Seanad Éireann debate -
Thursday, 18 Dec 1947

Vol. 34 No. 20

Rates on Agricultural Land (Relief) Bill, 1947—Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Parliamentary Secretary to the Minister for Local Government (Mr. Childers)

The purpose of this Bill is to extend the Rates on Agricultural Land (Relief) Act, 1946, for another year. Senators will recall that that Act was intended to apply to two years and it would cease to have effect on the 31st March next year unless continued. Senators will recall that the Act of 1946 was passed following on an announcement by the Minister for Finance that he was providing an additional £1,000,000 towards the relief of rates on agricultural land. This Bill is a demonstration of the Government's desire to assist the agricultural community and, in particular, to assist them through the difficulties which they face at the present time. Towards the end of the war, the rates on agricultural land increased considerably as a result of increasing costs of all local services and, equally, because the number of services had constantly increased. Farmers have very great need to improve their land, to restore its fertility, and the Minister for Finance in the course of his speech referred to the desirability of helping the farmers to pay increased wages to agricultural workers.

The Agricultural Grant became stabilised in 1935-36 at the figure of £1,861,000. There was no variation in the grant in accordance with the increase of rates levied on land. I should like to give the House a few figures showing the effect of the Agricultural Grant upon the rates levied on agricultural land under the heading of general charges and excluding the small amount of special charges provided for sanitary and other amenities in different areas. In 1938, the net amount of rates paid upon agricultural land was £2,054,388. By 1945-46, it had risen to £3,058,170, or roughly from £2,000,000 to £3,000,000. In 1946-47, it was reduced by the application of the new grant to £2,392,716, and in 1947-48 it was estimated that the net contribution under this head will be £2,751,271. Agricultural rates rose to their maximum figure in 1945-46. There has been a reduction since that time of some 10 per cent.

The contribution in respect of the current year is estimated at the very high figure of £3,165,427, or roughly £10 per farmer or £1 per head of the population. The improvements in the Act, which is being continued, were, firstly, that the Agricultural Grant varies with the general rate levied upon agricultural land, and therefore the Government contributes in increasing degree to farmers if they have to face increasing rates. The general principle upon which the Act was based is as follows: A primary allowance was granted on valuations not exceeding £20 and on the first £20 of all valuations of three-fifths of the general rate levied upon agricultural land. Then a secondary allowance was given on valuations over and above the first £20 of one-fifth of the rate levied for general purposes on agricultural land. Thirdly, an employment allowance was provided of 10/- in the £ on all valuations above £20, but it was limited to £6 10s. 0d. per man employed.

The effect of those three allowances can be seen in the Estimates for the current year. The primary allowance resulted in a contribution to the small farmer, and on the first £20 of all farmers of £2,036,000. The secondary allowance, which provided relief for larger farmers, totalled £514,000, and the employment allowance totalled £615,000. I should add in this connection that, in Section 3, the latest date for the receipt of applications for the employment allowance has been advanced to the 15th October, 1948, so as to facilitate an earlier estimate of the cost which the Department of Finance will have to meet under this head.

As I have indicated, this is one of a number of measures designed to assist farmers to increase their production. We have had the loans given to farmers whose stock has been destroyed by bad weather. We have announced a system of grants for out-houses, we have had the commitments under the recent trade agreement with England, and we are also making this further rate contribution. The Minister hoped that this very heavy contribution towards the rates might be reviewed, assuming that normal conditions would prevail, but normal conditions have not yet arrived by any means and the restoration of normal conditions relating to agricultural production is likely to be very slow in taking place. The actual position is that the value of farm output in 1938 was £44,000,000. In 1946 it had more than doubled, that is, it had reached £95,000, whereas the rates on agricultural land had increased only by 35 per cent. in the intervening period, indicating that the Government had made a definite contribution to assist the farmer to get over the difficulties caused by the war. As I have said, output values increased by over 100 per cent. and the rates on land increased by only 35 per cent. in the period from 1938 to the present day.

The House might be interested to hear some figures, in regard to the rates levied on agricultural land as a percentage of the agricultural income of the country. The agricultural income is calculated by the Department of Statistics and one can say that, in respect of the comparison between one year and another, it gives a general indication of the position. In 1938 the rates levied off agricultural land were 5.6 per cent. of the agricultural income calculated for that year. In 1946 when the agricultural income was £95,000,000 the rates levied off agricultural land were 3.2 millions, a percentage of 3.3 per cent.

Mr. Duffy

Is that the net rate after allowances?

Mr. Childers

Yes. In 1947 if we assume that the income was £90,000,000—it may be less or it may be more; let us assume that it was £5,000,000 less than the 1946 figure owing to the weather conditions—the rate contributions are estimated at 2.4 millions and the percentage of rates in relation to agricultural income was 2.6 per cent. Even if my estimate is exaggerated, it still shows that the Government, as I have said, has made a contribution towards the farmer. One effect of this very large assistance granted to farmers is that it should be easier for local authorities to improve local amenities. Either in relation to sanitation or any other measures, it should be possible for them to levy a general county-at-large charge and not to have recourse to a special charge, with all its accompanying difficulties and the difficulties that are experienced in persuading people in a particular area to pay extra for amenities.

The present Bill should also encourage farmers to improve their buildings with the aid of the grants that have been made available to them, encourage them to employ labour at better wages, if the Agricultural Wages Board so decide, and to overcome in general by gradual stages all the difficulties with which they have met in past years. I might say that in the Dáil some Deputies regarded land as the raw material of the farmer. There is no foundation for that view. In our opinion, land is an asset of the farmer, a capital asset, and the fairest way to enable people in our local communities to contribute at least something towards the provision of local services is by levying some rate in proportion to the amount of land they own. The question was asked why, if land was derated in Great Britain, land should not be derated here. The answer to that is that the proportion of value in respect of buildings in England as compared with land is very much greater than here. Sixty per cent. of the total valuation of this country is in respect of land and 40 per cent. in respect of buildings. I think I have indicated to the House the general nature of this Bill. As I have said, it embodies one of the many contributions made by the Government in aid of the farmer. I recommend the Bill with great enthusiasm because I am glad we have been able to continue these grants, and I hope the farmers of the country will take the fullest advantage of them.

Mr. Baxter

I do not know that the Parliamentary Secretary has any justification for being enthusiastic in repeating this year what he did last year. I wonder why he is doing it. Does the Ministry feel that this is a tremendous concession to agriculture or do they feel that the agricultural industry is in such a plight and that agricultural rates are rising so steeply that something must be done about it? I do not think that agriculturists feel that it is out of the goodness of their hearts the Government are making this contribution. The farming community do not feel that this is any great concession. The Parliamentary Secretary has given us a number of figures. If I had a little time and if I knew these figures were to be given, there are very good answers which I could supply to them. The Parliamentary Secretary is rather good at handling figures in his own particular way for his own particular purpose but he did not present us with all the figures that are necessary to have a complete picture of farming conditions as they are at the moment. He gave us figures in regard to rates and the contribution of the State over a number of years towards the relief of rates. He gave us farm incomes and percentages of the farm incomes in the various years that had to be set aside by way of payment of rates. But were there not many other payments which farmers had to make over all these years which the Parliamentary Secretary could have given, which he did not give and which he should have given if he were presenting a fair picture of what farming conditions are like? Rates have risen and are rising, more steeply in some counties than in others. Agricultural wages have risen much more steeply over that period and all farm costs have risen in the same period. The cost of farm equipment of every kind, where it is obtainable, is 150 per cent. higher than it was some years ago. Farm costs and living costs—all these have risen for the countryman just as they have for the townsman.

He must wear boots and clothes and obtain all the other essentials. Put these, in addition to the other outgoings of the farmer, along with his rates and see what picture you will get; see what demands are on the incomes of the farming community and you will then be in a better position to get an approximate idea of farming conditions to-day. The burden of local rates is getting beyond the capacity of the rural community to bear. Say what you like about the Central Fund contribution, but the general experience is that the higher the contribution from the Central Fund the higher the demand on the ratepayers.

I had an experience in my county the other day when there was an intimation that a grant would be available for certain road works on the condition that we would be prepared to levy against our rates next year the equivalent of about 5d. in the £. We could get a grant if we were ready to raise the rates next year by an equivalent amount. That is the effect that most of the grants we get have on the local rates.

The Parliamentary Secretary said that in the other House some Deputies argued that land should not be taxed because it was the raw material of the farmer. He says the Government point of view is that there is no foundation for that and that land is a capital asset. It may have been a capital asset 50 years ago but it is now reduced to the condition of a raw material that would require to have a great deal added to it before it can again become a capital asset. The exploitation of the land over the years has impoverished it to the extent that it is quite impossible for science to measure the impoverishment to-day. All that we have stolen out of the land during the past 50 years is so incalculable that seven-eighths of our farmers who have an appreciation of what soil fertility means are at their wit's end to know how to build up fertility again and so make their land once more a capital asset.

Side by side with a situation like that, requiring immense capital investment, we are confronted with problems relating to the improvement of roads, increased expenditure on mental homes, problems of such magnitude that they are positively frightening for the ratepayers and the local authorities, who have to determine what burden they will impose on the ratepaying community to meet these charges. I do not know what the Parliamentary Secretary knows about it, but the land could not be restored to the condition it was in 12 years ago even by the expenditure of hundreds of millions. It is with that derelict raw material we are expected to work and earn incomes out of which the increasing burden of rates will be paid.

The Parliamentary Secretary talked about the Government's contribution to local rates. I looked over figures in my own county and here is the effect in Cavan of your contribution—other counties may be different: The rate in 1943 was 12/6; in 1944, 12/6; in 1945, 13/2; in 1946, 13/7; in 1947, 16/7; in 1948, 18/-, and I think in the coming financial year it will be £1. I think that is a state of affairs that every county councillor in the country can corroborate. Perhaps in some areas the conditions are worse, although I think the figures that I have given are bad enough. In Cavan, we are as cautious in the spending of money as people in any part of the country. We try to get the best value we can. In our council we do not approach our problems in a partisan way. We look at the whole scheme of administration to see what we can do. I have indicated the picture with which we are presented.

The Parliamentary Secretary may tell me how magnaminous the Government are in the amount of grants that they give us, but I can give you figures to show the serious position in which the farmers find themselves. I know the Parliamentary Secretary may ask "What is the net amount which the farmers are paying?" I can produce figures of a holding to show that the amount has gone up correspondingly with the demand made here. Other counties may be different, but I doubt if they are very much so.

Our road problem is a colossal one and the restoration of our roads will be a very costly process. During the war many materials could not be obtained and the roads were allowed to deteriorate. Will the taxpayers be expected to reconstruct and recondition the roads? Apparently that is what the Parliamentary Secretary expects us to do or he would have been prepared to advance more money. What about the extra charges for mental homes? In our joint institution in Cavan and Monaghan wage increases will mean an additional £11,000. It is the same all over the country.

This is a very disturbing situation for people engaged in local government who take their responsibilities seriously. There are on local councils a certain number of people who are passengers, but there are others who are responsible persons. They want to face their obligations and give the best service they can to the community. They keep in mind the capacity of the people to pay. I do not think the Central Fund contribution is adequate to meet the cost of local services.

The Parliamentary Secretary gave us the income—apparently a greatly increased income—of last year as against what it was in 1938. Conditions were not good in 1938 because farm incomes were low. We all know that even that very high figure of £90,000,000 represents probably the lowest level of production that the farms have ever put on the market during the lifetime of any of us. In my judgment, the physical production of our farms is falling. I do not see much possibility of an increase in the volume of production for a number of years. You may have inflated prices, but it is a queer commentary on the way society organises itself that you can have higher prices when you have low production. That is not a satisfactory condition of things, but that is the position we are faced with —low production and no possibility of increasing it unless by immense capital expenditure that is not readily available to us.

The Parliamentary Secretary told us the contribution that is being made for the improvement of farms and farm buildings. He urged on us the employment of labour and expressed the hope that we would be able to employ labour at rates of wages even higher than the present wages if the Wages Board were prepared to recommend that. It is one of the great problems to-day to find labour for anything. It is probably the country's greatest problem. It is the problem that is limiting physical production and will continue to limit it until some remedy is applied.

The Parliamentary Secretary may be enthusiastic about what he is doing. He may feel that he is gracious and generous in the sum he is presenting to local authorities. The bald fact remains that local authorities everywhere are facing an impossible situation. The amount of capital necessary at the moment for reconstructing, rebuilding and reconditioning our roads is altogether beyond the capacity of the local ratepayers. From the point of view of cost, the position is very disturbing for local representatives. I hear the view expressed by some of the most vigorous Government supporters in Cavan County Council that the stage has been reached when the demands on local ratepayers are beyond their capacity to bear. I do not think that fact is appreciated. Despite what the Parliamentary Secretary says about the size of the grants, the fact remains that in most counties, where grants have been increased, rates have risen accordingly. What is the remedy for that? It may be said that farm incomes have risen correspondingly but, if you deduct from the total of farm incomes, the total outgoings and charges against it and assess what is left for the farmer out of which to pay the rates, and if you consider that there is a diminished number of people in the rural areas to find the income from which this is to be drawn, you will have a picture of the situation that is created. Fewer and fewer people are left to carry an ever-increasing burden. It simply cannot be done and, whatever the Parliamentary Secretary may think about the dimensions of the grant he is making available to local authorities, I do not consider that it is anything like adequate to the needs of the situation.

Mr. Duffy

One of the things that always strikes me as being peculiar about this Bill when it is introduced periodically is the fact that it always seems to have a limited life. This Bill carries on the tradition. It provides certain relief for local rates to the 31st March, 1949. It will then expire. That has been the scheme year after year. When this Bill is introduced we find that it is to carry on relief for another year or two years. When I saw that idea originally I thought the intention was that it would be a stop-gap, giving immediate relief to the agricultural community until the Government would frame some more adequate measure, some more comprehensive scheme for reorganising the entire agricultural industry. Evidently that is not a correct view of the position. Ministers do not even pretend that there is any plan or scheme in contemplation for putting agriculture on a better basis, in other words, on a profitable basis. Obviously, this is not a plan. This idea of feeding the dog with its own tail is surely not a plan for agriculture.

We collect from the community £2,000,000, or £3,000,000, and we hand it back in the form of grants to the local authorities so that they may remit some of the rates which the farming community would be required to pay in the absence of such grants. That is not a remedy for anything. The farmers are paying this money in any event. It may be that they are paying it in a different form. They pay it when they buy an ounce of tobacco or drink a pint or go to the cinema or the dog track. There is no external gold mine out of which this country lifts £3,000,000 per year for the relief of rates. It is lifted in the form of taxation, levied annually in the Budget or, in an exceptional year like this, when things get bad, in a Supplementary Budget.

It is no boast for the Parliamentary Secretary to come here and tell us he is giving large sums of money to the farming community. If one were to draw the natural conclusion one might be expected to draw from the figures which the Parliamentary Secretary read out, one would feel that in a short time the contribution of the farmer in the form of rates would be expressed by a minus sign.

Senator Baxter, of course, drew attention to the other side of the picture, that the actual cash payment demanded from the farmer in the form of rates has increased from 20/- to 27/6, or thereabouts. The Parliamentary Secretary may be complacent and tell us that this is a small percentage of the proportion of the national income attributable to agricultural production. I wonder what will happen if the value of agricultural production declines. Will the demands of the local authorities decline? Will the demands which are being levied on the agricultural community for the upkeep of roads, the maintenance of hospitals and institutions of various kinds, diminish, merely because the volume of agricultural production declines? I do not think so. I think the Parliamentary Secretary would find, if the present Government were to remain in office and were to continue its present policy in relation to agriculture, that the proportion of the national income attributable to agriculture which is consumed in rates would increase steeply and would increase to breaking point.

I do not want to enter into this discussion between the Parliamentary Secretary and Senator Baxter as to whether land is a raw material or a capital asset. We should recall that none of us created the land. It is the one thing that was created for us and was given to the children of men for their enjoyment and sustenance. I have a notion that if we use our land intelligently, there ought to be a good living for all the citizens of this country. We have heard the statement over and over again that there are four acres of land per head of the community. By the use of modern science, by intelligent cultivation, by fertilisation, by organisation of markets, four acres of land would be capable of yielding a good living to a human being. An average family, let us say, consists of five members. Therefore, the average acreage per family is 20. That, it seems to me, is an area surely adequate to maintain a family of five on a better scale than anything we know of in large parts of the country. Our whole approach to this land problem seems to me to be fantastic. Senator Baxter talked about the derating of land. I am almost aghast that this is the only country on God's earth where people, professing some knowledge of economics, should advocate the relief of land from rates and yet have no objection to the levying of rates on houses and on other improvements.

Mr. Baxter

I do not think the Senator heard me use the word "derating".

Mr. Duffy

I apologise if I have misrepresented the Senator.

Mr. Baxter

The Senator has misquoted me.

Mr. Duffy

I know that the Senator does institute comparisons between what is done in this country and the foolish things that are done in countries like Great Britain, where land is derated. Surely, if there is one thing in the world on which taxation should be levied it is this gift which God has given to all men. Is is not obvious that that is the source from which we should derive our income? The improvements which are effected by our agriculturists and by our people on the buildings they erect are the things which should be relieved from rates. I am firmly convinced that there is going to be no satisfactory adjustment of local taxation until we make up our minds that there will be no taxes on the improvements which we effect in our property, on the houses we build, the new windows we put in or the stables we build. All these things are intended to improve the amenities of the community and the effectiveness of our agriculturists and should be free of rates.

We have this relief of rates, part of which, of course, is given as an inducement for the employment of labour. There is no obligation, however, on the farmer to pay an adequate wage to the workman he employs, and if he employs his own children he probably pays them nothing. We are giving relief from what? We are simply tricking ourselves if we give away a sum of money in answer to an agitation which we do not understand and which we make no effort to meet.

Many things could be done for agriculture with this sum of money which would be much more beneficial for our agriculturists and the community than what is being achieved now if we were to spend it in providing fertilisers free or almost free, or in providing transport, free, or almost free, to take our agricultural products to the markets in good condition and to bring to the farmer lime, fertilisers, farm implements and the other things which he needs. If we were to do that, I suggest that we would be giving very much more service to the farming community than simply by doing out certain sums of money in an unfair ratio as between one class of the farming community and another. The person, for instance, whose land is highly valued and who is in comfortable circumstances gets very substantial relief under this scheme, but the poor cottier or small farmer in Donegal, Kerry or Connemara gets a flea bite out of the total sum allocated. I am sorry if I have held up the House, but I am raising these points with the Parliamentary Secretary in the hope that, if by any misfortune this Government should be returned at the next general election, there will be a new approach to the whole problem of agricultural organisation and of the manner in which relief is to be brought to the agricultural community.

Mr. O'Dea

Senator Baxter's speech took me completely by surprise. As a representative of the farming community one would have thought that he would have cheered when he heard set forth the proposals in this Bill and of the numerous grants that are to be given for the relief of rates. But, instead, he says it is not enough. Nothing is enough. What does the Senator think of the sum of over £3,000,000 given each year to bring about a reduction in the rates? That is a colossal sum. Senator Duffy referred to it as feeding the dog with a bit of his own tail. Was there ever such a misdescription? Senator Duffy, I am sure, knows pretty well that the farmers practically pay no income-tax, and that this money which is given for the relief of rates is provided for the farmers from the Central Fund. The farmers are treated with the greatest possible consideration. They have fixed prices for wheat, barley, oats, beet and practically every agricultural product. They are getting sums of money for their produce now that they had never dreamt of before. I know it is impossible to get wheaten straw at 6/- per cwt. or £6 per ton. I remember the time when it could be bought for 9d. or 10d. a cwt. and when, possibly, you could get it for nothing if you would cart it away. In the turf areas people are making fortunes from turf, and along by the sea coast they are making fortunes from seaweed. A man told me a year or two ago that he could not come in to see me on a very important matter because he was engaged making £5 a day on the sale of seaweed. There was never so much money in the country as there is to-day, and yet, when everything is being done for the farmer, we are told that not enough is being done for him. I think it was in 1935 that the Government first introduced this scheme for the relief of rates. It was about that time that they doubled the agricultural grant.

Mr. Baxter

They put it back to the figure at which it was before they came into power.

Mr. O'Dea

No, I think they doubled it that year.

Mr. Hayes

The boys had put a big burden on the rates previously.

Mr. O'Dea

I do not want to go into that. If I were to do so we might put the boot on the right foot and show who was accountable for that, as I did on more than one occasion. This Government, anyway, have done everything possible to help the farmer. I do not know what more they could do. Senator Duffy asks why not give the farmers fertilisers. Are not fertilisers being purchased for them? The Government are providing big grants in order to reduce the price of fertilisers for farmers. He also asked why not give them lime. The county committees of agriculture provide free lime to some farmers. As a matter of fact, they would not take it when it was offered to them.

Mr. Baxter

I had never heard that they were given free lime.

Mr. O'Dea

I do not know what more could be done for the farmers than is being done for them. This is a Bill which, I think, should receive a very great welcome. It should be received with applause.

Mr. P.J. O'Reilly

The presentation of the Bill gives an opportunity to the Parliamentary Secretary to explain some rather peculiar anomalies. In connection with a Bill before the House some time ago, I made some inquiries, and I found that some towns are eligible for this Agricultural Grant while others are not. I also found that comparing towns with comparatively small populations with those of larger populations the proportion of relief in respect of rates on agricultural land allowed in the case of smaller towns is, in some cases, considerably less than that allowed in the case of larger towns. That anomaly was continued in that Act. It seems to be very curious that this measure should be limited mainly to land outside urban areas. Why should not relief be given in respect of agricultural land in all urban areas under the Act? I have not gone very closely into the matter recently, but if relief is given in respect of agricultural land situated in some urban areas, perhaps the Parliamentary Secretary would give the figures regarding such relief. There is no logical reason why a man carrying on agricultural operations in an area styled urban should not get relief just as the man carrying on similar work outside does. Perhaps the Parliamentary Secretary will explain the situation as I have found very peculiar circumstances associated with this whole matter.

There would appear to be some justification for the suggestion made by Senator Duffy, that, instead of an Act continued from year to year as at present, there should be one definite comprehensive measure governing the whole arrangement. There has been a good deal of talk about the benefits derived by the farmer from Government sources, the Central Fund and so on, but does the whole thing not boil down to a very simple point that, if you highly rate the farmer, he must in turn increase very largely his prices and therefore people who might save in the form of income-tax will have to pay in another form? It is only throwing dust in the eyes of the people to make claims regarding these grants which will not bear examination. Payment must be made in one form or another. They are a kind of dole in a way and normally should not be necessary. The proper method would be to secure decent prices for the farmer and let him stand on his own feet—enable him to pay as everybody does. If we do not pay in the form of increased prices, we do in the form of increased income-tax and so, on balance, things would be essentially the same.

Mr. Childers

I do not propose to enter into a long discursive debate on Government agricultural policy, but I should like to make a few observations on certain things which have been said here. In relation to growing charges for health services, Senator Baxter seems to have forgotten that the Minister for Health is now going to pay the increased cost of health services until the State contribution is equal to the contribution of the local authorities, so that that is a form of additional benefit. Secondly, the Senator spoke of the rates increasing in County Cavan. Unfortunately, I have not got the figures for the rates levied off agricultural land by counties over a period of years but, although some farmers may have to pay more on their agricultural land, I think that far more will be paying less, or the same amount. In a recent publication by the Roscommon County Manager, he gave an example of the effect of the Agricultural Grant on a farm valued at £17 10s. 0d., no person being employed on it. The net amount payable, on a rate of 13/9, was £7 1s. 11d. in 1943. In 1948, on a rate of 17/4, this farmer paid £6 1s. 0d., so that in fact they are paying less. If one examines the totals of the rates levied, I think it can be said that a very large number of farmers will certainly not be paying any more than they paid three or four years ago, and some will pay less.

Senator Duffy asked what was going to be the general policy of the Government with regard to this rate relief. So far as I know, the Government intend to continue the primary and secondary allowances. They had thought it might be possible to reduce this amount in respect of the employment allowance —that would be something like £615,000 out of a total of something over £3,000,000—but that was because we anticipated the establishment of normal conditions. One would think, listening to Senator Baxter, that I had no conception of the difficulties through which farmers are passing. I am well aware of their difficulties. I represent an agricultural community, and I go down there and see the farmers. I quite understand the position of farmers who had to till their land year after year and face appalling losses during the winter. My whole point was that this was in aid of their difficulties and a number of other contributions had been made by the Government to help them.

A suggestion was made here that fertilisers should be given free. The Government are giving considerable grants towards fertilisers. If one were to examine the additional grants given by the Government which relate directly to the improvement of the soil and the maintenance of the fertility of the soil, one would find that in the current year a total of £1,250,000 is being granted in respect of subsidies for fertilisers, for lime, for repair of farm roads and drains under the rural improvement scheme, bog development work schemes, minor relief schemes and the very large grant of £350,000 for the farm improvements scheme. In addition to that, large sums are contributed by the State in order that farmers can secure a reasonable price for their turf and further sums are being expended for turf development generally. All in all, one could say that, exclusive of a number of different grants, at least £6,000,000 is being granted this year to encourage the development of the soil and its fertility, the production of turf and to enable farmers to repair their roads.

Senator Duffy suggested that the rate relief was of no fundamental value to the farmer. He should propose a resolution advocating the abolition of the rate relief. He would soon get his answer from the farmers. Every person in an agricultural community well knows the one difficulty faced by the farmer is the paying of the rate, the big sum he has to give out and the measures he has to take to save the money—the selling of portion of the stock for the payment of the rate. The psychological inducement to the farmer of rating relief is enormous and farmers, I feel quite sure, appreciate it. Although the contributions from the central fund have to be defrayed from taxation, I do not believe the farmers are under the impression that they pay the whole of the £3,000,000 in the form of increased taxes. They know well that it is spread over the whole community—manufacturers, retailers, wholesalers and people living in towns—and that therefore it should result in a net assistance to them, even though it must be admitted they are bound to pay some small portion of it.

The whole of the rating relief principle is meant to enable the farmer to increase his production and to reduce the first heavy net charge upon his production, a factor which he appreciates. The total rates, as I have already indicated, leviable off agricultural land have decreased since 1945-46 when they went down from £3,000,000 odd to £2,750,000. I consider that an excellent thing, and if farm income should decrease as a result of a fall in prices, we will at least have the consolation of having, in the first instance, reduced the percentage of rates levied off agricultural land as a percentage of farm income, so that, if farm income should fall, the effect will not be so serious upon the farmer.

Senator O'Reilly asked a question about urban districts and boroughs. The Local Government Act, 1946, regulates the rating of land in urban districts and boroughs on a uniform basis. In boroughs, three-quarters of the valuation of land is assessed to the municipal rate. In other urban districts, three-fifths of the valuation is assessed to the municipal rate. Where an urban district was created or extended since 1898, the agricultural grant is paid into the municipal fund. There is a transition arrangement by which all land in urban districts will gradually be brought to the common standard.

Mr. Baxter

Where a borough was created before 1898, is any relief at all given?

Mr. Childers

They get three-quarters.

Question put and agreed to.

Committee Stage ordered for Friday, 19th December.

The Seanad adjourned at 10 p.m. until 11 a.m. on Friday, 19th December.