departmental bureaucracy——

A Deputy

And political interference.

Mr. Sheehan

——and political interference. We should work towards creating as many development farmers as possible who will give us the greatest agricultural output of all time.

Mr. J. Walsh

What are you going to do with it?

Mr. Sheehan

Remember, Deputy, that there is always a policy enacted by a good Minister for Agriculture with his two junior Ministers such as we have at present.

Mr. J. Walsh

Perhaps he will not be here much longer.

Mr. Sheehan

That could be the work of some civil servant appointed by your party. We do not know that until we find out.

Mr. Noonan

(Limerick West): Is there a civil servant?

Mr. Sheehan

Definitely we did not appoint him. We did not get a chance of doing so. Despite the fact that half our farmers are over 55 years of age, a quarter of them aged 65 and both groups account for five million acres of agricultural land, no attempt has been made to introduce a decent farm retirement scheme. One was introduced which did not get off the ground. I would describe that scheme as feeble. It never appealed to the public or the farming community and it was a dismal failure. Only 39 farmers out of a total of 400 applicants accepted the scheme. It was restrictive and unattractive. I was amazed to hear Deputy Noonan say again that that scheme should have been retained. There would be as much good in retaining a lame duck scheme. It proved of very little benefit to the elderly section of our farming community.

Mr. Noonan

(Limerick West): On a point of order, what I said was, as bad as that scheme was, it should have been retained; it was better than no scheme at all.

Mr. Sheehan

I would introduce——

Mr. Noonan

(Limerick West): It is already gone.

Mr. Sheehan

——another good decent scheme that will cater for that——

Mr. Noonan

(Limerick West): I would support the Deputy on that.

Mr. Sheehan

——and I will be appealing to politicans to bring in a decent farm retirement scheme whereby elderly farmers could be induced to hand over their farms to their sons and daughters and have some little income available to them. Such a scheme should be brought in where it would not interfere with social welfare pensions that would accrue to people of that age. Too many benefits were lost by the people participating and that is why the scheme introduced never got off the ground. Therefore, a new, invigorating scheme is needed.

We need also to broaden our horizons if any of the five million acres owned by farmers over 55 years are to be mobilised for restructuring. It is estimated that 858,000 acres are rented each year by farmers. That is almost one million acres. The attractive features of legalised land letting are as follows: (a) long term leasing allows freehold ownership to be retained (b) it encourages long term planning and development (c) it allows the leasing farmer to invest in farm development rather than in heavy commitments to farm purchasing (d) it guarantees the land owner a realistic rent for a fixed number of years. Demand for land leasing comes from three categories: (a) productive farmers with small acreage (b) sons and daughters from average sized farms where the parents are still young, and (c) landless young farmers who qualify through farm apprenticeship schemes or other EC classes, and I ask Deputy Noonan to take note of that.

The master lease agreement offers a number of attractive elements: (a) the owner gets a reasonable income; (b) it gives the tenant security over the land which he has leased; (c) it guarantees rent reviews and an arbitration structure for any dispute; (d) it allows specified improvements on rented farms; and (e) it allows financial adjustment for improvement work on farms.

Another major aspect inhibiting land division is the question of commonages throughout the west in particular from Malin Head to Mizen Head. Coming from that area of south-west Cork I know only too well the serious inhibition commonages are to developing fully the mountainside of that area. As well as that, it is very bad for the eradication of cattle disease to have herds of perhaps nine or ten different neighbours grazing on the rough mountain pasture slopes unprotected and mingling with one another. Surely in the interests of disease eradication this is not practical for agriculture. It is a well known fact that if those mountain commonage pastures could be divided and fenced in then the farmers who own them would be enabled to maintain, fertilise and lime them properly and get a better income from that part of their farms which is not playing its role as far as the income from such holdings is concerned. Therefore, I ask the Minister to consider seriously the need for the division of commonages and if at all possible to include it in legislation within the Bill or in future legislation.

It is important that where the majority of shareholders of a commonage agree to the division the rights of the majority of those land owners should be taken into consideration, and the Department should be empowered to make the necessary division to satisfy everybody concerned. As I have said, one million acres of land is being let under the 11-months system here in Ireland. Why not let it for a period of ten years instead of 11 months? This would have a major effect on income from that land.

I should like to refer to the leasing of land in Europe. In France and Belgium tenants have the right to pre-emption in the case of sale while in the Netherlands they have the right of first preference to buy on the open market. The normal tenancy period in France and Belgium is nine years and in France in special cases long term leasing of 18 to 25 years is legal. Such leases cannot be renewed when the tenant reaches the age of 65. The legal tenancy period in the Netherlands is six years for parcels of land and 12 years for viable farm units. The tenancy limit in Germany is nine to 12 years while the normal period in Italy is 15 years. The latter applies to what Italians describe as coltivatori diretti, the direct farmers. In Belgium 71 per cent of land is leased while in Holland 48 per cent of land is leased. In France 46 per cent of agricultural land is leased while in Britain 47 per cent is leased. A total of 29 per cent of agricultural land is leased in Luxembourg while in Germany 22 per cent is leased. In Italy 18 per cent of agricultural land is leased but in Ireland 6 per cent is leased. If it is practical to lease that amount of land in other EC countries it must be practical to do so here. I have no doubt that when this Bill is in operation our percentage of leasing will increase to the European average.

The Minister for Finance in his budget earlier this year rightly extended for a further year the stamp duty exemption in the case of the transfer of land to young farmers. We introduced that scheme and I appeal to the Minister for Finance, and the Minister for Agriculture, to continue it if at all possible for a further five years, or at least for the duration of the plan. The scheme has proved of great benefit to young farmers. It was a great attraction to those parents anxious to hand over their farms to their children most of whom had completed an EC farming course and studied various methods of farming.

Deputy Noonan expressed the view that the Bill would not help solve farming problems but I challenge him to outline what his party has done in the last two generations to alleviate the problems. By their actions they will be judged. It is obvious that his party did not do anything to arrest the problem. Minister Connaughton has tackled that difficulty. The Land Commission served a useful purpose but in latter years it was bedeviled by red tape, bureaucracy and political interference. It is well known that the staff of the Land Commission will be incorporated into the Department of Agriculture. I have no doubt that they will give keen advice on land leasing and other matters relating to land. I have no doubt that any future directive in regard to land issued by the Department of Agriculture will have been approved by the former officials of the Land Commission.

Deputy Noonan announced that the Bill did not contain a shred of mobility. My response to that is "There are none so blind as those who do not wish to see". All Members must be aware that this is the only piece of legislation that has been introduced since the foundation of the State that will create the mobility needed for viable agricultural production. It is amazing that such statements can be made here. It is an indication that some Members do not realise the importance of the legislation for the agricultural community. My advice to Fianna Fáil is to face up to their responsibilities. The Government have a responsibility to produce legislation dealing with land leasing. It is the responsibility of any genuine Opposition to support such legislation and ensure it works for the benefit of Irish farmers.

Does Deputy Noonan want to leave the five million acres of land that are lying idle in such a condition for the next decade growing briars, bushes, thistles and ragwort? Is that his policy for the furthering of agriculture? Any person with common sense would welcome this land legislation with open arms and respond by saying, "God bless you Paul Connaughton for such well needed legislation". I was amazed to hear Deputy Noonan say that the only thing that the Coalition did in the last 18 months was to eliminate the lime subsidy and cut the AI subsidy in half. It is well known that his party when in power in 1982 in formulating their budget proposals had taken a decision to eliminate all lime and AI subsidies. It was fortunate that they did not get an opportunity of including that in a budget. The Coalition are paying half of the AI subsidy out of the national Exchequer to help farmers. I should like to ask Deputy Noonan if he is aware that former Deputy James Dillon was responsible for bringing up the lime content of our soil. In 1948 he got the lime lorries rolling to the fields of Ireland and kept them rolling for almost 35 years. He realised the importance of lime to our soil. A lot of lime has been ploughed into the land of west Cork since James Dillon got the first lorry load rolling in 1948. I can guarantee the Deputies opposite that it will be ploughed into that land in the not too distant future.

I should like to praise the Minister, Deputy Connaughton, for his sound and virile approach to a problem that has existed for a long time. Men of the calibre of Deputies Paul Connaughton, Minister of State at the Department of Agriculture, Paddy Hegarty, Minister of State, and Austin Deasy, Minister for Agriculture are the only salvation farmers have today if there is to be some future for agriculture. Remember that it is better to light a match than curse the darkness. Remember that the first step forward has been taken with the introduction of this Bill for a Second Reading.

This Bill will bring about the formation of a sound agricultural policy. It will bring about the dream of many a farmer for the past two generations who has been crying out for a land policy. Above all 5,000,000 acres of land, which has been lying dormant and not playing its part in the economy, will become mobile.

Mr. J. Walsh

It is not easy to follow that speech which was well interlaced with statistics relating not only to Ireland but to Europe. In his speech the Minister of State spoke about promotion. I compliment him on what he has done in the last two years. I have no doubt he is sincere and has put a lot of hard work and hours in providing a land policy. As long as the present attitude of the Department of Finance exists the Minister will be promoting himself and his policy because there will be nothing but hostility from that Department. That was shown clearly in the caveat they entered into the four year plan for agriculture when they said that everything was alright as long as it did not cost money. Unfortunately for farmers and the agricultural industry, the Department are calling the tune and it is not a very pleasant one.

I welcome the measures in the Bill to remove some of the obstacles to the early transfer of land. Land leasing is very attractive to young farmers. The money which would be spent on the outright purchase of land can be put to better use in developing the holding in question, stocking it and so on. It is better to lease or rent a farm for a number of years from a neighbour than to purchase one outright with the help of a bank or the ACC who are not very pleasant landlords. They hold the title to a considerable amount of property. I would prefer to see a neighbour leasing his land to a young farmer's son. Lease arrangements could be drawn up which would be mutually satisfactory.

The measures in the Bill will give adequate safeguards to both the lessor and the tenant regarding the return of ownership to the lessor on the expiry of the lease, fairness of rent, provision for review of rent and some compensation for the lessee who provides farm buildings or improves the holding in some way. There is also provision for arbitration in case any differences arises between the lessor and the lessee.

Not enough land is available either by way of conacre or letting. It accounts for roughly a million acres. The vast bulk of land is either underutilised or transferred too late in the day for young people to make use of it. Positive encouragement must be given in this area if we are to make progress. It was disappointing for everyone, including the Minister who has put such an amount of work into this, that some measures were not introduced in the recent budget or Finance Bill which would have given positive encouragement to people to make better use of land and to transfer it earlier. That area must be tackled and is a prerequisite to a successful leasing system.

At present there is virtually no encouragement for people to give up their land. The social welfare system generally does not encourage it. The farm retirement scheme has not been a good experience for people in that annuities did not keep pace with social welfare benefits and allowances. Until we have a system which makes it attractive for landowners to transfer their land we will not make any real progress in better utilising land. A farm retirement pension scheme is obviously vital. People who are 55 or 65 years of age are often very willing and anxious to hand over, if not the ownership, the management of their farms to younger people. However, when they apply for the non-contributory old age pension, the pension officer is not very impressed with any legal arrangement to transfer management of the farm. Ownership has to be transferred also. This is a constraint on the transfer of farms, especially family farms, to young people.

A considerable amount of land remains underutilised but if the tax arrangements were in any way favourable, owners of such land would be willing and perhaps, very glad, to transfer its management. Land policy must be all about putting the management of land into the hands of dynamic young farmers who are prepared to implement new ideas. Deputy Sheehan tells us that we could quadruple our output of beef and milk. Since we are in a considerable bottleneck with the level of production on both those counts, I see no prospect of increasing the output. I should hope that when more land is taken over by younger people they would be innovative and engage in the kind of quality produce for which there is a market, even if that means engaging in new areas of produce instead of depending on the old system. There is a market for the good food that can be produced from the good land we have. A stroll around any supermarket either in Dublin, in west Cork or elsewhere will convince one that we import a considerable quantity of food which could be produced at home. I should hope that the transfer of the management of land to younger people would mean a discontinuance of the importation of such massive amounts of food. We are importing foodstuffs to the value of about £800 million. That is shameful. The success of any scheme that may be drawn up for the better utilisation of land will depend on the better utilisation of the produce from that land. It is not good enough to produce more and to have all the young dynamic farmers getting the best from every acre if we expect the taxpayer to subsidise the produce in some way, whether by the system of intervention or of exports to third countries.

An essential element of any land utilisation policy must be a well co-ordinated food policy. If the country needs anything more badly than that, it is some degree of co-ordination of the various aids to agriculture. In some cases there are even conflicting schemes. We do not need more plans or proposals but we do need some indication of where we are going in terms of agriculture. In this way the farmers, the processors and the people marketing the produce as well as the Department will be on the same wavelength. I shall not delay the House by going into detail on that aspect but unfortunately it is an area that is very much unco-ordinated.

Provided that our land resource is used properly, it is a very valuable asset. We have about 12 million acres of land and if one takes an estimate of about £1,400 per acre we are talking of a renewable resource of the value of about £16 billion. Utilisation of that resource must be a prime consideration in terms of Government policy. To the extent that the legislation before the House will have the effect of dismantling some of the legal constraints on the mobility of land, I welcome it. There are some fairly timid steps in the direction of land leasing being taken by a number of co-operatives and they are to be lauded for their pioneering work in this respect. It is a typically Irish situation that there are a number of master leases available. One hopes that when this matter is finalised there will be a single master lease and that there will no longer be the situation that, as the late Brendan Behan might have said, the first item on the agenda for every meeting represents a split or a difference.

I wish the Minister well in his tussle with the Department of Finance regarding going a step further and encouraging the better utilisation of land and of land produce. This will not be easy having regard to the attitude of the Department of Finance. I should hope, also, that when a proper leasing scheme is available most of our farmers, particularly those in the west, will still be in farming. I say this because I am not convinced that the present client-based advisory service policy for the 40,000 to 50,000 best farmers is in the best interest of a land leasing or a land utilisation programme. That policy is outlined at page 10 of the four-year plan for the development of agriculture. It is spelt out clearly also in the proposals for the National Planning Board and more recently in the national plan. I submit that those farmers in the top sector could very well afford to pay for any advisory service they might need. Let us not forget the other 100,000 farmers who are less well off and who are operating within such constraints as lack of finance, poor quality land and so on. Are we to cut off essential advisory services to those farmers? Anyone in ACOT or in any other such body would reply that there will be a service available to everybody. We cannot have it both ways. We cannot provide an advisory service for everyone who requires it and at the same time have a priority client-based list. In the Castletownbere Peninsula, for instance, the adviser has been replaced by an answering machine. That is no substitute for a good sound agricultural adviser who goes out to a farm and advises a young farmer who is either taking over a farm from his parents or is leasing one from a neighbour.

There will be other constraints following the recent developments in respect of the super-levy quota. It appears that the quota will be based on farms. That means that if a lessee is interested in a farm in respect of which there is no quota, he will have problems in the event of his wishing, for example, to transfer some of the dairy herd from his parents' farm. One would hope that some national reserve of the milk quota would be provided both for people leasing land for the first time or for landless people wishing to engage in agriculture. That is an essential part of any land policy which wants to utilise land in a comprehensive way. Developments which take place in any aspect of farm production, especially in milk production, have to be catered for. I hope and expect that to allow leasing to flourish and to make an impact here some percentage of the quota under the super-levy arrangement should be made available to younger farmers.

There are many other aspects of the farm retirement scheme to which I should like to refer but the main element is that farmers should be encouraged to retire earlier and not debarred from social welfare benefits. Some of the ancillary benefits to social welfare benefits are as attractive as the benefits themselves in some cases. In cases of under-utilised land the lessor should get some kind of tax advantage. I was very pleased to find in the proposals for a plan that there was a recommendation that there should be a tax break on income earned by people who lease land to younger farmers. It was disappointing that that radical recommendation was not incorporated in the final plan Building on Reality but perhaps the architects of the plan did not feel it was a realistic proposal. It would encourage people who want to lease land to get some kind of tax break for doing so. I ask the Minister to look at that recommendation again to see if it could be included in future policy.

Of course there should also be provision for people who give up land for leasing to be able to invest the money in some body such as the ACC or some other agricultural finance agency, again with a tax break on the money invested because we all know that if you invest money with any of the commercial banks or the ACC you are penalised for doing so once you earn £50 in interest. There is no encouragement; the farmer might as well hold on to the land and do subsistence type farming on it rather than leasing it and putting the money into a financial institution. People leasing land should not be penalised for investing their money and I hope facilities will be made available whereby bodies like the ACC could give preferential interest rates for the money and make it available to give new impetus to farming at a reduced rate of interest.

I cannot see why the ACC could not have lending facilities available for young farmers in the same way that local authorities or building societies have for people buying new homes. It should be possible to get long-term, fixed interest at reasonably attractive rates for younger farmers because, with the best will in the world, there is no way in which a landless young man can stock and develop a farm of a size which would be necessary to provide an income without reasonable finance at a reasonable interest rate. If you take even 50 to 60 dairy cows at £600 each as an initial investment, you are talking about a sizeable amount of money and with current interest rates, especially those which applied over the last year, it would not be possible without incentives to have a meaningful land leasing and land utilisation policy.

As the previous speaker pointed out, there is quite a lot of data available on land leasing in other European countries and it is quite common there. Owner occupancy is peculiar to the extent that it is 90 per cent in Ireland. The best of the incentives and encouragement in Europe should be looked at and applied to Ireland. The policy of encouraging increased production and better utilisation of land will lead to catastrophe if there is not a concurrent policy of better utilisation of the products from farming. A national food processing and marketing policy is a vital and necessary adjunct to the policy of land utilisation.

Regarding tax concessions and other elements causing constraints on the transfer of land, there was a measure in the Finance Bill on capital acquisitions tax which brings me back to the uncoordinated approach to everything nowadays. It will do nothing for the transfer of land. The cumulative thresholds under the capital acquisitions tax will certainly discourage the transfer of land to people outside the immediate family. A threshold of £150,000 for an inter-family transfer is attractive but when you talk about nephews or relatives outside the immediate family there is a threshold of £10,000 or £20,000 with pretty severe rates of tax also which is no encouragement to a land owner to transfer his property to younger people. For a comprehensive land policy, to encourage earlier transfers and to make it possible for owners nearing retirement to make the transfers, they must not be penalised to the extent that they are at present under the provisions of the Finance Act, 1984. That is an area which must be taken care of under a meaningful land policy and I would hope that when the legal constraints of this legislation are out of the way those aspects would be tackled.

I welcome the provisions of the Bill but I must express my disappointment that there is not positive encouragement by way of tax and other incentives for early retirement, earlier transfer and the uptake of available land by younger people. This financial encouragement is vital because too little land is coming on the market. To make any kind of impact nationally we must tackle the underutilised land in the hands of people who for one reason or another are unable to work it.

Mr. Dowling

I welcome the opportunity of contributing on this Bill. I compliment the Minister of State for all the effort, thought and hard work he has put into this important aspect of agriculture since he came into office almost two years ago. The Farmer's Journal and all newspapers carrying reports on agricultural activities highly praise his endeavours in this regard and it remains for this House to discuss the Bill and give it support.

It has been suggested by those opposite that this is a feeble attempt to promote the mobility of land. That is a matter which can be better gauged at some future stage. It is a very welcome exercise. It is the first time that any Minister has had the courage to face what is regarded as an extremely sensitive area without causing ripples or failing to make a start in achieving what was originally intended.

The Bill is a legalistic document designed to eliminate some of the anomalies that might arise if land leasing were to proceed along the lines that have been suggested in various model leases. The second part of the Bill is a tidying up operation in relation to the Land Commission.

We are all too familiar with the landlord and tenant system, the effect it had on the farming scene and how it retarded the growth of farming well into this century. The system was completely dominated by the landlord up to 1860 and the complete and dominant control was watered down until at the turn of the century several small Acts mentioned in this Bill, sections of which are now being repealed, gave almost total control to the tenant. The landlords felt that the tenants had more control of the land than they had and the 1903 Act gave most of the land to the Irish farmers.

We had an annuity system which was tackled in the thirties. While at the time it caused severe ripples on the farming scene and almost brought about the collapse of farming, nonetheless there was a great measure of justification for the approach of the then Government in that regard. We had a situation where land was held almost totally by the farmers themselves. We are now faced with the difficulty of transferring that land so that it can be properly utilised by energetic, able young farmers.

There is a deeply held concept that under no circumstances should a farmer be put in a position where his land is under threat. Therein lies the difficulty in relation to the leasing of land. The 11-month system has been useful and most land which is not used directly by a farmer is let out in that way. Deputy Sheehan gave an interesting list of statistics in relation to the leasing system which operates in the EEC and elsewhere. For this scheme to be successful we will have to eliminate the threat of land being confiscated by the lessee at the end of the day. The Minister has given that assurance categorically in the Bill. Anybody who wishes to engage in the leasing process need have no fears with regard to getting the land back at the end of the period of the lease. The point has been made by those opposed to the Bill and opposed to the concept of leasing that we are going back to the days of the latter half of the nineteenth century when the landlords were in control. If that fear is put into the minds of people who have land we will never succeed in achieving the objectives of this Bill.

It behoves politicians and farming organisations to support the scheme because it has much merit. It will ensure that land which is grossly underutilised will be put to better use. Various incentives must be provided to ensure that it will be attractive to the person leasing the land but the major difficulty lies in the fact that the farmer must feel secure as the owner of the property. Land is sacred in the minds of most people and very few people will sell land purely for the sake of it. Therein lies the difficulty for this Bill. The modern attitude is one of caution. Caution has been expressed by the major farming organisations but a good PR job has already been done. I had hoped that the Bill would have attracted more farmers to consider the leasing of land.

Debate adjourned.