Vol. 487 No. 8
9 Mr. J. O'Keeffe asked the Minister for Agriculture and Food his views on whether an increasing number of farm family members are declining to take over the land; and the proposals, if any, he has to encourage the continuance of the family farm tradition. [5092/98]
The majority of Irish farms continue to be family farms. According to the CSO's labour input survey, 149,300 out of a total of 149,500 farms in 1996 were family farms. The proportion of people working in agriculture remains very high by EU standards. A total of 301,000 people, including 287,200 family workers, work on farms on a regular basis, working the equivalent of 223,400 full-time jobs.
It is true that the number of farms has declined in recent years, in line with the trend in all modern economies and industrialised countries. The number of farms declined by 12,200, or 7.5 per cent, between 1992 and 1996. However, 65 per cent of that reduction was accounted for by farms of less than ten hectares. It must be acknowledged that in our thriving economy, other types of employment may prove more attractive to young people than a career in agriculture, especially on small uneconomic holdings. The Government has committed itself in An Action Programme for the Millennium to "ensure support for the maximum number of family farms". This commitment is being carried out through actions to maintain farm incomes and to encourage the early transfer of land to young trained farmers.
In 1998, there will be an increase of 17 per cent, to more than £71 million, in funding for the farm retirement scheme. The scheme's original target of 7,000 participants was met by December last year. This scheme has made, and will continue to make, an important contribution towards encouraging the transfer of land to young trained farmers.
There is a wide range of taxation incentives in place to encourage young people to enter farming. Full stock relief is available for young trained farmers for a period of four years after qualification. There is a reduction of two-thirds in the stamp duty payable on farm transfers to young farmers. Other concessions in relation to capital acquisitions tax, probate tax, capital gains tax and land leasing are designed to encourage the early and orderly transfer of farms to the younger generation.
In addition, the huge increase in direct payments to farmers in recent years has contributed to maintaining farm incomes and thus keeping people in farming who would otherwise have left. Direct cheques in the post payments to farmers in 1997 amounted to a record high of almost £941 million.
In the context of Agenda 2000 one of my main objectives will be not only to protect farm incomes, but to seek to maximise the income of all farmers, particularly those on smaller farms, and to ensure that the appropriate structural measures are in place to support family farms.
A young farmer from the Cavan end of my constituency, with 44 acres and 21 cows, contacted me today.
Where was Deputy Boylan?
The farmer is not allowed to increase his quota and, to eliminate pollution, must erect a farm building this year. While I enjoyed the Minister's long answer, if young farmers are to stay in farming they must——
Deputy Crawford, ask a question. The purpose of Question Time is to elicit information from the Minister, not to impart it.
When will the Minister reintroduce the grants to control farmyard pollution and for dairy hygiene works? Those questions must be answered if young farmers are to stay on the land.
Both those questions will be taken later. Many young people are leaving farming. Governments over the years have sought various ways to limit that exodus, but it has proved very difficult. Everyone knows that if an older member of a family gets a job, a car, a girlfriend or boyfriend and can go on holidays to the Rose of Tralee, Lisdoonvarna or perhaps the Spice Girls concert, younger members of the family will want to do likewise. Many young people go on to third level education, which is very desirable. It is extremely difficult to retain young people on farms, but everything possible is being done under various programmes and schemes to target payments at particular farmers.
It is installation aid that counts.
Deputy Crawford should not interrupt.
It was a pity the dairy hygiene and the control of farmyard pollution schemes were terminated. We have sought to redress that problem. I am pleased the Finance Bill provides for an increase from £20,000 to £30,000 that can be written off for farmers who have had expenditure under the control of farmyard pollution scheme. That is desirable and I was pleased to be able to persuade the Minister for Finance to do it. I recognise it does not cater for everybody.
It is no use to the 21 year old farmers.
It would be desirable to have a scheme in place for the smaller farmer. The scheme of installation aid for young farmers was inadequately funded. However, we encouraged the Minister for Finance last year to provide additional moneys of £64 million in a supplementary estimate to cater for many of the applications under that scheme. This week with my officials I will meet representatives of Macra na Feirme to draw up a new targeted scheme with a view to reintroducing the scheme of installation aid for young farmers. It is essential to provide incentives to encourage young people to enter farming.
On the farm retirement scheme what progress has been made in the enlargement clause and the income qualification criteria — two negative aspects which militate against a greater take-up of the scheme? Will the pilot rural renewal scheme have taxation incentives? Given that the Minister for Finance did not refer to it in his Second Stage contribution on the Finance Bill I hope it will be provided for on Committee Stage. Will the Minister urge his colleague, the Minister for Finance, to provide tax incentives to entice farmers to stay on the land? Will he remove the anomaly in inter-farm leasing of the taxation implication for the transfer of farms from father to son or daughter that does not exist in non-farm related activities?
I have discussed the pilot rural renewal scheme with the Minister for Finance and asked if it could be extended to the south but I got a negative response. However, the Minister is enthusiastic about the scheme and it is his intention to have it extended further. It is a worthwhile pilot scheme and there will be tax incentives for people in all pilot areas. If successful the scheme will be extended.
In relation to rural development generally, my colleague the Minister of State, Deputy Davern, has set up an interdepartmental committee to produce a White Paper before the end of the year. The first meeting of that interdepartmental committee took place this year. Inputs from Members, organisations, rural communities and people concerned are welcome. Some 7,000 people have availed of the farm retirement scheme and this has helped in getting younger people into the management of farms. I recognised at an early stage because of my contact with farmers that the two elements which caused the difficulty were the enlargement clause and farm income. I raised this matter with Commissioner Fischler from whom I hope to receive a positive response. The initial reason for the enlargement clause was to consolidate holdings. It has had the opposite effect — people in Cork have bought land in County Mayo, County Waterford and in other parts of the country and so on. They do not want the land for the farm retirement scheme but they afforest or put it to some other use. It is a cost and an impediment to the scheme and I hope to get a positive response from the Commissioner on that matter. This makes a nonsense of keeping rural communities together. If part-time farmers who work with the Office of Public Works, the county council or Coillte do not make more than 50 per cent of their income from farming it is a nonsense.
Given that I do not have up to date information on inter-farm leasing I will certainly follow it up in a future Question Time.
If we table an amendment to the Finance Bill will the Minister support it?
We will give it our wholehearted support.
If the Deputy provides the details I will be happy to pursue it.
On the matter of the farm retirement scheme it is reported in today's issue of the Irish Farmer's Journal that the enlargement clause will be changed to a work units clause. One of the problems with the installation aid scheme was that young people tried to increase the work units. Will the Minister clarify whether the scheme will be based on work units or the enlargement clause, given that one is as difficult as the other? Last week the Minister gave a commitment to reintroduce the installation aid scheme and suggested it will take a new format. Will that format be broader than the previous scheme and when will it be introduced? Will the grant be increased? The IDA grant for the creation of a new job is £11,000 yet the installation aid scheme grant was only £5,600.
I am not in a position to comment in detail on the first element of the Deputy's question since I do not have the official paper. There are leaks of the official paper but I do not have the Commission's proposals on Agenda 2000. My understanding is that the new criteria will involve the viability of the farm and I am not sure whether it will be based on work units. However, I am aware of the difficulty which the labour units created for the scheme of installation aid for young farmers and I will seek to avoid those difficulties. In relation to the scheme of installation aid for young farmers the first meeting took place with Macra na Feirme this week. I hope agreement can be reached on the format of the new scheme in the next few weeks, to make it as attractive as possible for them. Young farmers will have a major input into tailoring the scheme.
