Seeds and Fertilisers Supply Bill, 1955—Second and Subsequent Stages.

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

Minister for Local Government (Mr. P. O'Donnell)

The purpose of this Bill is to enable county councils to adopt schemes by which credit may be provided for the purchase of seeds and fertilisers by small cultivators. Schemes of this nature were operated by county councils and were validated by temporary Acts at intermittent periods from as far back at 1880 up to the year 1933 when they were allowed to lapse. There was no enabling legislation from 1933 until the war period when temporary Acts were passed in 1940 and 1941 validating schemes adopted in the years 1939 to 1941. The Seeds and Fertilisers Supply Act, 1942, the last comprehensive Act dealing with these schemes, applied to the period from 1st August, 1941, to 31st July, 1942, and short continuing Acts extended the period of its application to 31st July of last year. The present Bill proposes to place the legislation dealing with the schemes on a permanent basis. The Bill is framed on the lines of the 1942 Act but contains one important provision not included in the earlier legislation, and that is one which makes the adoption of a scheme a reserved function of a county council for the purposes of the County Management Acts, 1940 to 1955.

The Bill is an enabling Bill only, permitting county councils to adopt schemes if they wish to do so. The Bill allows of two types of scheme. The type of scheme usually operated is where the county council pays a merchant the cost of the goods supplied to an applicant and recovers the cost from the applicant. Alternatively, the council may adopt a scheme by which they guarantee the due payment to a merchant of the cost of seeds and fertilisers supplied on credit by him to an approved applicant.

Provision is made, subject to certain conditions, for recoupment by the State of half the losses incurred by county councils on the schemes. County councils' losses under previous schemes have been insignificant and the State has not been called upon to make any recoupment.

Last year, 19 out of the 27 county councils adopted schemes. The total number of loans was 1,828 and the total cost £35,619, the average loan thus being about £19 10s.

There is really nothing new in this Bill. The Seanad has on many occasions in the past approved of Bills applying for short periods the provisions embodied in the present Bill. I am confident, therefore, that the Bill will be accepted by the House.

Mr. Cogan

As this Bill confers some benefit on a relatively small section of the agricultural community, nobody will object to it. When the Seeds and Fertilisers Supply Act was introduced during the emergency, it was regarded as beneficial, in view of the urgent need for intensive food production. The period of application of that Act has been continued since, as the Minister pointed out, in short continuing Acts. While the measure is beneficial to a small section, it is a very insignificant measure as far as agricultural credit is concerned and its scope is extremely limited.

While there is no doubt that the Minister should continue this measure, it is desirable that something more far-reaching should be considered. The fact that so small a number of people, taking the country as a whole, have availed of it shows that it has not been as effective as was anticipated. There is no limit to the valuation of the holding for the purpose of this scheme, but in practice it has been availed of by only the smaller farmers and for small amounts, which is obvious from the amount of the average loan—£19. Nineteen pounds at the present time will purchase only a very small quantity of seeds or manures. That is why I say the scheme is rather insignificant and that something much better could be devised.

I doubt if there is any body in the State less qualified to cope with the question of agricultural credit than a county council. A county council, through its staff, has very little to do with agriculture. The functions of local authorities in regard to agriculture are, in the main, delegated to a county committee of agriculture. One would imagine that, if it was intended to make this measure to any degree effective, the operation of the scheme would be transferred to the county committee of agriculture.

County committees of agriculture have staffs of instructors who move amongst the farming community and whose duty it is to make themselves acquainted with every farmer in their areas. In recent years the number of instructors has been increased sufficiently, in a number of counties at any rate, to ensure that there is one instructor for less than 1,000 farmers. In this way the instructor is put in a position to know the farmers and their circumstances. One would imagine, therefore, that a credit scheme for any agricultural purpose should be operated by the county committee of agriculture, assisted by the district instructors.

One can easily see the additional benefit that could be derived from such a scheme. The instructor could advise the farmer to sow a better type of seed and could tell the farmer, if he was not in a financial position to purchase the better seed, that there is a scheme which will help him. The instructor could advise the farmer to use more fertiliser and indicate to him that there is a scheme in operation and could assist him in taking advantage of that scheme. In that way, the position of the instructors in advising the farmers would be greatly strengthened.

I believe that, if this function of providing credit for the farmers is continued in the hands of the county council, it will be operated by a body of officials who have very little active contact with the farmers. We all know that the office staffs of the county councils have increased enormously in recent years and county council offices in fact have become similar in many respects to the State Departments in the city. The farmer seeking credit and calling into one of these large and extensive offices would find himself almost bewildered and equally bewildered would be the officials who might be called upon to advise him.

In this Bill, as indeed in previous legislation, the power to provide credit for agriculture is put into the hands of officials whose functions are to a very considerable extent far removed from agriculture. I do not think that is desirable. The Minister, I think, mentioned that the operation of this Bill by the county councils will be a reserved function; that is to say, it will be the function of the elected representatives who will decide whether a scheme is to be introduced or not under the Bill, but the administration, as in all other matters, will rest in the hands of the county manager and his staff. That is why I say that this is not by any means the best type of scheme for the provision of credit for agriculture. I should like, therefore, the Minister to consider the alternative of having this power transferred to the county committees of agriculture, thus strengthening these committees in the important work they are doing to improve agricultural production.

Mr. Hickey

Are they not part of the county council?

Mr. Cogan

They are, but their administration is absolutely separate. They have separate offices and staffs, and under this Act the credit will be provided, and the scheme will be operated by the staffs of the county councils, and not by the staffs of the county committees of agriculture.

I know that one of the disadvantages in this form of credit is that many farmers feel rather reluctant about having their business, especially their financial business, put before the local representatives. I think, however, that that does not operate to any great extent, because it is the staffs of the county councils who actually deal with each individual application and it is only in cases of default that the cases might receive very much publicity. One of the reasons, I think, that this scheme might not be availed of to a great extent is that applicants would feel that their cases would come before the county council and be discussed in public. That is something which farmers might not wish to see happening. It is an extraordinary thing in regard to credit generally that, while business people boast about the amount of money they can borrow and the size of their overdraft, farmers and smallholders generally feel that that is something that they would like to keep absolutely secret.

That is perhaps the main reason why I am asking to have the powers contained in this Bill transferred to the officials of the county committees of agriculture. These officials go around to farmers and discuss their problems confidentially with the individual farmers and they could easily discuss with them the provision of credit facilities. I am making that suggestion now in view of the fact that we are introducing permanent legislation. While I appreciate that any legislation can be amended, I think we should take advantage on this matter of the suggestion I have made. The staffs of the county councils are not the best qualified people to deal with agricultural questions.

There is another point that arises in regard to this Bill. I understand that the existing legislation terminated last year and I am wondering how the county councils are operating during the present year under the provisions of this Bill. As far as we are concerned in my county council, we have received very few applications for loans under this scheme, and therefore the matter has not been brought before us. I am just wondering, therefore, whether the scheme is being operated this year or not. It would certainly be rather late to begin operating it at this time of the year.

Mr. Burke

I am at a loss to understand the point made by Senator Cogan. As members of the county councils, we have to provide these moneys. We cannot give to the county committees of agriculture the power that would entitle them to give unlimited credit to the people. The county council has a responsibility to the ratepayers. It is the sort of responsibility that it would be impossible for us to delegate to another body.

I think the best service that could be done to this piece of legislation would be to get the national and local papers to give it full publicity. We hear year in and year out lectures and talks on the desirability of providing credit facilities for the farmers. This Bill makes that credit available to all farmers, large and small. They can get their fertilisers, seeds or anything else they want for their crops, and, when they have been paid for the crops, they can pay the county councils. I am, therefore, at a loss to know why this scheme has not been adopted in a much more widespread way. One would think, listening to Senator Cogan, that, when a farmer applies for credit under this legislation the matter is brought before the local county councillors, but such is not the case. The whole matter is treated in the same confidence as would be a transaction between a client and a manager of a bank, or the manager of the Agricultural Credit Corporation.

I want to compliment the Minister on bringing in this piece of permanent legislation. I am wondering if Senator Cogan is objecting to it because it was allowed to lapse in 1933. I am surprised to hear a man who is so interested in agriculture criticise this piece of legislation, which he must know is really beneficial. We had hoped that Senators such as Senator Cogan would tell the farmers of the benefits of this seeds and fertilisers supply scheme. There is no necessity to gild the lily. This is an excellent scheme. The public press would do a good national service by making this scheme known in every farmstead in Ireland.

Mr. Hickey

Why is such little advantage taken of the scheme?

Mr. Burke

True.

Mr. Hickey

That is not an answer to the question. I understood from the Minister's statement that only £19 per county was given out.

Mr. P. O'Donnell

No, per person.

Mr. Hickey

Surely that is an indication——

Mr. Burke

That is not generally known, I think.

Mr. Hickey

Notwithstanding the fact that there are representatives of the farming community on the county councils? I should like a better explanation than that from the Minister.

Mr. P. O'Donnell

I notice that Senators complain that advantage has not been taken of this Act in the past. I think one of the reasons is that the seed merchants in this country know their customers. If a farmer wants credit, he generally gets it from his seed merchant. He does not bother going to the local county council or to the bank to procure the money. It is a common practice in rural Ireland for seed merchants to advance the seeds and to be paid when the harvest is reaped later in the year.

I am making one change in this Bill, which I think will be for the benefit of all concerned. Under previous Acts, the formulation of a scheme was an executive function of the county manager. It is true that possibly a number of local councillors were not aware of the powers conferred on the county manager under previous Acts. Under this Bill, I am making it a reserved function and it will be a matter for county councillors to formulate the scheme themselves. If a number of representatives come together, meet in the council chamber and formulate this scheme, after a time they will go to their own areas and notify the farmers there of the advantages that may be gained under the scheme. To make it a reserved function, and not an executive function, should go a long way to popularise the scheme and to make it more widely known.

Senator Cogan said he thought it would be better to have the scheme administered by the county committees of agriculture. This is an administrative scheme. It is really a social service. County committees of agriculture are merely acting in an educational and an advisory capacity. They have no administrative functions, as such. It is much better that those who pay the piper should call the tune. The county council have to provide the money, and I think they should administer the scheme. We have been told that the scheme has not been taken advantage of in the past. That is simply because it was left to each manager to formulate the scheme. Now, when this Bill becomes an Act, it will be possible for local councillors to formulate the scheme.

Mr. Hickey

Is there any danger of duplication between it and the Agricultural Credit Corporation?

Mr. P. O'Donnell

Absolutely none. I think Senator Cogan was worried about the fact that the Act in relation to applications for loans terminated last year. So it did. If the Senator will look at Section 7 of the Bill, he will see that that section gives authority to validate any action taken during the current year by local authorities. That will protect them. Loans may go on, as they have gone on in the past. Senator Cogan also said he never heard of the scheme being operated in Wicklow. That is not so. They have such a scheme in Wicklow.

Mr. Cogan

I did not say that.

Mr. P. O'Donnell

I apologise to the Senator. We are merely anxious to put this scheme, which had been in operation for some time and was then permitted to lapse, on a permanent basis. This is a very generous Bill. There is no limit to the amount which may be loaned and there is no limit whatsoever on the finances of the applicant when applying. Any person, irrespective of his means, may apply.

Mr. Hickey

What interest is charged?

Mr. O'Donnell

That is a matter entirely for the local authority who will provide the money. I understand it is generally 5 per cent. It is a very generous scheme, formulated for the purpose of helping the farmer, particularly the small farmer, and the persons who will draw up the terms of the scheme will be the members of the local council who are generally representative of the farmers of rural Ireland and who know the conditions of their neighbours.

Question put and agreed to.

Agreed to take remaining stages now.

Bill put through Committee without amendment, reported and received for final consideration.

Question proposed "That the Bill do now pass."

Mr. Cogan

Section 5 lays down that:—

"The Minister, with the consent of the Minister for Finance, shall, out of moneys provided by the Oireachtas, recoup to any council of a county one-half of every sum in respect of which all of the following conditions appply:"

In the case of a default on the part of a borrower, or in the case of loss to a county council, the Government shall recoup the county council to the extent of 50 per cent. In connection with that, I should like to ask the Minister, before the Bill becomes law, are any conditions laid down on the county council in respect of the schemes which they may draft for the granting of loans? It is easy to see that this is an important matter, because, as I see it, one of the reasons why this Act was not availed of to any great extent in the past was that the conditions laid down by the county managers invariably were very rigid.

It may be that the county council may decide to modify those conditions to a very considerable extent. They may not ask for sureties, in addition to the guarantee given by the borrowers. I should like to ask if the county councils will have power to draft their schemes as they think fit, or will the Department of Local Government step in to restrict the power of a county council in this matter? I think it is here that the danger lies. If, as I say, conditions are too lenient, or if the scheme is too loosely drafted——

Mr. P. O'Donnell

I do not want to interrupt the Senator, but we will not intervene at all in the making of the regulations.

Mr. Cogan

At the same time, I take it the guarantee of 50 per cent. recoupment is absolute?

Mr. P. O'Donnell

Yes. The State has never yet been asked to pay one penny on foot of that.

Mr. Cogan

I understand, but the scheme has been of such limited scope in the past that it is easy——

Mr. P. O'Donnell

There were 9,000 recipients during the two years.

Mr. Cogan

If the county councils were to extend this scheme on the lines suggested by some Senators, if they were to embark on a very wide measure of credit provision, can I take it from what the Minister says that the guarantee of 50 per cent. recoupment will remain?

Mr. P. O'Donnell

Subject to the conditions in the section.

Mr. Cogan

Yes. The conditions in the section are:—

"(a) the sum has become payable by any person to the council in respect of or on account of a sale of goods pursuant to a scheme under this Act by the council to that person or in respect of or on account of a payment made by the council to a seed merchant in pursuance of a guarantee given pursuant to a scheme under this Act to the merchant in respect of goods supplied by him to that person,

(b) the Minister is satisfied that, before making the sale or giving the guarantee (as the case may be) in relation to which the sum became payable to the council, the council took reasonable care in regard to the selection or approval of that person,

It seems to me that (b) is the important clause. The Minister must be satisfied that the council took reasonable care. I think that is satisfactory enough. If the council conforms with their own scheme, then I think the Minister must be satisfied that they have taken reasonable care.

Mr. Cox

The section provides that the Minister should be satisfied that the local authority made inquiries before granting the loan. It does not say he should be satisfied that the local authority had made a reasonable endeavour to collect the loan.

Mr. P. O'Donnell

The sum is certified to be irrecoverable.

Mr. Cox

Suppose a number of debts were to be allowed to become statute-barred, the Minister would apparently have no alternative save to pay.

Mr. P. O'Donnell

The State would only have to pay 50 per cent. The auditor would surcharge the people responsible for allowing the debt to become statute-barred.

Mr. Walsh

Would the Minister state whether it is the county manager or the local authority which decides whether or not a loan can be recovered? Is it a function of the local authority to decide?

Mr. P. O'Donnell

That would be a function of the manager.

Mr. Walsh

Would the Minister state from what funds the moneys advanced would come? Would they come from the Local Loans Fund, or could they be raised by the local authority through a bank? The Minister stated 5 per cent. In view of the present interest payable to the local authorities, would the Minister not agree that the rate of interest at the moment will be higher than 5 per cent.?

Mr. P. O'Donnell

Would the Senator look at Section 6? It says:—

"The council of a county may borrow with the sanction of the Minister sums required for the purpose of providing goods to be sold by the council pursuant to a scheme under this Act, and any sum so borrowed shall not be reckoned as part of the debt of the council for the purpose of any enactment limiting the borrowing powers of the council."

They have never yet borrowed, but they have the power to borrow.

Mr. Walsh

From the bank?

Mr. P. O'Donnell

They may borrow from whatever source they have been financing the scheme from.

Mr. Walsh

The Local Loans Fund?

Mr. P. O'Donnell

I suggest they could go to the bank, which is the proper place for them to go. I was asked what the rate of interest was. I said it was 5 per cent. That has been the usual rate, but it may fall or go up. We have no guarantee at what rate they will be able to borrow.

Seanad Éireann debate - Wednesday, 16 May 1956

Seeds and Fertilisers Supply Bill, 1955—Second and Subsequent Stages.

Seanad Éireann debate -
Wednesday, 16 May 1956