Agricultural Credit Bill, 1975: Second Stage.

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

The main purpose of the Bill is to increase the borrowing powers of the Agricultural Credit Corporation. The corporation, with almost fifty years of service to Irish agriculture, are now investing over £55 million a year in the industry. The big expansion in lending began in 1970. In 1972-73 their total lending was £28 million: by 1974-75 it had doubled to £56 million.

The corporation, a registered company whose share capital is held by the Minister for Finance, get their current funds mainly from deposits, repayments on existing loans and borrowing abroad. In 1975 for example they expect to lend £55 million and to finance this by means of £25 million deposits, £21 million loan repayments and £9 million foreign borrowing.

I should point out that the deposits scheme has been very successful and can be readily recommended to investors. Deposits earn 10 per cent interest at present and carry the guarantee of the Minister for Finance.

The corporation will give loans for most purposes designed to improve agriculture, the more popular loans being those for livestock, land purchase and improvement, buildings and equipment. They accounted for 45 per cent of ACC advances in 1974-75.

ACC also give loans for the purchase of seeds, grain and fertilisers, repayment of debt and family settlements and hire purchase for farm machinery. Of £56 million advanced in 1974-75 £40 million went to farmers and £16 million to merchants. meat factories and creameries.

Repayment periods vary. Loans to grain millers for grain purchase may be repaid within six months. Other short-term loans such as budgeted loans for seasonal farm operations are repayable within 12 to 15 months. Loans for livestock run for five years, land drainage for 15 years, land purchase and buildings for 20 years and dweiling houses for 25 years.

Interest rates charged by the corporation are based on the current cost of borrowing which has been exceptionally high in the past few years. Examples of their present lending rates are 12 per cent for budgeted loans, 13¾ per cent for a repayment period of one to five years, 15 per cent for periods of ten years and over.

The corporation sometimes operate schemes to meet special needs. For example they had a loan scheme for breeding stock at low interest rates from June, 1972 to December, 1973 to help farmers to increase their livestock numbers. A similar scheme of loans operated last winter to help small farmers buy feedingstuffs. The Associated Banks operated such schemes also. The State paid an interest subsidy on both schemes.

A high demand for credit is likely to continue as farmers and food processing firms will wish to increase their capital investment, modernise their premises and equipment and adapt their business to changing markets. As in the past the Agricultural Credit Corporation will have a very important role to play in financing agricultural expansion and adaptation. The corporation are constantly reviewing their pattern of lending, their credit terms and their organisation in order to meet the needs of their customers. I compliment them on their continuing progress and wish them success in their plans for the future.

I now turn to the main provisions in the Bill.

Section 1 contains the usual definitions. Section 2 increases the maximum amount which may be borrowed by the corporation. The ceiling of £120 million set in the 1973 Act is increased to £220 million. The revised limit should suffice for the next two-and-a-half years.

Section 3 deals with Ministerial guarantees. The Minister for Finance may guarantee the repayment of ACC borrowings. To coincide with the new ceiling on borrowing, section 3 increases the maximum amount of such borrowing which may be guaranteed by the Minister.

Section 4 gives the Minister for the Public Service authority to regulate the pay of the corporation's chief executive. It provides that the remuneration and allowances payable to this officer shall be subject to Ministerial consent.

Section 5 corrects an omission in the Act of 1972 which, in dealing with foreign borrowing, empowered the Minister for Finance to indemnify the corporation against losses or to receive any benefits arising from changes in exchange rates. Section 5 formalises the accounting provisions for such losses or gains.

I recommend the Bill for the approval of the House.

Naturally, this side of the House welcomes this Bill. It is natural when the need arises for the Minister to introduce a Bill to increase ceilings.

The reasons behind the introduction of the Bill are quite clear. We have seen in the last two years a decline in confidence in an agricultural industry that was up until that a viable, great national asset. Last year we saw the real decline in agriculture to the stage where people who had borrowed from the Agricultural Credit Corporation found it almost impossible to make repayments of loans. Confidence is gone in the meat trade. Last winter, on numerous occasions, the House was told that farmers who used the Agricultural Credit Corporation to increase their output had suffered severly from the down-turn in the price of meat. In many cases the farmers who borrowed from the Agricultural Credit Corporation were smaller farmers and farmers who supplied stock to the store trade.

We all know quite well, and I am sure the Minister himself would be the first to admit, that this seems now to have vanished and this trade in itself seems to have fallen to the lowest ebb that the country has seen in many years. A number of people invested heavily in sheep on money borrowed from the Agricultural Credit Corporation. I have seen what has happened to them. It is quite clear now that the disgraceful performance by the Minister for Agriculture and Fisheries regarding the sheep and mutton trade has left that section of the industry in a deplorable situation at this time, hence this Bill, to give people who are up to their ears in debt a little relief, to enable them to keep their heads above water.

We know what has happened in the pig industry. Small producers are now non-existent. There is nobody left in the pig industry except a few of the bigger type producers who are of no benefit to the farming community at large. I would safely say that the Government failed those three sections of the agricultural community in a manner unequalled in the history of the State.

There was a time when in counties like Galway and Cavan small farmers were numerous. They supplied store cattle, sheep, lambs and, indeed, pigs. Counties Galway and Cavan are typical examples of counties where there is not even one-third of the pig population of two years ago. There is no answer to that from the Government or the Minister for Agriculture and Fisheries, who, sadly enough, is not present now but who has listened to this same accusation before. There is a chorus of praise from members of the Fine Gael organisation for the Minister for Agriculture and Fisheries at a time when agriculture, which is a major industry vital to the nation is in a deplorable state. We see what has happened to people who borrowed from the Agricultural Credit Corporation in order to take land in conacre, to grow corn. This coming year unless some great change takes place there will be no profit for them because of the increases allowed by the Minister for Agriculture and Fisheries and the Minister for Finance in the cost of fertilisers and other items necessary to the production of cereals. There can be no profit in the growing of cereals, particularly to people who borrowed from the Agricultural Credit Corporation for this purpose.

At the beginning of the year we thought that a good price had been negotiated for beet but when one takes into account the increase that has been allowed in the cost of fertilisers, beet seeds and all the other things that go into the beet crop, the potential profit is whittled away.

I know men who last spring borrowed from the Agricultural Credit Corporation in order to grow beet because it was the one thing that appeared to be profitable, only to be faced with an astronomical increase in fertiliser costs. The General Council of the Country Committees of Agriculture asked the Minister and the Government to help to offset this massive increase in costs. They did not do so. The people who borrowed in the first instance for the beet crop find that any marginal profit that there might have been in it has been eroded. Should not the Government be ashamed that in Ireland today we have to import potatoes from Holland and such countries?

What about the weather?

Senator Killilea should not be distracted by interruptions into travelling even further from the main purpose of the Bill.

As always, I shall not argue about your ruling. There are many things hidden in the Bill that applies to an industry which, until two years ago, was our primary industry but no longer is.

The Senator is perfectly entitled to talk about the state of the agricultural industry and the need for credit——

A Chathaoirleach, I am sure you as a great national figure yourself——

That is quite out of order.

——find it incredible that we should import potatoes. I am sure you, Sir, as much as I, feel ashamed of the situation that has developed in regard to that crop. I know people who for the last four years consistently went to the Agricultural Credit Corporation to borrow money to invest in that crop. There are Senators in this House who will not contradict me because they know that at a particular stage in this House I introduced a motion designed to alleviate the problems of potato growers in Connacht and elsewhere but there are new Senators here whose memories are not as clear. Potatoes were left to rot by the headlands, and because the Government of the day did not do something to help the potato growers we find ourselves in a situation where we have to import potatoes. That is the reason, and let nobody state in this House that it is the Lord and the weather that have been responsible.

What Government let the potatoes rot?

The Government that were in office on 26th March, 1975, and the Government that were in power on 26th March, 1974. Senator O'Toole could not understand that because he, like many other people in that area, does not grow that much potatoes and he has no memory of it. I know it. I asked the Minister for Agriculture and Fisheries in this House to help me. I was refused. I remember distinctly asking for a production bonus for the farmers of Connacht in respect of potatoes so that those who grew them would get a price for them. I was refused by the Minister for Agriculture and Fisheries in this House not more than 12 months ago.

The people of my area provide potatoes for an industrial alcohol factory in the area.

However, there are people who this year tried to invest in the crop. Any man who last spring asked the Agricultural Credit Corporation for money to invest in the potato crop was advised to grow some other crop. That is an undeniable fact. I have personal proof of that. This is the reason that there are no potatoes in the country. Having borrowed money from abroad we have to spend it on imports of potatoes. The shame of it. We have to import potatoes whereas a small investment over the last two or three years could have us in a viable situation today. People who invested very heavily in an industry in which they had confidence now find themselves unable to meet the commitments they made because the agricultural industry has been let down. Every Senator knows the price of store cattle and store lambs today.

Debate adjourned.
The Seanad adjourned at 10 p.m. until 10.30 a.m. on Wednesday, 23rd July, 1975.