Agricultural Credit Bill, 1965: Second Stage (Resumed).

I have just a few other points to make. I had developed the necessity of paying proper attention to provision for depreciation in loans made by the Agricultural Credit Corporation. This provision for depreciation is even more important where the loans have been given for buildings or for land improvement. In such cases the provision should be made on the basis of a co-operative society charged with the job of the deductions being made by that society on a yearly basis, because this would enable the maintenance work to be carried out efficiently and promptly at certain stated periods in the year and the owner could do the work and pay back the deductions and the conservation would be attended to while the State would have the satisfaction of knowing that the assets were conserved. That is the fundamental point and it has been missing from our approach to agricultural credit in the past. Much of the good work of the various grants and loans has been lost due to a failure to attend to that provision.

Finally, I was very heartened here tonight at this the first meeting of the new Seanad to find two new Members, Senators Garret FitzGerald and Browne, both coming in to attack the odious provision under which those nominated for the Dáil and Seanad have immediately to relinquish any membership or directorship such as in the case of the Agricultural Credit Corporation under section 10. That is an odious clause leading more and more to bureaucratic dictatorship in this country. It is one we must resist, and resist to the bitter end. We have resisted it here in the past.

This all began back in 1951 with an innocuous provision in some Bill which was put through the House, and ever since then, as each opportunity presented itself, this odious clause has been inserted into legislation. It was in at least four Bills that came before us in the past five years. We tried to resist it, but we were simply brushed aside, and the process has now become almost automatic. I hope that on Committee Stage of this Bill we will again attack it, and we can attack it knowing that a fine case was made against it here tonight by Senator Browne from the Government benches. I hope we will be a united Seanad against it, because there should be no slur on anyone who lets his name go forward for public life, which is the highest service to which we can be called. If it is all right for members. of private bodies, all right for members of universities, all right for private citizens, whether they are farmers or publicans, to seek membership of these Houses and still continue in their avocation, the same should apply to local authorities and State and semi-State bodies.

We might look at the position in a highly successful country like Holland where civil servants can seek election to Parliament, and if they are successful, they merely get leave of absence for a period, and not leave of absence on the niggardly and unrealistic basis which we see in section 10 in relation to the Agricultural Credit Corporation —leave of absence with no salary increment or salary adjustment. Is it realistic to expect anyone to give up a full-time position for the allowance given in the Seanad? In Holland, the procedure is that if a public official, a civil servant or a member employed by a corporation or any such body, is elected to Parliament, he is given leave of absence and if there is any salary differential between his salary and the allowance given to a member of Parliament, he is given that differential by the body which gives him the leave of absence. That means he does not lose by serving his country. He does not gain, but it is important that he does not lose. Many public employees in Holland have availed of that, and the general pattern has been that once they get into public life, they do not go back, and they make a marked contribution to public life. This means they have recruitment to public life which we are denied in this country.

I appeal to the Minister and the Government to start this new session with a different approach to membership of both Houses. Let us remove the slur which section 10 implies in regard to the Agricultural Credit Corporation, and remove it from other bodies also. Membership of the Agricultural Credit Corporation is certainly no more important than membership of Bord Bainne and yet on Bord Bainne we have two freely elected Members of the Seanad, Senator Prendergast and Senator Ryan. That is to the benefit of Bord Bainne and this House. They serve both and we can expect them to enlighten this House on the problems that beset the sales of our dairy products. In the same way I am a member of the Council of the Institute for Higher Studies and I do not think that in any way takes from my being a Member of this House. I appeal to the Minister to use his influence to remove section 10 from the Bill. We cannot afford to have apartheid in this country on the scale it contemplates. It narrows down the eligibility of members. We already have to run the gauntlet of the press and of our appalling system of election which is hazardous enough, without bringing in the restriction in section 10.

I should like to welcome this Bill as, indeed, I welcome any measure designed to help the hard-pressed farming community. In doing so, I should like to say that the improved public image of the Agricultural Credit Corporation over the past few years is a great step forward in the Irish agricultural sphere. I sincerely hope that trend will continue.

As we all know, agricultural credit is far too restricted in this country compared with the facilities enjoyed by our competitors in world markets, countries like Denmark, Sweden and Holland, to name a few, where I understand farmers are given credit at interest of only 1½ per cent or two per cent. Our restrictive credit system is all the more difficult to understand when we consider the report made by Mr. Gilmore, Deputy Governor of the United States Farm Credit Administration, when he visited our country in 1959. He estimated all farmers' assets at the important total of £885 million then, consisting of land, buildings, livestock, machinery, crops, money and credits.

On the other side, liabilities were estimated at £75½ million, and consisted of amounts due to banks, merchants, co-operative societies, hire purchase companies, the Agricultural Credit Corporation, amounts due under the County Council Small Dwellings Acts, and including a sum of £40 million under the heading of Land Annuities to the Irish Land Commission. The excess af assets over liabilities amounted to £809½ million in 1959. When we consider the increase in the value of land and livestock since then, this figure must now be greatly in excess of £809½ million. It has not been the practice to accumulate this type of information in this country but its importance cannot be overestimated. It shows the small extent of credit in relation to total assets and points to a definite need for the immediate extension of intermediate and long term credit.

The role that credit and the Agricultural Credit Corporation are playing in agriculture is indeed vital and essential, but it is useless, unless in its application, it is accompanied by education and efficiency in all its aspects as to production and marketing. The Agricultural Credit Corporation, I believe, also have a duty to ensure that their officers and personnel are efficient and educated in the needs of the agricultural community. They should also be capable of assessing the merits of proposals and plans submitted by our farmers, and especially those proposals and plans prepared in conjunction with our agricultural advisory service. It is distressing to note that not all of the plans prepared in conjunction with the agricultural advisory service and submitted to the Agricultural Credit Corporation are successful.

For this reason, I would appeal to the Minister and the Agricultural Credit Corporation to consider this matter. After all, our agricultural advisory service is one of the best in the world and these people are first-class officers in their field. They know the farmers, the particular farms involved and the problems entailed. When these people submit a plan, I am sure everybody can rest assured that it is workable. The officer, I am sure, is quite certain that the farmer concerned is capable of putting the plan into effect.

I also believe that the Agricultural Credit Corporation should, perhaps, take on more of these risky proposals.

As the Agricultural Credit Corporation is a semi-State body, its role should not be merely to compete with the ordinary commercial banks; rather it should be prepared to take greater risks than the commercial banks. When the local advisory service get down to working out a detailed plan for a farmer, I feel the obligation should be on the Agricultural Credit Corporation to facilitate that farmer to the best of its ability. On that score too, I would like to see some system brought about whereby the poorer sections of the farming community—the 25 per cent we are told are refused loans—could perhaps obtain loans or at least cheap interest loans, thereby giving them a chance to get ahead. All that has been necessary in the past for an unfortunate farmer to get into difficulty with his scale of payments was perhaps the death of one of his cattle or some other stroke of bad luck which was completely outside his control.

I would like to see the Agricultural Credit Corporation much more liberal in coming to the aid of the poorer farmers, that is, those under a £20 or £25 valuation, by introducing some system of cheaper loans so that they could all play their full part in the Second Programme for Economic Expansion. I believe now that the Agricultural Credit Corporation is getting greater scope and more money it should devote at least some of it to this poorer section of the farming community.

Whatever the form of credit, we in Ireland must realise how much we depend for our livelihood on our agricultural exports. In the main, these exports go to pay for the raw materials necessary in our industries. If there is to be extended development and expansion in our agriculture with inereased exports, there must be available extensive credit adequate to meet the needs of all sections of the farming community. I would make a special appeal to the Minister to ensure that as many of our farmers as possible should be enabled to help out in this drive for increased production, so that we may all enjoy a better and higher standard of living.

There are, I believe, two or three credit agents already appointed in this country. These people have a very important role but I do not think the Agricultural Credit Corporation should overlook the part that agricultural advisory service can play in this field. Let us at all times remember that the local agricultural advisers of county committees of agriculture are the first experts in this particular field. They have all local knowledge of the various types of farming techniques and methods and know the quality of land from one county to another. This is something that is not understood by everybody and, for that reason, it is best left in the hands of our local agricultural advisers to draw up plans for the individual farmers.

This Bill proposes to give authority to the Agricultural Credit Corporation to borrow up to £20 million for the purpose of making loans available to credit-worthy farmers. I think it is a very good step in the right direction and comes at the proper time. We are all well aware that there is a credit squeeze in force at the present time, no matter what anybody may say. When it comes to buying a farm at the present time, it is very difficult to get the necessary accommodation from the commercial banks. The same applies in other spheres, of course. The extra capital being given under this Bill will facilitate agricultural expansion and the increase of agricultural stock. Everybody familiar with agriculture will agree that the land of Ireland is under-stocked. Our land is capable of a far greater volume of output of live stock, crops or other kind of produce. We have a vast quantity of fertile land capable of putting up a huge volume of production, but of course the question of marketing the produce also arises.

At the moment, with the credit squeeze being operated by the banks and no credit squeeze being operated by the Agricultural Credit Corporation —except, of course, the measure of discretion which its officers will exercise—this Bill provides good compensation to the farmers who need financial accommodation for the purpose of increasing their stocks or going ahead with some enterprise they have in mind.

Lack of capital in agriculture has been traditional. Even if we examine, as Senator McDonald has just mentioned, the indebtness of agriculture at the moment in relation to the output from agriculture and the value of our exports, we can see that the attitude of the commercial banks has been more than conservative. We must find some outlet for increasing the amount of capital investment in agriculture. We had the World Hunger Campaign only a few months ago when it was impressed upon us that half the population of the world was starving and actually down to hunger level. At the same time, we have in this country fertile land capable of a huge volume of production but, having produced the goods, a marketing scheme must of course come into operation. The cost of transport beats this country in relation to many of the goods we export.

I feel the Agricultural Credit Corporation should continue expanding the amount of investment in agriculture. It should increase its organisations. There is, of course, co-operation as far as the various Co-ops down the country are concerned. They do a very valuable job in financing agricultural enterprise amongst their members in the country. With those co-operative societies and the extra capital available from the Agricultural Credit Corporation, we can expect greater expansion. We cannot expect any dramatic expansion with a lack of capital so that anything that can be done to increase capital and organise marketing societies will be all to the good.

We are all for developing a pattern of minimum price levels because it has happened only too often when farmers have had good crops, they were paid poor prices for them. They had to take sacrifice prices for what they had to sell. Therefore, we should, in addition to increasing the capital which will enable increased production to become available, go further with our marketing organisation. Finance was actually made available for a marketing scheme but the scheme never got under way. Marketing is a real problem as far as agricultural produce is concerned. We should not be afraid of increasing the amount of capital invested in agriculture, considering it has been the mainstay of our economy.

While I am speaking about minimum price levels it is only right to mention in passing that the situation regasding pig prices is becoming difficult and the situation in poultry is also becoming difficult. I am sure the Minister wiil be able to advise me in relation to one of these.

The Senator is going outside the scope of the debate.

I am only mentioning pig and poultry production. I should tike the Agricultural Credit Corporation to assist farmers to a great extent in connection with mechanisation. The flight of agricultural labourers from the land is at the rate of 10,000 a year. This is causing farmers to mechanise more and more. Unfortunately the depreciation in the value of this machinery is very heavy. The result is that many farmers, who avail of capital far the purpose of mechanisation, find themselves in real difficulty after a few years because of depreciation in the value of the machinery and, of course, the collapse in the value of that machinery, once they have got it. Much of that machinery is used only for seasonal purposes. It is not used all the year around. Therefore, the engine just lies in the farmyard and is used only at harvest time on the farm.

I should like to say, finally, that I hope to see the Agricultural Credit Corporation expanding even still further. The commercial banks, of course, are privately-owned. They are private enterprise profit-making concerns and are, of course, interested only in selective investment, whereas the Agricultural Credit Corporation could invest in agriculture, subject to certain rules in relation to the type of investment and the type of person to whom these loans would be made available. I believe the time has come when the kind of investment we get from the Agricultural Credit Corporation should be expanded.

Minister For Agriculture (Mr. Haughey)

This Bill, in the main, provides for an expansion of activity by the Agricultural Credit Corporation. It also has provisions which will enable the Corporation to carry on its operations with a great deal more facility. As such, I know it is warmly welcomed by the overwhelming majority of the Senators. I think the debate has shown we are all agreed on the fundamental importance of credit in agriculture and the necessity for increased credit facilities for farmers.

I am glad, also, there has been recognition of the fact by most of the Senators who have spoken that the Agricultural Credit Corporation has been doing a good job in recent years and that it has improved its methods, its approach and its outlook very considerably. I should like to avail of this opportunity to commend the directors and the staff of the Corporation for their good work in recent years. I am sure this good work wilt be continued and expanded in the years ahead.

The points of detail which have been made by most Senators are more suitable for discussion on Committee Stage. Indeed, they can be more adequately dealt with by a Committee Stage type of debate because the vast majority of them concern specific points of detail in this piece of legislation. It would be better, on the whole, if I did not attempt to reply to them in any specific way at this stage but left them over for a more satisfactory type of discussion on Committee Stage. I want again to commend this piece of legislation to the Senators and hope it will be given a Second Reading.

Question put and agreed to.
Committee Stage ordered for Wednesday, 30th June, 1965.