Seanad Éireann debate -
Wednesday, 12 Jan 1949

Vol. 36 No. 5

Agricultural Loans and Grants—Motion.

Mr. R.M. Burke

I move:—

That the Seanad is of opinion that the loans and grants provided for farmers under existing schemes are inadequate and suggests to the Government that in order to be effective for the purpose for which they are intended, loans for the erection or improvement of farm buildings, the betterment of land, the improvement of live stock and the purchase of machinery and equipment should be made available to whatever extent is required at low rates of interest.

This motion mentions both loans and grants together, but most of what I have to say this evening is in connection with loans. The grants provided under the Farm Building Scheme and the various other schemes are fairly good, but the loans obtainable are very inadequate. A farmer who happens to be fairly comfortably off—such as a farmer who has an income from sources other than agriculture—may be able to carry out any improvements he desires on his farm without looking for loans from anyone. The people about whom I am concerned are the farmers with small or medium sized holdings, many of whom cannot afford to put up much money themselves. Some of them actually owe money already to the Agricultural Credit Corporation or to the bank, or both, and it is all they can do to find enough capital to carry on each season, to get manures and seeds, with the help of the various local authority loans schemes. What we are considering here is loans for longer periods, for the types of improvements mentioned in this motion.

Many people are inclined to say, in connection with this matter:

"What about the Agricultural Credit Corporation and the Department of Agriculture loans schemes?" I believe that those schemes, while very good so far as they go, are inadequate, that the rate of interest is too high, and that that deters many farmers who need money badly for improvements to their farms from carrying out those improvements. They feel that they do not wish to saddle themselves with a loan, in case they may not be able to repay it within the time limit allowed by the Agricultural Credit Corporation, after allowing for the rate of interest which they have to pay, which is still 4½ per cent., as it has been for a number of years. It is sometimes said that the grants in most cases are fairly substantial, but those grants are absolutely useless to a farmer unless he has sufficient money himself, or can borrow sufficient money, to put with the grant, to carry out these various improvements which are needed. In addition to the rate of interest being too high, many farmers find that the limit of time laid down by the Agricultural Credit Corporation is too short. They would like that the period should be extended in certain cases and I think that is a reasonable suggestion.

Again, it has been my experience, and that of various other people to whom I have spoken on this matter, that many farmers are not inclined to apply at all to the Agricultural Credit Corporation, because the rumour has gone round that to do so is only wasting their time, the reason being that so many farmers have applied and their applications have been turned down. They feel that the only people, as a rule, who get loans from the Agricultural Credit Corporation are those who are fairly comfortably off. I am not saying that that is a correct statement with regard to all cases, but that is the impression many farmers have. They believe that a farmer with a small holding, who is not very well off, finds it extremely difficult to get loans from the Agricultural Credit Corporation. I think this argument alone would not be sufficient and, therefore, I propose to give, very briefly, a few figures to show that the work of the Agricultural Credit Corporation has been comparatively small.

According to the 21st Annual Report of the Agricultural Credit Corporation, the total amount of loans issued, since they started business approximately 21 years ago is £3,000,000, and the average amount of a loan £108. The total number of loans issued is 27,919, or an average of approximately 1,300 per year. Actually, during the past year and a half, they have issued 1,516 loans or an average of about 1,010 in the year. That shows what a comparatively small amount of business they have done in proportion to the total number of farmers. There are, I believe, well over 350,000 agricultural holdings in the Twenty-Six Counties. If you divide 28,000 loans over all those holdings, it means that in the last 21 years only about one farmer in 13 has got a loan. During the past year, or during the average year, only one farmer in 270 has succeeded in getting a loan from the Agricultural Credit Corporation. That shows they have been able to assist only a comparatively small number of farmers and that there is a very large number who need loans who have not been able to get them, for various reasons.

The next point I would like to touch on, very briefly, is the need for more loans. Many Senators have referred, in various debates on agriculture, to the under-capitalisation of the industry. In that connection, I think Senator Sweetman made a very important statement not so long ago, and several other Senators also spoke on the subject of the under-capitalisation of agriculture. To what extent are loans necessary? That may be a debatable point, but one authority, Dr. Henry Kennedy, estimated that, on pre-war values, at least £200,000,000 would be needed. On pre-war figures, he estimated £58,000,000 for land improvement, £98,000,000 for housing of stock and other farm buildings; £23,000,000 for equipment and machinery; £22,000,000 for improvements and addition of live stock and £15,000,000 for water supplies. That does not include afforestation and various other things.

If it was over £200,000,000 before the war it would probably be between £300,000,000 and £400,000,000 now. Some people actually estimate that over £400,000,000 would be required before agriculture in this country was sufficiently capitalised. When I refer to that latter figure I recognise that that would be over a very long period. There would be no possibility of such large-scale improvements being carried out in a short time. I submit, however, that it is up to us, during the next four years, to make strenuous efforts to improve our agricultural output. Some of you have probably read the White Paper about Ireland's programme for the next four years in connection with the organisation set up for European economic co-operation, issued by the Minister for External Affairs. In that programme it is pointed out that it is most desirable that this country should try to increase agricultural output substantially during the next four years—that is between now and 1953—after which date we may be obliged to depend very largely upon our own efforts to finance imports. I believe, therefore, that during the next four years we should do everything in our power to increase agricultural output. In order to do that, I believe that we must spend more money than is being spent at the present time on the improvement of land, agricultural buildings, agricultural machinery and equipment, and agricultural stock.

I do not suggest that we should encourage indiscriminate borrowing by farmers, or borrowing by them for unwise purposes. I believe that this is a case where wise borrowing and the spending of money on really useful projects would be worth while from the national point of view as well as from the point of view of the farmers. It has been stated, with regard to a wisely administered loan system, that there is no other known method of achieving so much for so many by such simple means.

Some people tend to the belief that this motion is purely for the benefit of the farmers and the agricultural workers. Some people are tempted to say "Oh, the farmers are always asking for more." I do not blame the farmers for asking for more. In the past the farmers have never had a fair share of the national income. I submit however that this motion would benefit every section of the community. It would benefit the people in the cities and the towns because the principal object of these loans would be to increase agricultural output, thereby increasing our food supply and our national income. These loans then would benefit the entire community.

The question may be put as to why the farmers cannot get loans when industry as a rule can get as much as it requires. There are four main reasons for that. One reason is that in the past industry has always been a more paying proposition than agriculture. Many industries pay dividends of from 5 per cent. upwards. In some cases as much as 20 per cent. is paid.

Mr. S. O'Farrell

Income tax.

Mr. R.M. Burke

I think that that is far too high a rate of interest altogether. In some cases the farmer would only be able to pay 1, 2 or 3 per cent. on his capital outlay. Because of that it is only natural that capital should tend to go into industry rather than into agriculture. We do not find private individuals lending money for agricultural improvements. I think that is the principal reason why the Agricultural Credit Corporation was set up. Again, if an individual wants security, he prefers to invest his money in something like national loan. If he wants a high rate of interest he invests it in industry. Very few are prepared to invest money in agriculture.

Another argument that is sometimes adduced against lending more to the farmers is that certain farmers already have a certain amount of money in the bank. I think it is very desirable that a farmer should have a certain amount of money upon which he can fall back should the necessity arise. It would be advisable for every farmer to have some reserve against a time of emergency. The number, however, who have money in the bank is very limited. I am not talking now of those farmers. The people for whom I advocate these loans are the smaller farmers who have no capital, or very little capital, and who need money to improve their holdings.

Another reason for lack of capitalisation in agriculture is the difficulties with which farmers are faced when they try to borrow. I do not suggest indiscriminate borrowing. Neither do I suggest encouraging farmers to borrow money for unwise purposes. Under a wisely administered loan system technical advice should be given to the farmers as to the best form of capital investment. Many farmers would be glad of such advice. In connection with the present drive for increased egg production and increased poultry, illustrated leaflets have been distributed to the farmers showing what can be done in the poultry industry. I think that is a very sound move. If loans were made available, illustrated leaflets and booklets would be desirable in order to give the farmers some idea of the type of improvements and the type of capital investments which are most desirable from the point of view of the nation.

A further argument sometimes advanced against additional credit for farmers is that there might be too many applicants if the rate of interest was reduced. If there were too many applicants surely it would be possible to have a priority system whereby loans would be given to those farmers who are most in need of them and whose holdings would benefit most by increased capital expenditure. At the present time the farmer who either has money, or can borrow it easily, can improve his farm. The poor farmer cannot get sufficient even though his need may be greater.

I do not wish to detain the House much longer, because many other members will be anxious to express their views on this subject. I would emphasise in conclusion that this proposal is not put forward simply for the benefit of the farmer. It is true that I would like to help the farmer to improve his income and the income of all agricultural workers, but this proposal is put forward primarily to help the nation as a whole by endeavouring to increase our agricultural output per acre and per man hour, and to increase our national income. In that way we would be able to raise the standard of living in the country as a whole.

Mr. McCrea

I wish formally to second this motion. There are so many people anxious to give it their support and blessing that I shall reserve my right to speak on it until later.

Mr. Counihan

I move:—

To delete all words after the word "that" where the word occurs in the second line of the motion and substitute instead the words:—"the most effective way of providing adequate credit for farmers would be by the issue of land bonds to the amount of the capitalised value of the remitted land annuities; the bonds to bear interest at the rate of 4½ per cent. per annum and be repayable over a period of 58½ years at 4¾ per cent."

I would like to correct that figure of 58½ years. Upon looking up the Land Acts I find that it takes 66 years to clear off a loan at 5 per cent. interest and sinking fund. I agree with a lot of what Senator Burke said, but I must say that my amendment is entirely in the interests of the farmers. The amendment is in no way opposed to the motion. I agree that Government loans and grants are entirely inadequate to meet working capital for the farmers to enable them to carry on and the interest charged on these loans, if and when they can be obtained, is entirely too high. Any farmer who had the experience of applying for loans or grants from Government institutions will agree that there are too many questions, too many inspections and too much red tape before a loan will even be considered, and then the chances are that the application will be turned down. My proposal will get over all that, as it definitely fixes the amount which a farmer will receive. I believe this amendment will go a long way to meet the working capital needed by farmers. It will secure for the farmer a loan at the lowest possible rate of interest which can be obtained from any quarter and it can be secured without costing the taxpayer or the Government one penny.

The scheme is based on a clause in Hogan's Land Act of 1923 which provides that a landlord may offer for sale his demesne or his home-farm land to the Land Commission and the Land Commission may take that land at an agreed price and pay the landlord in bonds bearing 4½ per cent. interest. The whole amount of the advance was to be repaid to the Land Commission at 4¾ per cent. interest over 66 years. I think it will be agreed that the Land Commission annuities for land purchase under any of the Land Acts were reasonable, but to meet losses and compensate the farmers for what they suffered during the economic war, the Government passed legislation in 1933 halving the land annuities.

My proposal is that those halved annuities be capitalised at 20 years' purchase and given to farmers in the form of land bonds bearing interest at 4½ per cent. and repayable in 66 years at 4¾ per cent. For example, a farmer whose annuity was £10 before 1933 is now paying £5. The remitted £5 capitalised would give him a bond for £100 for which he would pay £4 15s. 0d. a year, but as he is receiving £4 10s. 0d. interest on the bond, the actual cost to him of his £100 bond would be 5/-. If he lodges this bond in the bank he would be able to get credit to the full value of the bond. He would get that credit at one time at 3 per cent., but it might be 3½ per cent. now. I did not consult any directors, but I was told that a farmer with that bond in the bank would get accommodation at as low a rate of interest as would be given for any gilt-edged security. If he lodges that bond in the bank he may want only the full amount for seven or eight months in any year. If he had his credit at 3 per cent. or 3½ per cent. it would mean only 2¼ per cent. or 2½ per cent. for seven or eight months. I believe that most farmers would consider that rate of interest reasonable.

It has been said that the Agricultural Credit Corporation would give to a credit-worthy farmer all the working capital he might require. I do not think that is so. In some cases possibly they would give a good deal more; they would give three or four times as much as I am asking for if the farmer was well recommended to the Agricultural Credit Corporation. Let us look into what the charges would be. If a farmer borrowed £100 from the Agricultural Credit Corporation for the purchase of seeds or manures, it would be lent to him for five years and the charge would be about £22 in the way of interest and sinking fund for that five years.

Mr. Duffy

Per cent?

Mr. Counihan

Yes, £22 per cent. per year for five years. If he borrowed it for the purchase of stock, he could get it for seven years at £16 16s. per cent. interest and sinking fund. If he borrowed it for funding a loan or building, he could get it for the longest term, which is 35 years, at £5 14s. 2d. per year. When the farmer who borrowed for 35 years has paid his £5 14s. 2d. per year in two half-yearly instalments, he will have paid £200 gross to the Agricultural Credit Corporation. He will then be completely cleared of his debt. If my proposal were accepted, he will get his £100 and in 35 years he will have paid £8 15s. to the Land Commission and he still will have his bond, which will be worth the £100 and perhaps a good deal more. I think that is a big consideration which any farmer would be well advised to consider seriously.

I suggest that these bonds should be used only as security for obtaining credit from the banks, that they may not be sold except where the borrower defaults, and then only with the permission of the Minister for Agriculture or the Minister for Finance, and that they should not be subject to any drawings for redemption for at least 25 or 30 years. That would avoid any cornering in the bonds and would give no opportunity to speculators, to "bulls" or "bears", to make a profit out of the bonds as they could not be sold.

It has been said that the farmers do not require extra working capital. I say they do. As Senator Burke has pointed out, in the recommendations of the post-war commission—I am not going into that matter as I think he has made the case fairly clear—Dr. Henry Kennedy suggested, and it was agreed to by most members of the commission, that £200,000,000 working capital would be required to put farmers on their feet. It would increase output in every branch of agriculture by at least 50 per cent., with proper attention and a liberal supply of artificial manures, drainage and other improvements. I can instance one division of land of eighteen Irish acres. In November, 1947, the farmer spent about £50 for basic slag for use on that land. Prior to that, that division would not feed more than 18 cattle. It is of course fairly good land that will feed a beast to the Irish acre. In 1948, the farmer was able to put his cattle on the land in the month of March but instead of 18 cattle, he was able to feed 24 cattle for most of the year. He got more than his £50 back in 1948. That shows that with proper attention to the land we could increase production by at least one-third.

All this, of course, depends on the provision of working capital. Senator Burke suggested that there should be restrictions in regard to inspection. I am in thorough disagreement with that. I say that this is a cut and dried scheme to give the farmer, who wants it, his land bond for the amount of the remitted land annuities. There is plenty of security on which he can be paid the amount of the remitted land bonds. People may ask: "Will the farmer pay?" Many of the professors of course will say: "The old farmer will pay nothing" but if you look at the debts of the Agricultural Credit Corporation or at the number of defaulters under the Land Commission you get your answer.

I have made inquiries and I have heard that the defaulters of over six months since 1933 would not be more than .02 per cent. The same thing applies to the Agricultural Credit Corporation. Yet people now say: "The farmers will not meet their liabilities." Of course they are not as cute as some of the city people, some of the manufacturers, who if they do owe a debt, call together a number of their creditors and get them to accept 2/6, 3/- or 5/- in the £. The farmer never does that. He pays his full debt no matter how long it takes him to clear it off.

I think the Minister should consider this proposal which will obviate all this work of trying to induce bankers or anybody else to give credit to the farmer. He can go into a bank with his chest out and say: "There is my bond. I want to get the full face value of it as credit." That would then be advanced to him at 3½ per cent. or at whatever rate may be fixed.

Mr. McGee

I second the amendment.

Mr. Sweetman

I have been described by Senator Burke as a man who made a pronouncement, but on this occasion I am going to make what I think is the pronouncement to which he referred and which inadvertently he thought I had already made. I think I said that a model T Ford will not do the job which a Rolls Royce can do. I am satisfied, whatever be the reason for the position to-day, that the machine that is to be asked to do the job, the ambitious job set out in the White Paper issued by the Minister for External Affairs, is a model T Ford. I think for that reason the Minister must decide for himself whether that machine is lacking in a single thing which can make it go better or modernise it. I am perfectly satisfied again, without stating why it should be so, that what that machine lacks is a ready supply of credit. We have heard the amount by which agriculture needs to be re-capitalised to bring it up to date. I know the present Minister for Finance in this House a short time ago was inclined to suggest that the farmers had that capital in their own hands. He was inclined to suggest that the farmer might well spend that capital and do the job which we all agree should be done. I do not agree with that and I do not agree that the farmer can be expected to do the very necessary job of recapitalising on the present rate of interest charged him.

We have no modern statistics to show what a man may earn on his capital as a farmer but we have frequently seen, and can easily see, what is earned on capital in business or ventures of other kinds, such as those to which Senator Counihan referred. The nearest thing to a system of costings and finding out what may be earned on capital invested in a farm, was supplied by Professor Murphy in North Cork some years ago when it was found, to the surprise of everyone, that the greatest figure that could be shown by way of return on a man's capital was 2½ per cent. That was on a farm of something over 200 acres. When you came down to a farm of 50 or 60 acres the interest on the capital became fractional—1/2 per cent., 1/4 per cent. or sometimes 3/4 per cent. If the position to-day is anything like that, it does not require that you should be a mathematical genius to see that exhaustion sets in at an early stage in the farming industry when at one end you are attempting to borrow at 4½ per cent. and at the other end you are earning at the best 2½ per cent. or 3 per cent. I realise that the present Minister is not fully in a position to make money available to the farmers at such low figures as would induce them to borrow freely. There is another aspect of the problem and that is that, in general, the machine is an antiquated one. The methods are antiquated. Unless it can be shown that, by a unified plan, by pointing our agricultural economy towards one point, we can improve the rate of interest that can be earned upon a farmer's capital, you cannot ask the community, or any branch of it, to invest in an industry that gives an uncertain return on the money.

I will refer for a moment to the magnificently ambitious White Paper. In that White Paper as I recollect reading it—I have not it with me—it was suggested that the credit facilities in this country are satisfactory for farmers. If that is so and if we, as farmers, are going to be able to buy such equipment as we need to recapitalise our farms the problem is solved because, as the Minister would be well able to tell the House and as we all know, for the next four or five years the markets of Great Britain are open to us, at known prices, to the fullest extent of our capacity. So, for the first time for some years, both the Minister for Agriculture and the Minister for Finance have a possibility of planning what can be earned from a given acreage of land worked in a certain way. My difficulty is that the Minister may ask, as I am sure he will ask, what rate of interest we suggest a farmer should be charged on a loan. If we say 2½ per cent. or 3 per cent. he is going to ask us who is going to lend the farmer money at that rate of interest. I am supporting the motion for the reason that its terms are general. I think that in that way the matter can be discussed with some advantage. But, actually, there is a fully integrated plan and until we know what side of our economy we are going to stress, what method of production we are going to stress, we are somewhat in the air as to what potential there is in the agricultural industry and, without knowing its potential, we cannot know its borrowing capacity.

Professor O'Brien

I am going to support the motion. Everybody who knows anything at all about Irish agriculture will agree about the urgent necessity for increasing productivity in the industry. That involves additional capital investment. On that, also, everybody I think is agreed. I should like to congratulate the Minister on the publication of the long-period programme for Irish agricultural production in connection with the European Recovery Programme. One reason why I should like to congratulate him is that it vindicates the agricultural policy for which I myself and my friends have stood consistently for the past 25 years, through periods when it was the official policy and through periods when it was not the official policy. To read the long period programme published in connection with the European Recovery Programme is to read a complete vindication of the agricultural policy of the late Mr. Hogan. At last, in the light of realities, in the light of the poverty and scarcity in the post-war world, the illusions which had beset Irish agricultural policy have been dispelled. The fog has been blown away. It now appears that this great programme, under which each country is going to concentrate on the production of those commodities for which it enjoys the greatest comparative advantage, involves a continuation of the programme of agricultural production which was advocated by the late Mr. Hogan and his friends—including, I am proud to say, myself.

That programme was received with considerable odium and unpopularity at a time when the country could better afford to indulge in disastrous and expensive mistakes than it can now. The illusions have been dispelled. It now appears that the true way for this country to exploit its natural advantages is to concentrate on the maximum productivity of the soil and of those crops in connection with which we enjoy great natural advantages and for which we have access to a market which, though not so rich as it was, is still one of the richest agricultural produce importing countries in the world. At least, the line of advance is now clear. We know where we want to go. We know where we should go. We have a clear idea of what we should produce.

As far as I can make out, our contribution to the European Recovery Programme is based principally on the assistance we will give to Great Britain. She will import food from this sterling area country rather from other countries. That will reduce the pressure on the United Kingdom dollar situation rather than directly reducing pressure on our own. I think that that is a correct interpretation of Ireland's share in the European Recovery Programme. It therefore behoves us to produce as much and as good food as we can. Everybody will agree that a programme of that kind requires investment and that investment requires a great deal of capital and credit.

I am not willing to subscribe to some of the astronomical figures which have been mentioned in this debate. I think that, possibly, they contain an element of hit or miss—a considerable margin of error. To some extent they are deliberately exaggerated and magnified in order to impress on the ordinary person the crying necessity for a considerable amount of investment. I should not like to be committed to any particular sum. I think, however, that farmers require a considerable amount of credit and also that, in spite of what has been said about the large deposits which farmers have in the banks, the farming community, as a whole, is not in a position to meet its capital and credit requirements. I think that a case has been made for a certain amount of public assistance, applied either by way of grant or by loan, to the cause of agricultural credit. I have had the experience in the last 25 years of acting on a good many commissions in this country. Some of them dealt with agriculture; others with credit. Therefore, I can claim to have a certain amount of knowledge of agricultural problems and of credit problems both from the point of view of the borrower —the agriculturist—and from the point of view of the lender—the bank.

I think it is a fair summary of my experience to say, in regard to the farmer, that there are two problems of credit in this country. The first is the problem of getting credit, that is, of getting him into debt. I think it cannot be sufficiently stressed that the problem of credit is one of debt and that when a person gets credit he incurs a debt. As I say, the first problem is the problem of getting the farmers into debt. The second is the problem of getting them out of debt. In my experience of Irish agricultural credit over the last 25 years, these two aspects of the credit problem have occupied about an equal share of my attention. Everybody knows that the Irish banks in 1918 over-lent. People did not realise that the rise in prices which had taken place during the first world war had not come to stay. That is probably the only time in the history of Irish banking that the banks did over-lend, but they did over-lend and the Banking Commission, which sat from 1934 to 1938, in addition to the chapter which it devoted to the provision of agricultural credit in the future, had to devote a considerable amount of attention to the problem of getting farmers who borrowed in 1918 out of debt. In other words, we found that a number of Irish farmers had millstones around their necks. Debts had been incurred in periods of high prices. Prices had fallen and the real worth of the debts had risen.

I need not go further into the recommendations of the Banking Commission. I think that experience has shown the correctness of those recommendations. They recommended that the so-called frozen loans should be left alone, that another period of rising prices would very largely solve the problem and I think the experience of the war has proved that that was a correct recommendation because the rise in prices during the war—agricultural prices have doubled in the last ten years—has enabled a number of farmers to discharge debts which appeared hopelessly frozen in 1938.

Again we are at the end of a long period of rising prices. All experience proves that these long periods of rising prices are followed by a fall and I cannot help feeling that anything in the nature of a very large or very generous extension of monetary credits to farmers at the present time might quite easily involve farmers in the same difficulties as the 1918 credits involved the farmers of that day. In other words, I have been driven to the conclusion, as a result of a study of this subject, that the extension of mere monetary credits to farmers, except in unusual circumstances, is not the best way of the State helping to capitalise the agricultural industry. I am inclined to think that the better way is by the extension of subsidies, by the extension of credits for the purchase of specific articles in which it is desirable for the farmers to invest. I will give an example of what I mean.

It seems to me from reading the European Recovery Programme, as I said, that the future course of Irish agriculture now is fairly clear, except in the event of the outbreak of another European war, in which case I suppose we will have to go back to wheat again in a big way. It seems to me that the type of investment which has to be made in Irish agriculture is now beginning to appear fairly clear. It seems to me that the correct sequence of events in this matter is, in the first place, for the Government to make up its mind what it wants farmers to do. Speaking subject to correction from the Minister, I think the present Government is pretty clear what it wants farmers to do. I think it has a pretty clear idea of its own agricultural programme. I think the next stage is to get farmers to agree to do it. The Minister has stressed on many occasions, in the Dáil and in the Seanad and elsewhere, the necessity for the farmer being treated as a free individual, not coerced and not bullied. Therefore I think the next thing to do is to get the farmers to agree to carry out the Government's agricultural programme. Speaking as a city man, with no first-hand knowledge of farming, I suggest the best way to get the farmers to co-operate with the Government is to offer them a remunerative, profitable price. If farmers are sufficiently tempted by prices they will fall in very quickly in carrying out the Government's programme. I think then and then only is the time to consider agricultural credits. When the Government has made up its mind what it wants farmers to do and when farmers have made up their minds that it is worth their while to do it, then I think the Government, either directly or acting indirectly through the agency of banks, can extend credits very usefully to farmers by subsidising the particular things that the Government thinks farmers should use. Lime, grass seeds, fertilisers, machinery, drainage, cowtesting—all these are things which form part of the modern programme of Irish agriculture.

I cannot help feeling that the right way to approach this subject of agricultural credit is not by loans of money from the banks to farmers but by subsidising farmers and enabling them to obtain in a subsidised way, either by way of grant or loan, the particular type of fixed or working capital which falls in with the Government's agricultural programme. When it comes to the question of how these loans and subsidies are to be paid for, I suggest to the Minister that there is a very strong case for borrowing to pay for a great many of these loans and subsidies.

Taxation in this country is already as high as the country can stand and I think that a programme of agricultural production of this kind is essentially a productive investment. It is a productive investment in the sense that, sooner or later, the national income will be raised as a result of the investment. It is not self-liquidating. The debt created will be deadweight debt— with that I agree—but the fact that a debt is a deadweight debt does not necessarily mean that it should not be incurred.

There, again, I would like to try to correct a false impression which is still very widespread in relation to the Banking Commission Report. The Banking Commission Report, which referred with disapproval to a good deal of the deadweight debt which had accumulated at that time, has frequently been quoted as an expression of opinion by the Banking Commission that debt which is deadweight should never be incurred in any circumstances whatsoever. I would like to draw a distinction between productive deadweight debt and unproductive deadweight debt and the real criticism of the Banking Commission regarding the deadweight debt which was being accumulated in 1938 was that a good deal of it, at any rate, was unproductive in the sense that the assets which were being created by it were not earning anything in return.

I think that investment in the improvement of Irish agriculture is the most productive type of investment which the Government could encourage and I think that debt of that kind, which may be deadweight debt in the sense that in the first few years the taxpayer may have to find the interest on it, in the long run will yield abundant return. Therefore I do suggest to the Minister that in discussions with his colleagues he should advocate borrowing rather than taxation for his agricultural programme.

There is just one final point I would like to make in a very short contribution to this very big subject. Even when all these subsidies in kind have been made, there still will remain necessity for a certain amount of money-lending to farmers. The facilities for lending to farmers in this country are very abundant to-day. The joint stock banks lend very large sums to farmers, as we know. The Agricultural Credit Corporation lends considerable sums. There are the Land Commission and the Department of Agriculture, and so on. There is really no shortage of lending agencies to-day. Senator Sweetman has suggested that the rates of interest charged are too high and he has quoted a case of a farmer who can only invest to get a return of 2½ per cent. being asked to pay 5 per cent. Now, of course, if an investment in farming can only yield 2½ per cent., then I suggest it is not worth borrowing for that investment at all. If the return in Ireland of an investment in farming is 2 or 3 per cent., then the industry is really in such a bad way that it is not worth investing in it at all. A thing I always felt in all these discussions is that the actual rate of interest in farming loans is not very important.

I have always felt that all this great discussion which takes place regarding a change in the rate of interest in connection with business activity is really irrelevant to the condition of Irish farming. I have always felt that to an Irish farmer borrowing £100 the difference between 5 per cent and 4 per cent. is very small. What really matters is the price he gets for his produce. If you can earn only 2½ per cent. on an investment, then do not borrow, because it is a bad investment. Therefore, the true solution is to make the investment more profitable, to make farming more profitable. If farming is profitable, if a man is going to make a good profit, he will not shy at an extra 1 per cent., especially on a small loan.

That brings me to my last point. The Minister is, of course, most anxious, more anxious I suppose than anybody in the community, to make Irish farming profitable, to make it pay a dividend. Once Irish farming pays a dividend, once it is profitable like any other industry, its credit difficulties will largely disappear. Industries that have difficulties about credit are usually industries that are not very credit-worthy. As I said, in 1918, when the prospects in Ireland were rosy, not only were banks not loath to lend, but were too willing to lend. It is no use discussing the profitability of Irish farming unless we have a great deal more than we have like the paper from Professor Murphy of Cork and, I might add, the papers on farming in Roscommon by another young graduate of the National University, recently published in the Statistical Society's proceedings — Mr. O'Connor — most valuable papers on Irish agricultural costs and profits.

I do really think that one of the really serious criticisms of the Minister's Department is that research of this kind should be left to private individuals. Looking back on the magnificent history of the Department of Agriculture since it was founded and the good work it has done, I think that the neglect of the financial side of farming is a curious lapse. The Department has been always concerned to make two blades of grass grow where one grew before. During the great depression in 1929 what people in other countries tried to do was to make one blade of grass grow where two grew before. I do not think that was justified in any circumstances. But I do think that the Department has always been concerned with making two blades of grass grow where one grew before without sufficient regard to the profitability of the transaction. Speaking from experience of teaching in the Albert College, I know that there is a curious lack of any Irish agricultural data. We have the best agricultural statistics in the world in one sense, but yet they do not tell the one thing we want to know, and that is, how far farming is a profitable industry. We have from 1847 a complete picture of every aspect of Irish agriculture, yet we have very little data, except a few scattered researches of individual students, on the profitability of Irish farming.

How can a country intelligently pursue a policy of improving the profitability of farming unless we know the profits earned? Therefore, I urge the Minister to consider this necessity for a great extension of research, as I think that until we have economic and financial research into Irish farming we simply will not know what branches are profitable and what branches are not. Until we know what branches are profitable and what branches are not, we will not know where we can invest profitably and where we cannot invest profitably, and until we know where we can invest profitably and where we cannot invest profitably, it would be better not to invest at all. Credits given to farmers in such circumstances are only millstones around their necks. I suggest, therefore, that the first consideration in the long-period programme of the Minister, with the general principles of which I entirely agree, is greatly extended research into the economics of Irish agriculture.

Minister for Agriculture (Mr. Dillon)

Fie, fie, Senator O'Brien, to have so little faith. I am in the happy position to inform him that steps are now under way to initiate costings research in one considerable branch of the agricultural industry. I am happy to be able to say to him, as the doyen of Irish agricultural economic science, that any research proposal he may make to me on behalf of the Agricultural Economic Faculty of the National University will receive from my Department all the assistance that is within our reach to offer, and that if he proposes, as the distinguished head of that particular branch of science in Ireland, a research project, provided he undertakes to give us the unique help which he could give us in the direction of a student, or students, my Department will very happily facilitate such a project to the limit of our resources. To listen to Senator O'Brien in any arena on agricultural economics is a privilege and I very specially welcome his contribution to the discussion to-night because, as was to be expected, most of the topics of importance arising out of this matter he touched upon and all he illuminated, though in some, perhaps, I do not agree with him entirely.

One of the reasons why costings accounts on a more comprehensive scale have not already been prepared by my Department is that I still take leave to doubt whether, in our social set-up, it is possible to get them with the degree of accuracy which the Department could conscientiously recommend as reproducing the truth. Senator O'Brien has referred to certain research which was done in Roscommon. My recollection of the published result of that work was such as to suggest that the farmers of Roscommon were impoverished, that their margin of profit was contemptible. It so happens, however, that I am living on the farmers of Roscommon and I suppose if one is born into this world with a pragmatic mind, one begins to suspect theory which is emphatically contradicted by ascertained fact.

It is not consistent with the proposal that the farmers of an area are sinking slowly into bankruptcy if the average price paid by their wives for their coats and hats is gone up by 200 per cent. It is not consistent with the theory that their profit is disappearing if their normal expenditure is steadily rising. There is a flaw somewhere and it is just the incidence of that seductive flaw which has always made me chary about embarking upon a costings inquiry of the kind designed to elicit the answer to the question whether farming in Ireland is profitable or not. It is pointed out to me that this can be done in Denmark, that this can be done by student groups in Cambridge, that this can be done in Scandinavia. Yes, it can, but in Denmark it was possible to persuade the citizens to export their butter while they themselves got beri-beri on margarine. Can you imagine our people exporting their butter and suffering themselves to get beri-beri on margarine? Nothing would induce them to do it. They would tell you to take a running jump at yourself if you asked them to. No economic consideration would make the slightest impression on our people or be sufficiently strong to induce them to do that kind of thing and I glory in that. God keep them so always.

I do not think our people, quite simply, are prepared to provide the detailed information about their everyday affairs which is requisite if the kind of investigation leading to reliable costing accounts is to be effected. Our people do not like inquisitions of that kind and I think they are perfectly right. Possibly the strength of their prejudice is founded on the fac that for too long certain persons had a right, to which they strenuously objected, to snoop round their kitchens and their homes and ascertain their capacity to pay rent and our people made up their minds that as soon as they got rid of that examination they were not going to have it reinstated on any terms whatever. That is particularly true of the small farmers of this country with holdings of less than 50 acres. I think it may be well within the sphere of practical politics to make a reasonably accurate estimate of the profit margins of large farmers whose habit and practice it would be to keep fairly comprehensive farm accounts. I doubt if anybody would want to inquire into that because my experience of the larger farmer is that if he is not making a profit he takes steps to correct the situation one way or another.

I would be greatly concerned to create a situation in which we, the people's Parliament and Government, could satisfy ourselves perennially that a hard-working farmer on a family farm in rural Ireland had it within his reach to get himself a decent life on the land. Costings on which you could rely to ascertain this would be valuable, but if industrious search for such produces no result more realistic than the Roscommon result, I do not envy the Government that bases its policy on costings. Mind you, I have no doubt that the research productive of the Roscommon findings was conducted with all the scrupulous care of an objective scientist who wanted to prove that the public good might be served by the careful and conscientious survey he attempted to make. I am equally certain that the individuals from whom he sought his information deliberately, skillfully and persistently stuck their finger in his eye.

However, when we come to the costings conducted by Professor Murphy in relation to milk production figures both in the milk supply area for Cork City and in certain creamery areas where the production of creamery milk has been costed, the consistent recurrence of approximately corresponding results leads me to believe that in that particular branch of agriculture to ascertain costings appears to be a more satisfactory process than when you get into the more detailed and elusive field of mixed farming. Having carefully studied the results of Professor Murphy's work, I may inform Senator O'Brien that the sample is acceptable and that costings in that branch of agricultural industry are going to be undertaken on a very much more comprehensive scale. I trust the Senator will endorse the prudence of our reluctance to buy a pig in a poke. I do not think that ten months was an unreasonable length of time in which to attempt the general work of the Department—with three weeks holiday —and give sufficient attention to the matters which require to be considered before determining on an embarkation on a general costings programme.

Senator O'Brien says that the Government is on its way, and it is on its way. It knows where it is going and it is getting there in pretty lively style. They are able to report a very large increase in the production and export of eggs and fowl, a very large increase in the number of pigs and the quantity of bacon produced and, for the first time nearly in ten years, a reversal in the downward trend of milk production. They can report a very substantial increase in the yield per acre of wheat and in barley and in my old friend, the oat, about which there was such melodious hullabaloo from the solicitous citizens who represent the minority in this country.

Mr. Hawkins

What a joke.

Mr. Dillon

We produced in this country 900,000 tons of oats this year.

Mr. Hawkins

Ask the people of Donegal; they gave you your answer. Twenty thousand, boy.

Mr. Dillon

The solicitous custodians of the minority shook themselves into a frenzy about the imminent suffocation of the population by the unmanageable surplus of oats, nor did they consider it with relief or calm until a guaranteed market was provided for this unmanageable mountain. Accordingly, all and sundry were invited to dispose of this burden and blister that the Lord's abundance had put upon them at 28/- per barrel, if they would. There was not a town or hamlet in Ireland in which an authorised buyer was not to be found, and the combined exertion of them all resulted in the purchase of 5,000 tons of oats.

Mr. Hawkins

Until the 8th December.

Mr. Dillon

Five thousand tons out of 900,000 tons. Up to the day before yesterday 5,000 tons were produced, just barely enough to cover the floor boards of the expectant dealers who were promised such a harvest by my solicitous friends on the other side. Stores were swept and garnished. Vast areas and open spaces were prepared to receive it with the dismal result, that that was all that could be found; the floor boards were barely covered. If that was the issue on which the Donegal election was decided, the poor voters must be very vexed at being made such fools of.

Mr. Hawkins

The man who proposed to address five meetings there and addressed only one must be more so.

Mr. Dillon

More what? It may interest the Seanad to know that, when you add up all the purchases of oats made in this country since 1st December by millers, dealers, fodder merchants, stud farm owners and everybody else who bought oats from anybody, including the 28/- brigade, the sales amounted to 70,000 tons, or 8 per cent. of our total production, and, according to our friends across the way here, we nearly wrecked the nation.

When Senator O'Brien speaks of subsidising fertilisers, lime, seeds and every essential requisite for increasing the fertility of the soil, I have no doubt he will agree with me that an essential preliminary to subsidising such products with public money was to break up the rackets that were exploiting them. Mind you, to break up four rackets in ten months is not bad going, each one of which fought like a tiger, and each one of which had formidable and influential support, inside and outside this Oireachtas—no one of which was above resorting to political blackmail, and no one of which was reluctant to threaten the victimisation of their employees or anybody else whom they could threaten with injury rather than let go.

Mr. Hawkins

The Minister has made a very important statement, one which I am sure the people of this country will be very interested in having. I think it would be only fair to the people that they should have the names of the people to whom he is referring.

An Leas-Chathaoirleach

The Minister must be allowed to proceed.

Mr. Hawkins

If the Minister is allowed to proceed there will be questions afterwards.

Mr. Dillon

I do not doubt it, Senator. But the rackets are burst wide open and they will never be set up again while I am Minister for Agriculture.

Mr. Hawkins

That will not be long.

Mr. Baxter

It will be too long for you.

Mr. Dillon

Two years ago limestone was selling in this country at 35/- a ton. The price to-day is 16/- a ton. We are getting it spread on the land for 30/- a ton, and I hope to bring that figure down to 25/-. Twelve months ago ground rock phosphate was costing £9 10s. 0d., delivered. This year it costs from £6 10s. 0d. to £6 14s. 0d., and it will be lower.

Mr. Duffy

That is the price to the farmer?

Mr. Dillon

£6 10s. 0d. ex-factory for the wholesaler, and £6 14s. 0d. ex-factory for the farmer, the shopkeeper or anybody else that cares to purchase it.

Mr. O'Reilly

Is the Minister referring to gafsa rock phosphate?

Mr. Dillon

No, but to ground rock phosphate. There is semsol, gafsa, super, sulphate of ammonia and muriate of potash. The prices are all coming down.

Mr. Hawkins

What about the potato fertiliser?

Mr. Dillon

That is manufactured by the Senator's acquaintances.

Mr. Hawkins

Tell us about it.

Mr. Dillon

My advice on that was made public at a meeting of the Longford County Committee of Agriculture. There is no control on the price, but if there is any attempt at exploitation my advice to the farmers is to leave it where they found it, and to buy super, potash and ammonia, and make their own mixture on their own holdings. If they take my advice about that, as they were persuaded not to take it about oats, they will find that I am right in this as I was about the oats.

Mr. Hawkins

May I suggest to the Minister——

An Leas-Chathaoirleach

The Minister must be allowed to proceed.

Mr. Dillon

I cannot help feeling that Senator O'Brien is right when he asks Senator Sweetman how much importance he attaches to the rate of interest in respect to the average kind of loan that the average kind of farmer in this country is likely, possibly, to borrow. Say that there is a profitable opportunity for the employment of capital and a farmer borrows £200, £300 or £400, and we succeed in reducing the rate of interest by 1 or 1½ per cent., the difference to the farmer cannot be more than £6 per annum— and if he is trading on as narrow a profit as that, as Senator O'Brien said, he would probably have been better off never to have borrowed at all.

I have often wondered myself why we should pay interest at all, but I do not know that the well-known indulgence of Seanad Éireann would permit an excursion into St. Thomas Aquinas and the justification of usury. I would rather like to make that excursion some day, but I take it that we have to proceed this evening on the basis that usury has become respectable when you describe it as banking.

Mr. Duffy

There are several respectable people engaged in the practice.

Mr. Dillon

So I understand, but on the assumption that, in our economic system, interest on borrowed money is inevitable—and I do not accept it; I believe that is still open to question, and I think there are powerful arguments for the view that the borrowing and lending of money at interest is fundamentally wrong—I want to distinguish between joining the fortunes of several to venture in common bond or enterprise, sharing the profits or sharing the loss, and a very different proposition, taking money and lending it at interest.

Mr. Duffy

Or creating credit and getting interest on that.

Mr. Dillon

These are such fascinating topics that I would enjoy taking a canter, but at the moment I suppose we are dealing with the immediate practical problem of meeting the need for urgent expansion of production. If that is to be met in time, we must use the implements to our hand, not abandoning the resolution to scan the wider horizon when opportunity offers.

Therefore, I ask this question, in all seriousness. What creditworthy farmer of any one of our acquaintance is unable to get credit? If there are any two Senators here who will accompany any seeker for credit, I think I can guarantee that they can have £1,000 in the morning.

Mr. Baxter

With your security added.

Mr. Hawkins

This is a joke.

Mr. Dillon

If any two Senators will accompany a respectable farmer——

Mr. Duffy

He can be respectable and still be poor.

Mr. Dillon

——and put their names on the back of his bill, guaranteeing him to be creditworthy, I think there is not any difficulty in getting him £1,000—and I am sure Senator Quirke will agree with me.

Mr. Quirke

I will agree that there are two Senators whom the Minister could pick and that they will get £1,000 but if he leaves the picking to me, I will guarantee I can pick two and that they would not get £1,000.

Mr. Dillon

The Senator, being at home here, can afford to be more frank than I. I think it is true to say that there is abundant credit available. In fact, one thing that is rather a matter for anxiety at the moment is to ensure against an inflationary superabundance of credit. I do not think I am exceeding the limit of my authority when I say that any proposal from a credit-worthy person for any amount of credit calculated to result in increased profitable production can be made available to-morrow morning.

Mr. S. O'Farrell

It is important for the Minister to specify what is the test of creditworthiness.

Mr. Dillon

The signature of Senator Quirke and Senator Hearne on the back of the bill, the signature of Senator Baxter and Senator Hayes on the back of the bill. Any number of people approach me and say: "A very decent man, and I think he ought to get £300." Well then, I pass the promissory note across the table and say: "Certainly, you put your name on the back of that, and say you will pay up if he does not."

Mr. S. O'Farrell

It is their credit-worthiness you are dealing with.

Mr. Dillon

If they know him to be creditworthy, they will not be afraid to come in behind his back. That is the acid test. Let us not stop at that point. That test eliminates the man who obviously should not get credit, because his friends and those who know him combined said he is a chancy man, perhaps well-intentioned but he is chancy and if given credit, it is as likely as not that he will lose it, possibly from inherent dishonesty, possibly through incapacity.

I think it was Senator O'Brien who said that one must remember that there are two problems—one is to persuade the farmer to borrow, the other to persuade the farmer to pay. It is true that many of our people who are creditworthy, who require credit and who ought to borrow, cannot be persuaded to do so. They are the very kind of people who have a false pride in that matter and who regard it as in some sense a betrayal of their own integrity or their family's integrity to go into debt. That is a peculiar foible, the source of which I cannot readily detect. If one of the man's sons becomes a shopkeeper, it does not cost him a thought—quite rightly—to run a substantial overdraft in the bank, and the more money he can borrow from the bank and profitably trade upon, the more he is inclined to borrow; whereas his father, who may have a deposit in the bank, will not only refuse to borrow but will not touch a particular globular sum of money that he has deposited in the bank for a certain purpose, the certain purpose being the dowry of his daughter.

That inherent conservatism in our people does, I confess, present a problem, but I do not think it is a problem present to the mind of Senator Sweetman. He will agree that, much as I might exhort people prudently to invest money in the development of their business, I have no right to go round telling my neighbours how to invest their savings. I may advise them and direct their attention to the facilities available, but I must be mighty careful in my solicitude for their welfare to remember our national slogan for so long: "Good Government is no substitute for Self-Government"—and that goes for families as well as for nations. I have tried, in some measure, to do in minutiæ in the parish of Bansha the very thing that I think was partly present to Senator O'Brien's mind. I think that is the very thing that was partly present to Senator O'Brien's mind. I think that that is a thing that may perhaps provide a lesson not only for the farmers throughout the country but for the members of this Oireachtas.

I have tried to bring to the attention of the people of Bansha parish the facilities provided by their own Department of Agriculture. I am happy to tell the Seanad that the results have been very gratifying and they confirm me in my belief that we have failed heretofore effectively to bring home to the people the facilities that were available would they but seek them. I am hoping to extend the Bansha principle as time and circumstances permit to every parish in Ireland. I think it is a very good system, because it is founded firmly on the thesis that the Department and all its officers are the servants of the people who employ them and that they come to the people not as masters but as friends invited to advise. In the time in which we live I think it is very necessary to enumerate that principle emphatically. It is very easy in an excess of solicitude to transgress that principle—to see so clearly what would redound to an individual farmer's advantage and to insist on his doing it for his own greater good, quite oblivious of the fact that he has a perfect right to say: "I would sooner be poor than have you pushing your way into my kitchen". In many circumstances it would be a very wise man who would make that rejoinder rather than admit the right of any Government Department to tell him how he must till his land.

I think it is a mistake for Senators to suggest that there is any ground for the suggestion or even for the impression that only large farmers can get loans and that small farmers can not. There is not a farmer in this country, large or small, if he has ten acres or 1,000 acres, who, if he corresponds with the ordinary test as to the capacity to meet his debt when it falls due, cannot get to-morrow morning all the credit he can possibly want. Here is a problem I would ask the Senators to help me to solve. Is there any device that can be offered which would effectively segregate the sheep from the goats in applicants for credit? I may say that a ready and simple test would be to challenge Senator Quirke and Senator Hearne to put their names on the back of a man's bill. Neither I, nor Senator Quirke, nor Senator Hearne can in practice accept responsibility for putting our names on the back of a bill for every man we believe to be credit-worthy in rural Ireland. It is just not practical politics and we would not be honest men if we did, because if any substantial number of them defaulted we would be unable to meet our guarantee. Putting the dilemma in that way is an easy way to demonstrate the impracticability of such a test; but it would be ridiculous to suggest that it really belongs to the sphere of practical politics. Is there any group in rural Ireland who, living amongst their own neighbours, could act as a credit reference for farmers who want credit? I wish there were. I have often wondered whether an active Bar society, comprising all the practising solicitors in a county, could be invited to act confidentially as a credit reference for credit applicants in the different counties. One's mind jumps immediately to the agricultural committees. But no matter what rule of confidence you impose upon such a committee it would be practically impossible for a man or woman to speak frankly and honestly about the credit-worthiness of their neighbours if they honestly believe their neighbours, for one reason or another, to be unlikely to pay. I want to tell the House that I will recommend the Government to give a fair trial to any scheme which has the appearance of a reasonable security designed to certify, without fiduciary responsibility on the certifier, as to the credit-worthiness of individual applicants for credit. I have tried time and again to think of such a scheme and I still have not found one.

Senator Counihan's proposal is not unfamiliar to me. I think even Senator O'Brien would agree it is a very ingenious proposal. I think the addenda the Senator has added as to not allowing people to sell bonds have not been as well thought out as the earlier portions of the plan, because a bond that nobody could sell is scarcely a very valuable security. The first half of the plan keeps all its pristine glory, but it is subject to one serious difficulty. If we give everybody who purchased his land from the Irish Land Commission a statutory right to walk into the Land Commission to-morrow and charge his land to the limit of its capacity to pay, there will be powerful charging; but I doubt very much if the credit on the charge will go where it is most needed. Upon my word, there is not a Senator here but knows how little right I have to denigrate the scheme, for I, on one occasion, was proud to be its spokesman elsewhere. I do not think it is a great exaggeration to say that a rough-and-ready way of separating the sheep from the goats would be to give that statutory right to all and sundry, and watch the arrivals at the Irish Land Commission during the first three days. I would write "goat" on every certificate. It is a risky man who is bursting to charge his own land.

Mr. Counihan

Unless the farmer is able to use it for credit it would be a useless system.

Mr. Dillon

I agree. It is a foolish man in this country who will talk lightly about mortgaging his land. I would remind the Seanad that some of them seem to have forgotten the credit facilities that are available. They are not inconsiderable. The Agricultural Credit Corporation will advance money for the purchase of live stock, for the purchase of manures, for the purchase of seeds and machinery, for the erection or repair of dwelling-houses or hay barns, for the erection of other farm buildings, for land improvement, drainage, for fencing, for the establishment of new creameries or for the extension of existing creameries, on certain terms, for the purchase of heifers and for the purchase of agricultural implements.

Mr. Counihan

At what rate per cent.?

Mr. Dillon

At 4½ per cent.

Mr. Counihan

There is a great difference between that and 5/- per cent.

Mr. Dillon

How much does the Senator think the farmer ought to borrow?

Mr. Counihan

All he requires.

Mr. Dillon

All he is able to get? It is a dangerous doctrine, Senator. He can have 35 years in which to repay a loan of £50 and upwards—70 semiannual instalments.

Mr. Counihan

And he will have paid £200 by then to be clear of his debt.

Mr. Dillon

I do not think that is quite correct. He can have five years to pay for implements, seeds or manures; seven years to pay for live stock; 15 years to pay for a hay barn: 15 years for the drainage of land or the extension and improvement of land or buildings, and 20 years for the funding of a debt. If he owes money to a cantankerous creditor who has the right to demand payment on the nail, he can borrow from the Agricultural Credit Corporation and take 20 years to pay it back, and buy off his creditor. He can have 35 years to repay the price of any house or other permanent building. These are the provisions made by the Agricultural Credit Corporation.

I make no apology to the Senator for directing his attention to the facilities which are in existence. I do not think it is unfair of me to say that it was almost suggested that there were no facilities worth talking about in existence, either by way of loan or grant. That is quite an illusion. Under the Department itself there are loans at the rate of 4½ per cent. interest for the purchase of stallions, premium bulls and heifers. There are also loans under the Department, as distinct from the Agricultural Credit Corporation, for the purchase of agricultural implements costing up to £40 each in one scheme. By arrangement with the Department the Corporation make loans from £40 to £100 for the same purpose. The hand-spraying machine scheme is very widely availed of. There are loans for poultry-breeding equipment and loans for the establishment of corn mills. Money may be borrowed for the improvement of an existing mill and for the erection of farm silos and poultry-houses and as regards most of these no deposit is required at all. There are loans for the improvement of scutcheries and there are provisions in regard to pedigree stock which take the form of a loan or grant and into the details of which I need not go.

Then we come to the grant scheme. Under the existing farm improvements scheme there is a grant equivalent to 50 per cent. of the approved estimated cost of land reclamation, drainage or fencing. The minimum grant is £5 (except in congested districts, where the minimum grant is £1) and the maximum £100. Under the farm buildings scheme, which is not yet in operation but which will be operating after 1st April, an applicant may obtain a total of £260 in grants in any one season, and, for the repair or conversion of existing buildings, grants amounting to 50 per cent. of the approved labour content of the work will be available.

A grant (not exceeding £50) of one-third of the cost of the installation of machinery will be available, together with a loan not exceeding £100 to cover the remainder of the cost of installation. A grant (not exceeding £25) of one-half of the cost of necessary repairs and equipment is available, together with a loan not exceeding £100 to cover the remainder of the cost of repair and equipment. This relates to the repair and equipment of local corn mills, of which I hope a good deal will now be done since maize has been made available at the same price to the residents of Belmullet as it is to the mill owners on the North Wall. Grants ranging from £1 to £10 are available for anyone who wants to work a lime kiln in the congested districts.

Substantial sums are provided to make grants to people who want to work poultry installations, and there are schemes for subsidising lime production and distribution. Under the poultry development scheme, very liberal grants are being provided for the erection of poultry houses, for the provision of Putnam lamps and for other apparatus that may be required.

Mr. O'Reilly

I have been informed by an official that the grants to which the Minister has referred in respect of poultry houses apply only to houses to be erected on poultry supply farms and not in respect of movable wooden structures on the ordinary commercial poultry farm. I hope I am wrong.

Mr. Dillon

I hope you are, too, Senator.

Mr. O'Reilly

I would be glad to think I am wrong.

Mr. Dillon

I am beginning to acquire the prudent Ministerial reserve, but I am virtually certain—I have not got my officers with me, as I did not care to detain them so late at night—and I shall certainly confirm my own belief, that for the last four months grants were available for the erection of poultry houses on every small farm in Ireland, and the more you can persuade them to apply for them the more we shall be indebted to you.

Mr. O'Reilly

Do the grants apply to movable wooden structures?

Mr. Dillon

Yes. There are grants for any residence that houses a hen, a respectable hen.

Mr. Hearne

A credit-worthy hen.

Mr. Dillon

Yes, a credit-worthy hen. There is a subsidy for burnt lime. I find it hard to subsidise ground limestone which is produced by commercial corporations until the commercial corporations are selling it at the lowest penny at which it can be produced and I am taking steps to expedite the arrival of that date. There is a special farm drainage scheme under which we did, I am sure with Senator O'Brien's cordial approval, very valuable work in the Gaeltacht during the past year, providing comprehensive schemes of farm drainage.

In conclusion, I want to say this. I am glad to hear so distinguished an authority as Senator O'Brien exhort us to borrow boldly for the purpose of subsidising the raw materials of the agricultural industry. So revolutionary a proposal from so prudent a source I confess exalts me. If the European Recovery Programme loans are converted into grants, I have the authority of the Government to say that every acre of land in Ireland, no matter in whose ownership it rests to-day, will have done upon it such draining, liming and fertilisation as will leave it in a condition to produce the maximum God ever meant it to produce. If the device suggested by Senator O'Brien commends itself to the prudent financiers who guide the destinies of our national finances, I will be glad to spend the proceeds.

I shall certainly direct the attention of the Minister for Finance, the chairman of the Central Bank and certain other persons with whom he and I are familiar, to the Senator's speech, and if some of them at least do not swoon away when I show them the official report of what Senator O'Brien has said, then the world has changed greatly since I first made their acquaintance. I can assure the Seanad that if any proposal can be made to me which will facilitate the granting of credit to credit-worthy farmers, I guarantee that abundant credit will be available, and, if they will help me to separate the sheep from the goats, then together we will afford the sheep an abundant opportunity to wax fat and prosper, so long as increased production attends his progress.

Mr. Hawkins

I move the adjournment of the debate.

Debate adjourned.

The Seanad adjourned at 10 p.m. until 3 p.m. on Thursday, 13th January.