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Seanad Éireann debate -
Wednesday, 22 Feb 1978

Vol. 88 No. 5

Agricultural Credit Bill, 1977: Second and Subsequent Stages.

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

The object of this Bill is to consolidate the Agricultural Credit Acts, 1927 to 1975, and to make some substantive amendments in the existing legislation. The Agricultural Credit Acts deal with the objects, functions, constitution and financing of the Agricultural Credit Corporation (ACC) and with the various charges which may be taken on land and other property as security for loans.

I will at the outset give a brief review of the evolution and development of the ACC. The corporation, one of the first State-sponsored bodies in this country, was established in 1927. The purpose was to provide a specialised credit service for agriculture, particularly long-term credit which many farmers could not readily obtain from the commercial banks. For many years the progress of the corporation was steady though not spectacular. This was due mainly to the general social and economic climate. Farmers retained a traditional reluctance to borrow. Besides, the returns from agriculture and the restricted market outlets did not encourage large-scale investment in the industry.

During the sixties however, conditions changed dramatically. Prices began to improve and markets expanded. The prospect of further price increases and guaranteed markets on entry into the European Economic Community gave a further impetus to investment. These changes were soon reflected in the ACC's business. Their annual lendings, which totalled £5 million in 1965, had increased to £25 million in 1972. They reached £35 million in 1973 and £85 million in 1976 and rose to £107 million in 1977. Total ACC loans outstanding at the end of that year were £210 million.

The corporation themselves did much to promote and to cope with the increased confidence in agriculture. They conducted publicity campaigns in favour of increased investment, they introduced a very successful deposits scheme to help finance their lending, and they established several district offices. They now have 33 such offices, bringing their facilities within easy reach of the farmer and maintaining close contact with the varied problems of the individual customer.

The corporation give loans and hire-purchase for any purpose which, in their opinion, is of benefit to agriculture or horticulture, the main demands being for loans for purchase of livestock, land purchase and improvement, buildings and machinery, seeds, grain and fertiliser, working capital, debt funding and family settlements. They give loans to farmers and to firms in the agricultural processing industries such as creameries, meat factories and grain mills. Of the £107 million lent in 1977, £90 million went to farmers and £17 million to the processing industries. Repayment periods vary from one to two years for seasonal loans to 15 years for land purchase. Current rates of interest range from 8¾ per cent for seasonal loans payable within one year to 10 per cent for their farm development loans, and 11½ per cent for other term loans of ten years and over.

The authorised share capital of the corporation is £10 million, all of which has been taken up by the Minister for Finance. They also have Exchequer loans amounting to £12.5 million and foreign loans totalling £32.0 million. During the past few years they financed most of their business from deposits and repayments on existing loans. The intake of deposits in 1977 was £55 million, which brought the total amount on deposit with the ACC at the end of December to £175 million.

I will now deal with the Bill before the House. It is, as I already stated, mainly a consolidating measure. The immediate need is to increase the statutory limit to which the ACC may borrow, but the Government decided to avail of the opportunity to review all the legislation on agricultural credit and to introduce a single Bill to replace the present nine statutes which span a period of 50 years. In addition, a number of substantive amendments to the existing legislation are being included.

The Bill is divided into five parts Part I—Preliminary and General— consists of definitions and conventional provisions about charges on the Central Fund and the payment into the Exchequer of money paid to the Minister pursuant to the Bill. Part II is devoted to the corporation, its objects, powers, constitution and financing and the appointment and superannuation of staff.

Part III deals with chattel mortgages. It applies to mortgages taken both by the ACC and recognised banks, which in practice means banks holding licences from the Central Bank. It covers the registration of mortgages in Circuit Court Offices, the effect of mortgages in relation to the retention and disposal of mortgaged stock, the procedures and powers for the seizure of stock under execution orders and the penalties for breaches of mortgage agreements.

Part IV relates to various charges taken on land as security for loans from the ACC. The objective is to facilitate the issue of ACC loans in cases where land may be subject to equitable claims or where the occupier is merely a tenant for life or the personal representative of a deceased person. In certain circumstances, the ACC may get a priority charge for their loans but subject to a cash limitation. Part IV also contains provisions whereby the ACC can themselves make charging orders on land, provided that they have the prior consent of the borrower. Part V has provisions to facilitate and protect lending by the ACC to co-operative societies or to members of such societies. The Schedule lists the various enactments which are being repealed.

I now turn to the main amendments to existing legislation which are embodied in the Bill. Sections 8 and 9 empower the ACC to give credit for agriculture and horticulture. It is proposed to extend their powers to enable them to give credit for the fisheries industry also. I should explain that the ACC will not now begin to compete with Bord Iascaigh Mhara and other credit agencies. The intention is to provide for the future. Depending on the rate of expansion in our fishing industry it may become necessary in due course to supplement the credit facilities available from existing agencies. It is desirable that the ACC should have authority to give credit to the fishing industry if the need should arise.

Section 11 increases the authorised share capital of the corporation to £20 million from the existing limit of £10 million. This is also a safeguard for the future. It is not now proposed to increase the State equity in the corporation, but the section would enable the Minister for Finance to do so if, due to circumstances outside their control, the corporation were unable to meet their commitments from their normal sources of funds.

Sections 12 and 14 provide for an increase in the maximum amount which may be borrowed by the corporation and guaranteed by the Minister for Finance. The new maximum of £350 million as against £220 million at present is expected to meet the ACC's requirements over the next three years.

Section 15 increases the ceiling on the amount of ACC lending losses which may be guaranteed by the Minister. The ceiling, which is now £5 million, is being increased to £10 million. Another change is proposed in order to simplify procedures. The guarantees will in future be given directly by the Minister for Finance, rather than by the Minister for Agriculture with the consent of the Minister for Finance as heretofore.

Section 23 which contains various definitions relating to the use of chattel mortgages as security for loans, extends the definitions of floating and specific chattel mortgages. The new definitions will enable a borrower, if he so desires, to give a single charge for both a current advance and future advances. This will mean that separate mortgages and separate registration will not be required in cases where the same borrower is getting a number of loans over a period.

Section 26 extends the period for registration of chattel mortgages in Circuit Court offices to one month from the existing period of 14 days which is considered too short.

Section 37 contains a wider definition of "permanent improvement purposes". There are, for example, a number of provisions in the Agricultural Credit Acts whereby persons with limited tenancies can charge land as security for loans from the ACC provided that such loans are obtained for permanent improvement purposes, the theory being that the benefit of such investments will remain with the land. The existing definition refers to improvements to land and buildings only. It could be argued that this definition is too restrictive, since other improvements, such as investment in extra livestock or machinery, may also be of lasting value to the farm enterprise. It is proposed therefore to extend the definition of "permanent improvement purposes" to include any purpose which will be, or is intended to be, of long-term benefit to the farm business conducted on the land.

Sections 39 and 42 enable the ACC in certain circumstances to acquire priority rights over various equitable claims to the land. At present the corporation's priority is subject to a cash limitation of £10,000. To allow for changes in money values since that limit was fixed the ceiling is being raised now to £25,000.

Section 47, which deals with the manner in which tenants for life may charge land for loans from the ACC, contains a new provision to cater for minor full owners where no trustees have been designated in the original settlement. In the absence of such trustees, who would normally be appointed by the courts, the ACC are unable to advance loans for the benefit of the farms concerned. It is now proposed that in such cases the ACC may, with the consent of the President of the High Court, nominate two suitable persons to receive the loan. Such persons would, however, become trustees solely for the purpose of receiving the loan in question.

Section 48 repeats the existing arrangements whereby the personal representative of a deceased person may charge the land of the deceased as security for a loan from the ACC. Under existing legislation the maximum sum which may be secured in such circumstances is £10,000. It is now proposed to increase the maximum to £25,000.

Section 54 contains more flexible provisions relating to charging orders. At present the corporation may, with the consent of the borrower, make an order charging his land with money advanced by the ACC or liable to be paid by them on foot of a guarantee. The order, which is registered in the Land Registry, has to be made when the loan is being given. The ACC would, however, be prepared on occasions to give loans which were not formally secured at the date of issue if they knew that in the event of default in payment they could proceed to make a charging order in arrear. Section 54 as now drafted gives the corporation this option. The charging order would still be made with the consent of the borrower and it would take effect from the date on which it was made, not from the date on which the loan was originally advanced. Any priority rights acquired by other lenders in the meantime would not be upset.

The Schedule contains the nine Agricultural Credit Acts which are being repealed and replaced by this consolidating measure. Some provisions relating to the Agricultural Co-operative Societies (Debentures) Act, 1934, are being repealed also. The main effect of the repeal of those provisions is to dispense with the prior consent of the Minister for Agriculture to the issue of depentures by agricultural co-operatives. This requirement is no longer deemed necessary. It tends to delay the issue of debentures and to duplicate investigations which lending agencies will have to make in any event to assess the credit standing of their customers.

I have outlined briefly the main amendments proposed. I will, of course, be glad to give further details about these amendmnts and about other provisions in the Bill when we reach Committee Stage.

The Bill, which I am presenting to the House, puts all the legislation on agricultural credit into a single statute. This should be of considerable advantage to the many people who have to consult and operate the legislation from time to time. The changes in the various provisions for charging land and other property are proposed in the interest of flexible administration and the elimination of delays in the issue of loans. The new financial ceilings proposed allow for the big expansion in the ACC's business and the continuing high demand for credit for agriculture.

In conclusion I would like to congratulate the directors and staff of the corporation for their enterprise and initiative and their highly successful operations to date. May I also wish them every success in their future plans for the further development of Irish agriculture. I commend the Bill for the approval of the House.

We on this side of the House will welcome the Bill. It gives us an opportunity to speak on agricultural credit and on the corporation. We realise that only for the Agricultural Credit Corporation and the money made available to farming through that corporation the development of agriculture as it is today would not have taken place. The corporation was formed in 1927, over 50 years ago. The introduction of it at that time was very brave. It was something new that the Government at the time had to take into consideration and they sowed the seed of the development of agriculture. From 1927 to the 1940s the Irish State was a depressed one and it was necessary that every encouragement be given to the development of that State over that period.

We know from the Minister's statement that the amount of loans in 1965 had reached only £5 million, but that was not all the credit that was given to farmers during that period. I would like to take this opportunity of congratulating the co-operative movement which during that time gave to farmers substantial loans which were intended for the development of production on the farm, whether cereals or milk. The loans were given by the co-operative movement and paid back by the farmers through the supply of the product to the co-operative. That, in itself, allowed agriculture to develop during that period. It was then necessary to educate farmers who had been kept back by another Government who ruled here for a long time. The education of our farmers had been kept at a low standard, so it was then necessary that the farmers be educated to realise what finance was and how it could benefit the development of the country. Farmers during that period were very nervous about asking for loans because if they were unable to repay them there was a demand on the land which had to be sold. Again the co-operative movement helped out and allowed credit to enable the farmers to keep their land.

Much has been done by the Agricultural Credit Corporation by their easy long-term credits given to help the development, over a long period of agriculture. The Agricultural Credit Corporation and the successive Governments knew what farmers could do to increase agricultural produce if given the chance and the finance. The Agricultural Credit Corporation did that for them, especially after 1965. As the Minister stated, the lendings which in 1965 were £5 million had increased to £25 million by 1972. There was a reason for that. From 1965 to 1972 the farmers realised that they would be joining the EEC and they knew that by being members of that Community they would have opportunities and they would get the price which the product was entitled to make. The farmers had to accept bottom prices from the British market until we became a member of the EEC. After that the farmers had every chance to develop further.

As can be seen the lendings reached £35 million in 1973, £85 million in 1976 and rose to £107 million by 1977. That shows the startling development of farming over that time. The farmers realised that they had to have the money to buy seed, machinery and cattle. We must give credit to the agricultural officers who educated the farmers towards availing of those benefits. The farmers soon realised what credit was all about, why they should have it, and the profits they could make through having that credit. The proof is that in 1977 the lendings rose to £107 million.

I congratulate the agricultural officers who have been meeting farmers and drawing up plans for them so that they can use the credit available to them to benefit the whole community. The farmers who produced the product sold it to companies who, by the development and processing of that product, employed many people and especially in areas in which it was necessary to give extra employment. All that was done by the co-operatives with the help of the credit available through the ACC. We must also congratulate the agricultural advisers.

Even in the thirties and forties they tried their utmost to encourage farmers to develop. I think it is now necessary for the ACC to consider the middle 33? per cent of developing farmers. It is my opinion that the top 33? per cent of farmers have got the greatest benefit from credit and from the agricultural adviser, because they demanded that advice and they demanded the credit that was available to them. The middle 33? per cent, even though they were progressive farmers, were medium farmers—that means that they probably held 40 to 70 acres—who did not get full benefit from the advice given by the agricultural officers because they did not ask for it, and they were afraid of credit because they felt that, having credit, if the crop failed and the cows aborted or the development on the land did not reach a profit stage, they would be compelled to pay back money they had not got and they felt the land might be taken off them and sold to other farmers. They were a bit shy about that, and they needed further intensive advice from the agricultural adviser. They are now beginning to realise they have been left behind and they are now looking for that advice. My advice to them is that they should look for more and more credit. They can get help from the adviser and from the Agricultural Credit Corporation. Any help the adviser can give those people would be beneficial not only to them but to everybody in agriculture and to the community.

There is a problem when a transfer of land takes place when the land is in debt. Agricultural credit to fund the family debts over a period would allow the son, or daughter, or whoever takes over the land, to develop that land with confidence. Enough is not known about the credit that is available and there are still farmers who feel they would be better off without land because of debts and they might be advised by neighbouring farmers to sell their land so that their neighbours could purchase it and benefit from it. My advice is that they should examine their debts and I am certain the ACC would have sympathy for them and, with the advice of the agricultural officer, they could draw up a plan for the development of their land. The ACC would have sympathy for them and would give them a loan.

Another development that has been very beneficial to the development of the ACC and to the lending of finance to farmers is the development of local officers. A few years ago before the local offices were established it was very hard for farmers to get in touch with the ACC. Now it is easy for them to go to the local office in any county—there are a number of local offices in every county now— and put their case to the officials.

My information is that the officials are very courteous and give advice and help to the person concerned. This has been a very good development.

It has been said that the fishing industry is a development industry. We have heard a lot of talk about the fishing industry over the past couple of months, but I will not make any reference to that. People in the fishing industry are now getting to know their business and credit is now being made available to them through the ACC. They should avail of every opportunity to investigate that credit and to take long-term loans to develop their industry because the fishing industry in Ireland will develop over a time, given the opportunities.

The ACC helped the dairy industry over the period of rationalisation. The dairy industry was rationalised over a period of about seven or eight years and the ACC gave a hand in that rationalisation which has been a tremendous success. They now offer loans to farmers for bulk tank collection and this also is a great help to the farmer. His milk is cooled and put in a bulk tank and he does not have to go to the creamery. This gives him the time to concentrate more on the development of his farm. The milk is collected by the creameries and processed. I can assure the House that that milk is substantially better quality milk than milk delivered by the farmer to the creamery. There are many reasons for that. All that has benefited Irish agriculture. We should encourage farmers, especially the middle 33? per cent farmers to have discussions with their agricultural adviser and to develop their land with the help of the ACC.

Like the Minister I want to congratulate the staff of the ACC. Any time I met them they were courteous and very helpful. Any farmer I ever brought into their offices came away more educated, more convinced that the ACC were there to help him and advise him on developing his land to the full potential. There are farmers— and this is history—who do not like to get into debt. Everybody who can influence them to develop their farms.

even if they have to get credit from the ACC or from the bank, should do so.

This has nothing to do with the ACC, but in agriculture there is scope for socio-economic advisers because there are farmers in the bottom 33? per cent who need advice on having long-term agreements with neighbouring farmers to work the land. In the drawing up of plans the ACC might be able to give advice but the Government should provide instructors. They are very necessary especially in underdeveloped areas. I welcome the Bill and I am sure the farmers, especially the young farmers, welcome it also.

I welcome the Bill and I join with other Senators in welcoming the Minister of State. The Bill is to be welcomed by everybody, especially those of us who are associated in any way with agriculture. It is a good healthy sign to see that the Bill replaces outdated legislation. It puts the Agricultural Credit Corporation in a position to help farmers as they need help today. It also recognises that the farmers' lot is a changing one from day to day. The legislation puts an important emphasis on how necessary it is for the farmer to have ready money available. In the past, this might not have been recognised always because there were many difficulties. Some of them were created by the farmers in their reluctance to borrow money. The ACC have done a great job in the past in so far as they did not wait until the farmer came crawling on his knees. They went out and sold their services to the farmer.

All of us are very proud of the great role the ACC have played and the way they have helped the farming community. Certainly, the new legislation empowers them to extend that help and to bring it right up to date with farming needs. I am very pleased and I know this will help the industry which is our prime industry in rural Ireland. We recognise that the expansion of the ACC is accelerated by this Bill. It covers a very wide field and a wide area in which farmers can now get help.

There is not a lot of detail we can go into here apart from giving a general welcome to the Bill. Sections 8 and 9 provide for the fishing industry which can now benefit from the ACC. Coming from rural Ireland, I know the importance of the farming, fishing, tourism and tweed industries, and I have said that on many occasions. This Bill strikes right at the heart of an area where we can expand, where we can give more jobs and where we can help those who are engaged in developing the industries. I am very pleased it recognises that An Bord Iascaigh Mhara are doing a very fine job. There are other areas which may not be covered because fishermen, too, have to expand. There must be improvement in piers, landing facilities, lights, navigational lights and on the many needs of the individual fisherman. There has to be a steady input of money. The ACC have a role to play and I am glad that is recognised and that provision is made for it in this Bill.

I am glad the Bill also takes into consideration the many difficulties farmers have in proving title. Traditionally, this has always been a problem because farmers were reluctant to acquire title on change of ownership. The son generally took over where the father left off and all too often there was no administration, no change of name and no updating of title. The ACC demonstrated their sincere desire to help by the recognition of the many difficulties attached to holdings. difficulties with titles. They are prepared to be helpful. I am satisfied that is a useful contribution and is one more sign of a sincere desire to come to grips with the difficulties of farm titles and ownership.

The general scope where the ACC can make money available now is greatly improved by this Bill. I am satisfied the long-term needs of the farmer are now being catered for. There is provision in the Bill to make money available for much needed drainage, farm development, long-term investment of a kind no bank would touch or dream of putting money into and for the long-term future and health of the agricultural industry. That is very satisfactory and it will be well spent money. I have no doubt that within 20 years the scope of the ACC Bill will have to be expanded again. Their capital will have to be expanded because I have no doubt the ACC will play a very big role in the future and the farming community will get full benefit from this.

I welcome the Bill and I am certain the farming community as a whole will welcome it. It will help to serve our basic industry and only good can come from it.

Any Bill geared to encourage the growth and development of our agricultural activities must be welcomed. I say that despite the fact that I may make some observations later which may seem to digress from that point of view. I see this as a consolidating measure developing in the right direction. Consequently, mine is not an unqualified welcome, but it is a welcome. An increase in farm output and good husbandry always have and always will have a very substantial effect on the way the economy develops. It is in that context that I welcome this consolidating measure.

No worth-while agricultural undertaking should be held up in any way by lack of capital or credit. This is consistent with how we think in the Labour Party. Grants and accommodations should be related to the size and potential of the farm enterprise and to the efficiency and level of the training of the farmer, rather than the outdated method of land values. We would hope very much that, when people are looking for credit to develop, this would not be the criteria used by the Agricultural Credit Corporation or their advisers. For example, it is possible to have a profitable enterprise in chicken or pig rearing, glasshouse production and mushroom growing.

They can be situated on extremely bad land and in a small area of poor land with a small valuation. Therefore, we would be worried as to whether the criteria might be overemphasising at times the question of the land valuation or the size of the holding. It is the view of the Labour Party that all financial arrangements should be related to some sort of approved lands development plan or co-operative programmes which would be drawn up in co-operation with the agricultural advisory services. We see credit needs falling into two distinct categories. We see the need for working capital to pay for fertilisers and other current requirements and investment capital for the purchase of machinery. We see the credit needs falling into the category of the erection of buildings and the making of improvements such as drainage and reclamation. We see the Agricultural Credit Corporation—this is where we have a great deal of agreement—providing both of those facilities and we see also that it should draw up schedules for grants for various activities and should make special arrangements for regional needs. I do not think they have got that far yet but it is a welcome sort of development and we are possibly heading in the right direction. We see special interest rates or some cases where the interest rates would be waived in special situations because people would have certain difficulties or run into adverse circumstances.

We have been engaged in agriculture a long time but we are merely in a transitional period in the common agricultural policy. This presents a great many problems for the smaller farmers who may be judged in the same way as the farmer with the capacity to make a case showing he can do certain things with the land, develop the land, and so on. The same argument would not be accepted from a person with a smaller holding and a lower valuation. These are the kinds of things which present some problems in the sense that we are not saying that this consolidating measure should be the measure to solve them but we think that their solution should be an evolving process. We should start heading in that direction.

There is enough emphasis in this consolidating measure. It does tend towards saying we can work closely with co-operatives or other organisations but the emphasis is not sufficient to encourage the very desirable promotion of the co-operative movement.

In the past the co-operative movement has been crippled by lack of capital, lack of credit facilities and resources. It does not matter who was to blame —each party had an opportunity in Government—but this has been the story. We are talking now about a new situation. I would like to see the new situation developing and the agricultural co-operatives having greater access to the Agricultural Credit Corporation from the point of view of resources, credit facilities, and so on. We have all maintained a guarded neutrality about co-operatives over the years. We have never given them the kind of co-operation they should have had.

On the educational and management services facilities, I notice in the Fianna Fáil manifesto that they intend in respect of agriculture to develop an institution similar to AnCO. This is very worth while. I would give them full marks in that respect. It is a very good idea. Apart from AnCO, I do not know whether that will be sufficent in itself. There may not be enough opportunity within the scope of the Agricultural Credit Corporation for educational schemes. I do not know whether sufficient priority or sufficient encouragement will be given to the co-operative movement to get the best advice on administration. The Agricultural Credit Corporation should provide money to see that this advice is available. Naturally they will have to be paid back but it should be at a very low rate as compared to the conditions of loans in other areas.

By and large the Bill is welcome. It is evolving in the right direction. Possibly when the draftsmen were drafting the Bill they did not have regard to the fact that we are still evolving into the common agricultural policy, despite the fact that it has been there since 1971. Is there enough emphasis on the fact that we are evolving and are there enough facilities for the small land owners, the small co-operatives, and so on, to develop and have an equal opportunity of developing in accordance with their own needs? I wonder does the Bill provide sufficient scope for that. I am not saying it does not but, reading through it, it does not seem to me that there is great emphasis in that direction.

Finally, I should like to make a comment about the serious imbalance between different sectors of the industry. I do not know where the full imbalances lie, but you could have, for example, a cereal producer doing very well and the livestock producer facing very high prices and costs, and being hard hit on occasions, particularly in the bad land areas or upland areas, if you like to describe them as that, and I was wondering—I am not an agricultural man and I am making the best attempt I can—reading through the Bill if, in fact, sufficient emphasis has been given to the particular areas to which I have referred. I should like the Minister at least to ease my mind on this. We welcome the Bill. We think it is evolving in the right direction.

I, too, welcome this Bill. In particular, I welcome the increase in share capital and the increase in borrowing powers which are guaranteed by the Minister for Finance. The ACC have played a key role in helping to finance agriculture, our most important industry, especially in the past 12 years or so. The Minister has stated that loans made by the corporation have increased from £5 million in 1965 to £107 million in 1977. This is a spectacular increase by any standards.

In the past, especially before the sixties, farmers adopted a very conservative attitude to borrowing, due in great measure to low profits and to the uncertainty of market conditions. Allied to this, I suggest, was a rather conservative lending policy by the board of the ACC although it should be said that the legislation governing the activities of the ACC at that time was quite restrictive.

While conservatism still exists, the attitudes of the farming community to borrowing have changed for the better. Farmer confidence has, of course, been enhanced by improved prices and market conditions, especially since Ireland joined the EEC. However, in the context of the security available for loans, Irish farmers have borrowed well under their capacity when compared with other EEC countries. For example, a recent study carried out by the ACC estimated that the debt equity ratio of Irish agriculture was a mere 5 per cent. This compares very unfavourably with all the other countries of the EEC. It compares, for example, with a debt equity ratio of 11 per cent in the UK and as high as 40 per cent in Denmark. In addition to the conservative attitude of farmers to borrowing, the low debt equity ratio could perhaps also be explained by the inadequate services provided by the ACC and the banks in the historical context to meet the farmers' need. This was certainly true up to the 1960s. There has, of course, been a dramatic change since then. The ACC, as indicated in the Minister's statement, has district offices throughout the country manned by agricultural graduates and the banks too, realising the attraction of lending to the agricultural sector, have geared themselves to meet farmers' needs, not least by recruiting agricultural graduates as advisers.

The ACC have been highly successful in attracting funds to their deposit schemes which with repayments on existing loans, now meet most of their lending requirements. These deposits invested by Irish people in an Irish organisation are clearly preferable to seeking loans from the Exchequer or foreign borrowings to meet the corporation's needs. It is widely accepted that productivity levels in Irish agriculture are very low and there is enormous potential for growth in agricultural output.

Unlike the position in former years the lending institutions are now ready in terms of both advice and money, to match all viable applications for credit. I would like to see increasing emphasis placed by the financial institutions on the production of development plans by farmers before loans are issued to them. The Development Loan Scheme offered by the ACC, for example, requires the production of a plan for development. The discipline of producing a plan, though perhaps demanding and time-consuming, can only benefit the farmer in the long run. Plans can and should act as a spur to improve efficiency and improve technology on the land. There is, of course, an ongoing need for technical advice to farmers. The agricultural advisory service has a key role to play here. There is an urgent need for more and more agricultural advisers. The creation of such posts would lead to greater efficiency in the development of land through the valuable technical advice provided and, in itself, would mean the creation of more badly needed jobs.

There are two significant factors in the current scene which will make for greater productivity in agriculture. Firstly, since Ireland's accession to the EEC Irish farmers have benefited considerably from the annual price reviews. This transition period is now at an end, thus requiring higher productivity if farmers are to maintain and improve their farm incomes. Secondly, far from being a disincentive to development I share the view that taxation on farmers will act as a further incentive to higher productivity because farmers will be anxious to maintain and improve their incomes and living standards after tax. In conclusion, there is general recognition of the crucial importance of the agricultural industry to the Irish economy as a whole, I commend this Bill as a further step in the development of Irish agriculture.

I will not detain the House long on this Bill because, in accordance with the speeches already made, I intend to welcome the Bill. Indeed, there seems to be a general consensus as to its excellence. There is no doubt about it that the Agricultural Credit Corporation's history, particularly in the past ten years or so, has been one of the success stories of Irish industry and commerce.

The extraordinary expansion which it underwent, having first been founded back as far as 1927, occurred at a very crucial time in Irish agriculture. There is no doubt about it that Irish agriculture in the past 20 years has come through a sort of sound barrier. It has come right into the second half of the 20th century. An extremely traditional, cautious and, in many ways unproductive, attitude on the part of farmers both towards money and their plant— their plant including land and livestock —had tended to keep Ireland from moving at all. Part of that, of course, had to do with the relationship between farmers and traditional or conventional bankers.

If one were a short story writer or a novelist dealing with the Irish country scene one of the areas that perhaps has not been exploited by the O'Faolains, O'Connors or McGaherns would be the kind of interview that used take place between farmers and bank managers. I mean bank managers whose job was to lend money to the community at large and who had very little sensitivity towards discriminating between the needs of a man engaged in an industry like farming, with all its seasonal uncertainties, and dealing say with a shopkeeper. The same kind of language was used towards both but the same kind of language was, of course, grossly inappropriate for the farmer. A different kind of language was needed.

One could, if one were a writer of fiction, paint a great number of humiliating scenes where farmers who were not able to talk money, or able to talk that bank manager's language, were, at least secretly, humiliated by the kind of dialogue that frequently took place. The banks, with the best will in the world, tended to be capricious. There were times when they were told to lend plenty of money and there were times when they were told to put on the squeeze. They did this very often without much deference to seasonal change or the fluctuations of the agricultural market.

The importance of an outfit like the Agricultural Credit Corporation is that it is sensitive to these changes. It is sensitive to the needs of the country and it also realises that its own internal economic health is related to the economic health of the community it serves. It has a philosophy or should have— it has demonstrated that it does have —which can make it react flexibly to the needs of the farming community and, indeed the needs of the country as a whole.

Part of the success story was to change the Irish farmer's attitude towards borrowing because he was really very wary of borrowing, extremely timid, and worried about his relationship with traditional banking. The result of that was that he tended not to think in the long term. He was too afraid of overdrafts being called in in the short term. The result of it was that he tended to leave his land idle rather than farm it. He tended to neglect the long-term good husbandry that involved fertiliser and lime and all the things that land needs in the long term, the kind of loving care a farm needs and that pays off in the long term.

As Senator Hillery has pointed out, the notion of a loan scheme related to a plan for development has obviated that. It has meant that the farmer can go and talk to somebody who knows what he is talking about, who has as much interest in the welfare of his farm as he has and who can sit down with him, examine a scheme and advise him in the kind of language that is appropriate to the scheme. This has worked and it redounds to the credit of the Agricultural Credit Corporation that its business has expanded so rapidly and that borrowing on the part of a farmer is no longer regarded either as a humiliation or, indeed, as a risk but simply as an investment in the future.

If these changes had not taken place in farming we would never have met the challenge of the EEC as we have. Part of the success story has been the way in which our farmers have responded. There are some ways in which some of them have been shamefully negligent and derelict. For instance, they are playing the system with regard to the eradication of diseases from herds. Deputy Mark Clinton recently spoke, more in sorrow than in anger, about the manner in which there was a great deal of cheating going on in that area. There are black patches but, by and large, the farming community responded extremely well and are now turning their farms into viable rational units of production and relating them intelligently to the markets that are available. The Agricultural Credit Corporation deserve a great deal of credit for this but also great credit must go to An Foras Talúntais and the advisory service.

The other aspect of the Bill which is, of course, to be recommended and welcomed is the sense in which it has brought so much legislation, an accretion of small legislation down through the decades, together under one heading so that we now have the abolition of many small Acts and the consolidation of our agricultural credit legislation all under one compact Bill. It is extremely lucid, thanks to the parliamentary draftsman. Consequently I should like to join with other Senators in giving an unreserved welcome to the Bill.

I commend the Minister on his introduction of this Bill. The Bill, as presented, is intended to extend to the farming community the very necessary capital they require in a highly capital intensive industry. It is not often understood by urban dwellers how much capital is required to put a single acre of land into production. At present agricultural land is making up to £2,000 per acre but I wonder how many people realise how much more it takes to put that land into production. The capital required to run a farming enterprise cannot be generated by the enterprise itself in a lot of cases unless it has access to capital. It is in this area that an organisation such as the ACC is necessary.

For many years we have had the situation where farmers were depending on the ordinary financial institutions of the State, other than the ACC, for their requirements and they were dealing with people who had not got the expertise in farming to deal with their problems. Senator Martin mentioned the fact that farmers had to discuss farming problems with bank managers who may never have been on a farm in their lives and came up through a system of education which did not educate them about the needs of the farming system. In the main they did not serve the farming industry. I am not suggesting that this is a fact at present because all the banking houses have their own agricultural advisers and they are playing a major part in the development of agriculture.

Our farmers are probably the most educated within their own sphere of activity of any sector of the community. This education has been helped through the Departments of Education and Agriculture, the advisory services, the CEOs and the county committees of agriculture. It has also been helped by the farmers in their own organisations, the IFA, the ICMSA, the Small Farmers' Defense Association and the other bodies set up by farmers. No sector of the community has, on their own, set up so many aids for their own industry.

It am glad that the ACC will have access to the type of funds that are necessary for developing the full potential of agriculture. As the Bill states, the agricultural area is not confined to the farmer but can extend into areas that will promote, engage or participate in, manage or supervise any scheme which, in the opinion of the corporation, will, or is likely to increase productivity, whether directly or indirectly, or be otherwise of benefit to agriculture. That seems to say that the ACC can do anything because there is very little here that is not either directly or indirectly associated with the agricultural industry.

I hope the ACC, through this Bill, will be empowered to extend their area of activity into the service industries associated with the agricultural sector. Little thought was given in the past to the help given to the agricultural industry by the small garage, or the light engineering firm which usually is short of the capital that is needed. Such firms provide a great service for the farming industry. Without the machinery that goes with modern agriculture, farming would come to a halt in a very short time. Those people work weekends and at night. They are not like the bigger firms that close at six o'clock; they work hard in support of the farming industry. I hope cognisance is taken of the help the farming industry gets from this area.

Another area where I would like to see the ACC more deeply involved is in the area of research and development. Without research and development any industry will founder and the agricultural industry needs a lot of research and development. We have a certain amount of land here and there is no way we can increase that acreage but we can use that acreage better. Research and development into means of bringing this acreage into full production for our benefit is of paramount importance. The Agricultural Institute, the IIRS, other State bodies, and private companies such as those involved in grain, seed and fertilisers have put a certain amount of money into research and development but enough is not being done. I hope the ACC will be able to help in this area. In the long term the development of our agricultural land can play a greater part in our economy rather than the short term benefits, even though they might be great, that we might get from the discovery of oil or the mineral wealth we are now taking from the land.

I am glad that further borrowing powers are now available to the farming sector but I am a little perturbed about the huge amounts of money being borrowed at present by farmers to purchase land. This has driven the price of land in certain areas to an uneconomic level. Will farmers in the future be able to sustain the type of repayments this enormous type of borrowing entails? In an era of high inflation when industrial expansion drops the lending institutions find it hard to give out money. They have not found it hard to give out money in the agricultural sector because it is one of the areas which has expanded to a large degree over the last number of years. I wonder if the institutions have been giving out too much money because they found a productive area for it. I hope the farmers who borrowed such huge amounts to purchase land will not find themselves in real difficulty because of the high repayment content. We all hope the inflation rate drops further through Government and international activity. The other difficulty is that if agricultural prices do not keep increasing at the rate they have been over the last number of years we might have problems for farmers in this area. Good management of borrowing needs careful consideration by both the borrower and lender.

Senator Martin praised the draftsman—possibly I am not used to the language used in the drafting of Bills —but I question what is stated in section 12 (1) that the amount raised or borrowed and outstanding at any one time shall not exceed £350,000,000. Section 13 (1) states that the Minister may make advances to the corporation. Are the advances to the corporation the Minister may make included in the £350,000,000 or are they in excess of that figure? My difficulty lies in section 14 (2) because I am not sure what it means.

It is included.

That answers my question.

I welcome the Bill, or any measure that goes to make the availability of finance to the agricultural industry easy or more accessible to the ordinary man or to reduce the element of what is normally seen by the ordinary farmer as red tape. This sort of measure has been brought in before. This is the third or fourth measure of this nature we have had and each time we get an opportunity to discuss the corporation and its relationship with agriculture. In this age as time goes on we become more enlightened. Our approach to this sort of problem has tended to be progressive through the years and each Government, to some extent, improved on the record of their predecessors in certain respects. I expected to see some mention here of the composition of the board of the corporation. In the past I had experience of dealing with the ACC and I have no fault to find with the standard of the average representative—if we may call him a representative—who sat on the board of the ACC. Nevertheless, in this age, the time has come when governments should consider making places available on that board for the elected or appointed representatives of co-operatives and organised agriculture.

I know that people from within co-operatives and organised agriculture have got on to the board from time to time but they were a small number. They got there by virtue of the fact that they were nominated by the Minister for his own reasons and not because they had a right to be there. While Ministers may have, in fact, done a reasonable job in picking fairly good people for the board of the ACC now is the time to take a serious look at giving the agricultural industry, organised farmers and the co-operatives through their organisation, an opportunity to be represented there. It is all very well to say "We picked a good farmer and put him on the board; we picked somebody with a lot of experience in agricultural business and put him on the board". That is not enough. A person who has come up through the ranks of the ordinary farming organisations has more than just experience of the day to day life of a farmer, his difficulties, problems and the workings of the industry. He has a broader political-type view of where the agricultural industry is going. He sees it from the point of view of how important it is from a national point of view in international markets. He looks at it with a wider vision entirely from somebody who could be said to be a good or experienced farmer.

I am not blaming this Minister, saying it is a shame or it has not been done but in future I ask that this be taken note of and looked at seriously. The agricultural industry would be happier if this was the situation and their representatives would be, as they have always been found to be, of a very high standard. They should get there by virtue of their concern for the industry generally. Most of them also have an on-the-ground experience of agriculture.

Borrowing in agriculture is a very important subject for discussion. When one considers what the income of the average farmer has been over the past number of years one realises the amount of money that is actually tied up in any agricultural project, in land, stock, machinery, the provision of housing and farmyards. One can also see the amount of money that is invested there is out of relationship to the sort of income the ordinary farmer has been getting. There are many figures we can use to back up this. Some body said recently, it is a sort of blanket figure, that more than three-quarters of the people engaged in agriculture here have less than £60 per week of a farm family income. There we are talking not only about a farmer working but some of his family also, with his wife doing a certain share of the work. If one looks at the figures for the farm modernisation scheme one will see, regrettably, that in my county, Leitrim, something over 2,000 out of 5,800 farmers applied for classification. We have only found two farmers in the whole county to be in the commercial bracket and a very small number to be in the development category.

I do not set as much value on this as some people do. I do not say it is wrong that they have been fitted in there but what this proves is that only a small number of farmers, less than 10 per cent, with the best advice available to them through the advisory service and all the knowledge the Agricultural Institute have amassed and made available, could plan over a three-year period to achieve what is known as the comparable income which is something less than £50 per week. This is an indication of the sort of income people engaged in agriculture have and if progress is to be made and money is to be invested it gives us an idea of how difficult it is going to be to find that money in the industry itself. It is clear to everybody that that money will have to come from outside the agricultural industry in the form of farm credit. We know it will have to come from the Agricultural Credit Corporation for the most part.

From my experience as a farmer if somebody expresses an interest in availing of any sort of credit, the first institution that comes to mind is not the bank which happens to be nearest to me or the people who are doing the biggest public relations exercise in telling us about their concern for the agricultural industry and the number of graduates they have employed. The body I think of of course is the Agricultural Credit Corporation. I know there is a genuine sympathy there for the industry, a concern not only to invest money and get a return on it. The primary concern there is for the borrower and not for the person who has, in fact, invested the money with the body concerned. That is why I have a tremendous respect for the Agricultural Credit Corporation and for the people who work with them.

When they came into contact with the Agricultural Credit Corporation the farmers for the first time met people who had studied finance from an agricultural point of view, people who could talk finance and at the same time knew the language of the small farmer and his problems and his concerns. Senator Martin mentioned that it would make very interesting reading if one had somebody to describe the discussions that went on but I think it would make very sad, humiliating reading from my own experience—I think that Senator Martin realises that also—because until we had the competition of the ACC the banks had it all their own way. Somebody mentioned the job that the banks were trying to do and of course we know in the past that the job they were trying to do as far as most areas in rural Ireland were concerned was to collect money, collect the savings of people who lived on very small incomes and invest them, not in the area where they found them but in some other area where they were sure to give a good return on investment and to be more secure than if they went back into the area from which they had come.

That is a general observation I would like to make. In detail I would like to say that at the moment it is time to consider this two-thirds limit on fixed assets which is in force with the ACC. Nobody can borrow more than two-thirds of his fixed assets. It is true that we have a small number of people borrowing, yet we have too few people borrowing. If only one-third or probably a little more than one-third of the farmers have actually applied for classification in the modernisation scheme you may be sure that only a very small percentage of those who applied are looking for credit, and indeed very, very few of those who have not applied are looking for credit. Only a very small percentage of people are looking for credit from anybody at the moment. Agriculture needs a big investment. There should be the minimum number of restrictions on the amount of money that is available to any person. This can arise particularly where somebody with a very small farm that is not very valuable wants to do a very intensive farmyard enterprise, let it, or develop a very intensive horticulture industry, or he wants to build glasshouses. In such cases a two-thirds limit is inappropriate and while it is not a very great limiting factor, I believe there should not be any limit for people who want to make progress and borrow money, as far as the ACC is concerned.

The scope of the corporation has been extended in this Bill to include the fishing industry. That is a good idea: it is probably overdue. People engaged in the fishing industry are very lucky to have made available to them now the sort of borrowing agency that farmers have enjoyed for a number of years. It is not necessary to say that forestry is included but it is time that we should consider forestry as part of the agricultural area. Particularly, coming from my part of the country, I would like to see forestry included especially if there is evidence now that there is a market for timber and that we can produce timber that will mature very early, in 15 or 16 years. Possibly in the near future we may have timber maturing even earlier than that, depending on what it is wanted for.

I realise that forestry as an industry has been on the wrong track for a number of years. The prospect of any further development in the forestry industry through the Forestry Division is very, very remote. If we are to have afforestation we must have more participation by the ordinary farmers. We should not have the situation which we talked about particularly in my part of the country which is very fertile land from the point of view of producing timber: we do not want a clash between agriculture and forestry. We want the two industries to complement each other. There is something like 20 per cent of the land in the area I talk about that is too hilly for machinery to work on by any means and yet it is very useful land for producing timber. In some system of agricultural management this land can possibly be usefully used but in most cases from my experience, this land is practically going to waste. If some sort of long-term loan or annual payment were made available to farmers—the Minister has indicated to me that forestry is, in fact, included—

Subsection (1) (e) of section 3.

I am glad to hear that and I hope that farmers will make use of it for the reasons that I have given. It is a good idea that it has been included. As regards the Forestry Division buying farms and planting them, a new scheme mentioned by some Minister recently could fit in with the concept of more credit for this particular industry from the Agricultural Credit Corporation.

Some years ago I remember saying that while in the past we depended on agriculture to keep us alive, in the future we will depend on the agricultural industry to make us affluent or wealthy, give us more security and so on. In spite of the progress that appears to have been made in agriculture it is still regrettable that we have not sufficient farmers availing of agricultural credit not only to extend their holdings but to make them more efficient. Five or six weeks from now along the roads in any part of the country any man with an eye for what is going on in rural Ireland will be able to pick out the land that is being farmed and the land that is not. We will find that only a very small percentage of the fields that we pass by on the road home in any direction are actually worked to their maximum potential. There is not enough emphasis on what is the maximum potential of land and this is something in which the ACC will have to involve themselves.

At the moment money is being given out to some people to buy land to extend their holdings. In many cases the price of agricultural land has gone wild. Even for the best agricultural land you could estimate that the most that could or should be given for it, even where an intensive dairying enterprise is carried out, is something like £1,500 per acre; £900 if you are doing tillage or a very high standard of beef. The average farmer should not pay more than £500 an acre; otherwise he will be subsidising it with the land he already owns. I see many farmers borrowing money; getting some of it from the ACC and actually proceeding to subsidise the repayments with the land they already have.

We all know the way the blood pressure of the farmer goes up when that farm across the mearing ditch goes up for sale. But the ACC should not be stampeded or influenced: there is probably a political demand for money to be made available to extend holdings. I do not think that the dairy farmer who is not producing 1,000 gallons of milk per acre or coming near that figure if he has good land should be considered by the ACC and we have very few in the country coming up to that standard. He should be asked why he is not achieving this before money is made available to him to push up the price of land, to make it harder to get for the people who genuinely have reached the limit with the acreage they have or people whose holdings are too small to be viable. It should be looked at most carefully. Farmers for reasons of prestige and for many other reasons often like to increase their holdings because they say "When I do reach the maximum limit of what I can produce from this land the farm across the ditch will not be up for sale".

I know there is a limit to how much of their entire outlay the ACC can give, and it is a fairly small percentage, yet it seems to have a fairly big effect on the land market because rarely do I see a farm up for sale for which there is not somebody bidding who has a promise of capital from the ACC. I am not criticising their policy because they have been very constructive and careful in the past but that is an area that should be looked at more carefully.

In the context of those who are not farmers at present we had the old saying "The land for the people of Ireland". At the moment, from close observation, my worry would be people for the land of Ireland. We have not half enough serious, professional, competent full-time farmers who are going to get the maximum out of the land, make a good profit and be proficient in the business of agriculture. We need more of them. There are a few who are outside the mainstream of the agricultural industry at the moment; people involved in co-operative enterprise, people who served their time in some sector of the agricultural industry who are not farmers and who find it very difficult to get land. If they can prove that they have the expertise, I see no reason why money should not be made available to them to go into the industry at some level. Young farmers who have been working away from home and may be involved in agriculture or working in some sort of agricultural enterprise, who have saved a little money and want to buy land should be facilitated. They have training which they would not have got on their own farms with their fathers. When they want to borrow to buy land as far as I know they cannot do so unless their home farms are offered in security and it is a joint effort, an extension of the family farm. That is an area which could be looked at because I see no reason why young men who, while they cannot be described as farmers, should not get the opportunity to enter the industry if there is every indication that these people can plan to make progress and get a living from it. With the unemployment situation as it is we want to get as many people into the industry as we can. Not only would we be taking people off the job market in other areas but we would be bringing people into the industry who can produce and develop and who will generate employment in all the side-benefits that come from the agricultural industry.

If our farmyards in the next ten years were brought up to the standard that they should achieve in that time it could solve our unemployment problem. Towards this end, we should speed up all the processing of applications for the farm modernisation scheme; we should eliminate as far as possible the red tape and misunderstanding that have been involved in that scheme, find the money somewhere and get it into the agricultural industry and to the people. Unfortunately, too many people with land do not want to borrow. In 1974 there was evidence of this when farmers sold stock at 30 per cent of what they knew they could get for it the following April or May. Yet they refused to accept interest-free loans to keep that stock in the meantime.

That shows the large number of people in the industry who are not yet prepared to borrow. That is another reason why we should have very few or no limitations on those who are prepared to borrow and produce. Those are all the important points I wanted to make. I welcome the Bill and I ask the Minister to consider some of the points I have made.

First, I would like to welcome the Minister to the House and to congratulate him on his elevation from mere Deputy to the rank of Minister of State. This Bill is probably one of the most important Bills to come before the Oireachtas or that will come before us during the term of this Government because it provides extra finance for agricultural development. We all look upon agriculture as having been our premier industry for the last 50 years. Since we joined the EEC it has become possibly our greatest asset as a member of that Community. I particularly welcome the fact that the ACC down the years has been known as the body most favourably disposed towards the making available of finance for farm development. It has also been the lifeline of many farmers who were prepared to borrow. I was interested to note what Senator Martin said earlier today.

I remember in 1972 a neighbour came to me one day and said that he wished to get money to buy a small farm that was for sale next door to him. I advised him to see his bank manager. As Senator Martin said, he received a friendly welcome at the door but when the bank manager had a little chat with him in his office he told him that he was sorry but he could not see any future for him in farming. That man came back to me disheartened. I then approached the ACC on his behalf and the result was that he received there sufficient funds to enable him to buy that small portion of land. That farm made him into a farmer. It greatly increased his standard of living. Since then he has been in a position to pay off his mortgage. The way he has carried on since then is a credit to himself and to the ACC.

I would also like to welcome the increase in the share capital of the company which is of great importance. After all, £10 million was very small and I think that £20 million will be just about sufficient to last the three-year period after which this Bill will, hopefully, be revised. There is and there has been for many years a problem with regard to the availability of capital for young farmers. Many young farmers found it very hard to obtain adequate finance especially from the commercial banks. It was only after our entry to the EEC that the banks became at all interested in farming business. It is a slight slur upon the banks that they treated the farming community in this way until our entry to the EEC in 1973. The ACC have now become possibly the largest lenders to the farming community. I would like to express a wish that people in the farming and other communities who have money to invest would invest it with the ACC. This is something that must be brought home to farmers, that instead of investing in other organisations, they should invest in their own business. Most people invest in their own business to help themselves along. Anybody who has anything to do with an industry would only be too delighted to put money back into that business to help it on. It is in the farmers' own interest to invest with the ACC.

We should also encourage the ACC to make sufficient funds available for work such as land reclamation and land improvement, especially in the western counties about which we hear so much. I was surprised to hear Senator McCartin talk of forestry because in my opinion, coming from the county in which there has been much talk about forestry, there is very little need for the amount of forestry which is being talked about in Leitrim. If sufficient funds were made available to the young farmers who are taking up farming there they would be quite capable of making 8 per cent of Leitrim into good agricultural land. From my own experience of farming within the county, I found I was able to get the same return from beef cattle as farmers in other parts of the country such as Meath and Kildare which have been classed as the great farming counties. I have found that I can get the same or almost the same weight gain on cattle from summer grazing. This is something which farmers should be encouraged to do—reclaim land which has been classed as marginal land. I have no doubt that the ACC would be willing to play a full role in this sphere because, after all, agriculture is the main industry, particularly in the west.

If the ACC wish to invest money in forestry they must be prepared to make sure that the people who get the money are not going to plant land which could be used more fully for dairying or beef production purposes. This is something which will have to be studied closely if the ACC are to make funds available for this type of work. The ACC have helped greatly down the years towards the expansion of agriculture but if they are to continue to do so they must be prepared to take a little more risk in regard to projects brought before them by young people who are the farmers of tomorrow. These people must be given encouragement. They will get very little encouragement from the banks. Banks have been more than cautious in lending money to farmers. They are now prepared to hand it out readily in some cases to farmers to purchase land because they see in land a sound guarantee; they know that while their money is invested in land it is safe and that there is no problem in selling land should they be forced to acquire it for the recoupment of debt.

The intake of deposits by the Agricultural Credit Corporation in 1977 was £55 million and I have no doubt that if there was a full effort by the people generally this figure could be greatly increased in the years to come. There is also, I notice, a great increase in the amount of money being borrowed. It began at £5 million in 1965 and reached £107 million in 1977. From 1976 to 1977 there was an increase of 25 per cent and if you take 25 per cent of £107 million it will mean that there will be an extra £25 million borrowed this year. This injected into the agricultural industry will no doubt bring about a great return to the farming community and to the country in general.

It was said earlier that agriculture is our principal industry. It is, and there is no question about it, and if we are to continue to expand we must look to our natural products and the greatest natural products we have are our agricultural products. That is where our future lies—mainly in agricultural produce—and I would encourage the ACC to continue with the good work they have done down through the years and to make finance available where they feel there is any possibility of improving the welfare and the income of the person seeking it. I would also like them to make sure when lending, that they are slightly conservative and that they do not allow men to place millstones around their neck in the form of loans which they will not be able to repay. This is one thing we must guard against, with regard to people who want to borrow considerable sums of money. When you go to borrow money you must make sure that you are able to repay the necessary interest and principal. This is just the one fear I would have in making money available to the farming community, that some farmers might be inclined to force their luck a little too far.

The price of agricultural land will definitely have to be studied with regard to the ACC. At present they make available, I think, a maximum in some areas of £1,000 per acre. That is a considerable amount of money to invest in an acre of land and it was pointed out earlier by Senator Lanigan that it takes a considerable amount of money afterwards to bring this land into full production. I have no doubt that if the ACC continue the present policy of making finance available to the more prosperous and the more go-ahead farmers, within a short number of years they will take over 90 per cent of the farming business of this country. I think they are best entitled to handle it because after all they are the people who have the interest of the farming community at heart and have no other interest to look to and I would like to encourage them and I encourage the Minister to ask the ACC to make as much finance as possible available especially with the aim of getting full production from our land.

I would like to offer my few words of praise to the ACC for what they have been achieving for years past. One of the great problems that the ACC always had to contend with was the very situation that Senator Ellis mentioned a while ago—on one hand to be conservative enough to ensure that they got their money back and on the other, to ensure that they did not quench initiative even where the security might not be just good enough. I compliment the ACC on their very go-ahead policies and the fact that they successfully distinguished that thin line I am talking about because seemingly over the years their record has been so good with their clients that very few people have been in trouble for nonpayment.

The ACC in my opinion, being the financial input into agriculture, is by far the most important arm of this great industry. Over the years, were it not for the type of policy pursued by the ACC, we would have been in a lot of trouble because it took some of the banks a very long time to catch on to the fact that farming had a very slow return. I think this is where the great crisis is in farm lending generally. It is well to realise that compared with some other sectors money invested in agriculture gives a very slow return. I think that the ACC even at this stage should be prepared to give a greater moratorium to farmers because in my opinion the most crucial time in a farmer's involvement in loan repayment is the first three or four years of repayment. This may be just first class economics if you like, but it is a thing that many farmers and indeed many lending agencies seem to forget, that it is all very well for a farmer to borrow when he can repay. I was much struck by Senator Martin's experience in the past. The point, of course, about borrowing at any time is that it is very important not to borrow when you have to; borrow when you do not have to, if you know what I mean. That makes the difference. In rural Ireland many people over the years carry the stigma with them, if you like, that they only went borrowing when they really had to and, of course, for the wrong reason.

With the advent of the advisory service and its great involvement in farm economics this has changed a great deal but it would bring us back to a point Senator McCartin was talking about, the price of land and the type of people who are allowed to buy land, in that you have a hysterical approach in a townland when a piece of land locally is put up for sale. All purely economic considerations are thrown out of the window and many people at an auction in my opinion somethimes act in the same hysterical way as ladies, with all due respect, do at auctions: they usually wind up paying more for something than they intended to pay for it. It is at this point that the ACC must have a controlling hand. Certainly, from my knowledge of the ACC, they only back one purchaser. It is very important to bear in mind that we should not have a number of farmers being backed by the ACC for the one piece of ground because in that way we would have many problems and we would have higher prices for land than they could afford to pay.

I particularly like the regionalisation of the ACC for a number of reasons. One is that it brings the agency—it is more than a building or an institution—to local farmers. One of the factors of its success has been that its personnel have been readily available and, as somebody said earlier today, they speak a farmer's language. They have a sound knowledge of economics but they can put it across in a farmer's language. I should like to see more regional offices and I would suggest to the Minister today that it might be advisable in the future to give the ACC greater banking facilities. It is one thing to talk about an input of credit into agriculture but it is another to attract funds. I believe that a current account is a very useful and important way of fund raising from a banking point of view.

Despite the fact that there is a very attractive television programme advertising investment with the ACC, there is a bias with many people against investing in the ACC on the basis that it is entirely a farmer's bank and that only farmers should or would be allowed to invest in it. That is not entirely correct, but at the same time there is a barrier there. In large provincial towns it might well happen that if there was a greater variety of banking facilities at the ACC offices then investment in the ACC at that level would be much greater. The ACC should give a fair amount of thought to other factors in getting capital. They should start a scheme at school level for children. There are post office savings and so on, and there is a role for the ACC in that regard to get across to young people generally that the ACC, whether you are a farmer or not, give a good return for money. They are building a good foundation for all Ireland, not specifically for the agricultural community.

In the past couple of years the lending or borrowing system as we knew it has changed greatly so far as agriculture is concerned. Nowadays, in order to attract capital a project must be very well-thought-out. Whether it is for land purchase or capital development in machines, buildings or livestock, the project must be well researched to ensure that the farmer borrowing can repay and therefore that the institution lending will get their money back. However, if you place too much emphasis on security you will certainly arrive at a situation where the rich tend to get richer and the poor, while certainly not getting any poorer, will not get any richer than they are. I welcome the reference in the Bill to this aspect. Where there is a tradition in a family for farming —it is very important to note that I am not referring to fly-by-nights— where a man has made his living in farming over the years, even though he might be in a very small way and in the transitional class, with the help of the ACC he could make an excellent farmer provided he gets the financial injection at the right time and under the right circumstances. We know that money has to be paid for at its commercial value, but the system of repayment whereby interest only would be paid in the first few years only before the principal would have to be repaid would make a great change for the better.

I will refer to a very important scheme in which the ACC were partially involved, and that was the World Bank loans some years ago. That was a great success. At the time when the World Bank loan was floated, admittedly the type of farmer involved was a slightly larger scale type of farmer than I am speaking of. Nevertheless at a time when the livestock units per acre in Ireland decreased those of the people on the World Bank loan increased dramatically, and the advisory service have facts and figures to prove this. It was significant that that well-thought-out, well-researched project should succeed at a time even when agriculture was at a very low ebb in 1974 and 1975. From the point of view of the ACC emphasis must be put on a longer period of repayment and a breathing space after the loan is received.

I should now like to refer to the plight of a young farmer with plenty of initiative and energy to do a fine farming job although he does not actually own the land. He knows that eventually he will take over the farm but for the time being the old man in possession does not like to hand over the title deeds to him. There is provision in the Bill for certain categories, and I would ask the Minister to convey to the ACC that every assistance should be given to a young man who has proved himself through various organisations like Macra na Feirme, and who has worked his way through leadership courses and has carried out a term in technical training for agriculture. Even though he might not have the title deeds to the farm in question, he should certainly be entitled to borrow, and borrow fairly heavily.

I also ask the ACC to take particular notice of the number of farmers in the transitional category. The present categories are not in the best interest of Irish farming. Too many farmers are not in a position to avail of the financial help we get from Brussels. If they are in the right category and if they have the will to win, the ACC should be there to help them along the road. Anybody who was involved in the small farm incentive bonus scheme a few years ago will know what I am talking about. It was a pity that we had not a version of that scheme when we entered Europe. It was a fine scheme and it was in the best interest of the small local farmer who had every intention of bettering himself.

Finally, the mind boggles at the amount of credit that is required on a farm. If a young chap wants to buy a 40-acre farm it will cost him £60,000 to start with. If he has to stock it with 40 cows that is another £16,000, and between machinery and so on there is another £10,000. That is a grand total of £86,000. There is not a lending company in Europe who would hand £86,000 to a young fellow. The Agricultural Institute have publicly stated that to repay that amount, at normal lending rates and to live afterwards with the normal living expenses, taking a family into consideration, would be impossible, and he could not meet the debt. It is against that background that we must expand dramatically the amount of money available for agriculture if we believe that the real wealth of this country is in the land. There can be recessions of one type or another, but in the world of farming, provided we have a good marketing outlet and a good financial arm to finance projects, the sky is nearly the limit for agricultural produce. Taking into consideration that the institute say that we must be very careful about the type of financing, the ACC is best suited to identify the needs of farmers. We must recognise at the same time that the Government must inject many many millions more into agriculture than is actually being invested at the moment. I welcome the scheme so far as it goes. Finally, I put it to the Minister that he consider that the ACC be given greater facility banking-wise in order to attract greater, much-needed credit which can be granted to farmers again.

I would like at the outset to welcome the Minister of State, Deputy MacSharry. I think this is his first time in this House representing the Government.

I would like to make a few comments on the Bill, despite the fact that I come from a largely urban area. First of all, I commend the work of the directors, executives and staff of the Agricultural Credit Corporation. The record which the Minister of State has covered in his speech is a very satisfactory one from the point of view of the agricultural industry. Of course, if we had not over the past four or five years obtained access to more equitable markets, I do not think the record would be as good as it is. Nevertheless, I compliment the ACC on the work they are doing. Every member of this House will have no trouble in supporting the work of the corporation and the continuance of the necessary finance to enable this to continue. The provision of capital by way of loan or credit for individuals who have land or access to land is the only way of expanding the agricultural economy for their benefit and, of course, for the benefit of the community generally.

I welcome also the fact that the Minister has mentioned that of the credit made available recently £17 million has gone into the processing industry. I would like to encourage this as much as possible, because it is through the processing of foodstuffs produced in the expansion of the agricultural industry that we can find a potential new means of providing employment which is very essential.

I welcome the inclusion of fisheries as a worthy area for credit facilities and expansion, despite all the controversy that there has been. There is a future for expansion in the fishing industry, and again the prospects of processing should be there to be developed in the interests of the community and of employment. I would like to support the co-operative idea, mention of which was made by one of the Senators on the other side. This has not worked too well in rural Ireland, but it is one way of expanding agricultural resources. It has worked well in some areas here in industry and it has worked in a number of areas in Britain where industries got into difficulty. I support the idea that any groups who are willing to pool their resources through co-operative methods should be considered eligible for credit facilities from the corporation. I have not enough knowledge of that area to be able to expand on it any further except to say that I believe that the idea should be encouraged in our country as much as possible.

There is some disagreement between Senator McCartin and Senator Ellis on the question of forestry and of support for the idea of afforestation through the corporation. I am glad to note that the corporation are entitled to make credit facilities available for afforestation. I see afforestation as a potential source of considerable energy that we may badly need at a later stage. Senator Ellis has leaned against the idea because he believes that land should not be used for that purpose and that it should be used for agricultural purposes. It depends on the quality of the land, and the information available to me is that for over 25 years now something like half-a-million acres of marginal or sub-marginal land is being held by farmers throughout the country. If it has not proved to be suitable for agricultural purposes, then the idea of using it for some purpose such as forestry is one which I would recommend.

I support the increase of the maximum guaranteed by the Minister for Finance from £220 million to £350 million. Agriculture is an industry. It is becoming more of an industry and a business in our country and that is only right. Credit facilities should be available for energetic individuals who are engaged in this industry. I am quite sure that all members of the House and outside will be in agreement that in those circumstances people who can avail of these facilities should not be left short of capital.

I am glad to have the opportunity of making a few remarks concerning this Agricultural Credit Bill, 1977, and from this side of the House there is full support for the Bill on all Stages. I would also like to take the opportunity of welcoming the Minister of State at the Department of the Public Service, Deputy MacSharry, into the Seanad. I believe it is his first day here, and speaking as a westerner from a neighbouring county we may battle in future years but not for this evening and I am glad to welcome him here.

The Agricultural Credit Corporation have made a most significant contribution to agriculture within this country. They have done so for many years, celebrating their 50th anniversary in 1976, but the groundwork they did in earlier years might not have been sufficiently appreciated until we saw the most dramatic strides there have been in the past decade in agricultural production. It is allied to our membership of the EEC, to better marketing conditions, to a great period in Irish agricultural history during which the farmer has had for the first time the ball at his feet and the opportunity to make a reasonable source of income comparable to that which can be made in urban situations. Prior to this era we went through the gloom of the thirties and earlier decades when farmers found themselves in great difficulty for many reasons, not the least of which was practically total dependence on the British market. There was criticism of the farming community, of the fact that they were not prepared to borrow, and that they were not running their affairs in a businesslike fashion. The statistics from the last Agricultural Credit Corporation report give the lie to so many of these criticisms because they illustrate very clearly that farmers in this country, given the opportunity to earn a reasonable source of income, with a market at a fair price, are prepared to invest, to work and to increase production.

When we look at the staggering figures mentioned by the Minister in his speech in which we see that the lending rate as recently as 1965, only 12 years ago, was running at the level of about £5 million a year, and when we note that the lending to Irish agriculture in 1977 amounted to £107 million, a figure which is about 21 or 22 times as much as that of 12 years ago—which of course is dramatically above any level of inflation there has been in those 12 years—it is a very considerable achievement.

It is also very healthy in financial terms to see the extent to which the Agricultural Credit Corporation have been self-financing. We have had this staggering growth in lendings from £5 million a decade ago to £107 million today. Despite this staggering level of growth, in 1966 about 68 per cent of their total funds came from deposits and from farm credit bonds. Therefore a huge proportion of this lending rate came in the form of deposits which implied confidence in the ACC, and I suspect as well from a type of self-preservation within the farming community. I should imagine that a large source of these deposits was funds held on hands for different reasons by farmers in different parts of the country who had benefited during recent years. In that sense the reinvestment in the ACC, particularly by the farming community, was really a reinvestment in one's own future. In 1977 against a background of lendings of £107 million we see deposits running at a level of £55 million which is over 50 per cent of the total. All in all it is a very healthy position.

As I said at the outset, a Chathaoirleach, we are not quibbling with any of the sections in the Bill. It would be sensible in Part IV to arrange a better security position where the occupier is clearly the tenant for life, as is sometimes the case. I am glad to see that in Part V there is a facilitating of the co-operatives and a response to modern co-operative development. As I live on the west coast I am glad to see that, particularly in sections 8 and 9 where until now under the old Act the ACC was empowered by legislation to lend to the agricultural community for agriculture and for horticultural purposes, this has now been extended to allow the corporation to be involved in the fisheries industry.

I welcome that particularly, because one of the problems at the root of fishery development, apart from the matters at the moment concerning fishing limits which we hope are transitional in the long term, one of the biggest problems in fishing, as in industry or in agriculture, is investment. Today, whilst there is a very reasonable source of income in the seas from fisheries, there is a staggering level of investment required both in fishing boats and in processing plant, particularly in the fishing boat field, where the larger medium-range trawlers—we are not talking about factory ships or anything like that—have a capital cost in excess of £1 million each. Therefore when we talk of this type of financial structure there is a need for the updating of our thinking in regard to the provision of credit for fisheries purposes. Bord Iascaigh Mhara, who have done a reasonably good job, have a limited budget, and I am glad to see that, at least in theory, provision is made under legislation that the ACC with their larger credit resources at least can step in if desired. I welcome in particular that part of the Bill.

I support Senator Brugha in his remarks about forestry. We have had this history here, and people who have not studied the forestry position outside Ireland possibly do not appreciate sufficiently that within this country we have the highest share of forestries owned by the State and the smallest proportions of privately-owned forests anywhere in Europe. This is startlingly in contrast with the position that obtains in other countries where forestry is an important part of their economy. Norway and Sweden in particular have a majority of the plantations owned by individual farmers. We have been neglectful over the years in letting this type of thing happen and letting the notion go abroad that only the State can do anything successfully or economically in the forestry area. I do not think that successive Governments have done sufficient to encourage private plantings. At a financial level there simply has not been a sufficiently attractive grant available to the individual farmer to encourage him to bother his head with it. Recently there has been an increase in grant levels, which is welcome, but something a little more dramatic is probably required. I support Senator Brugha in his remarks about individual holdings of land. Whilst on all holdings you could call for maximisation and intensive production, there is on so much land, particularly in the poorer land areas of the country, a good deal of marginal land which will hardly be used for any other purpose. Much of this marginal land could in certain sections be developed for forestry purposes. It has a spin-off that has nothing to do with agriculture but we might begin to rebeautify this country with the development of forests. Indeed the Department of Lands have done a marvellous job. It is a desirable type of development, but it is really a side issue when we are talking about the ACC Bill which is before us.

We welcome the increase in the authorised share capital from £10 million to £20 million. In the broadest of terms I am inclined to agree with Senator Connaughton's remarks about the easing up of security requirements in certain cases. The people who should have first claim on credit from the ACC are traditional farming families. Unfortunately the problem we are dealing with, that of credit, is bound up as much with education and background as it is with agriculture, and the unfortunate position is that there is a direct relationship between credit and production, and as sure as day follows night if there is not investment in land there will not be production. If there is not intensive fertilisation there will not be adequate cattle stocks. If there is not investment in grain or if there is not investment in farmhouse activity on smaller farms in the pig industry, you do not get production. It is very essential that there should be the maximum use of credit, and unfortunately it is to an extent among traditional farmers with larger holdings that the least use is made of the credit facilities which are available. It is unfortunate that that should be the position, but certainly for that category any easing of the position in so far as security requirements and red tape are concerned would be particularly welcome.

What should be considered on a broader scale is the total agricultural land policy within the country. Credit is absolutely vital, and those who do not borrow today cannot produce. The people who ten years ago thought they were very wise in not borrowing and who adopted the mentality that they would spend only what they had in their pockets have been proven to be the fools, and those who were venturesome a decade ago have been the winners. Those who did not borrow at that stage in pounds that are now worth 25p each are now having to borrow pounds that are pounds, and the difficulty is compounded there.

The Government are making an attempt to develop agricultural output in this country. Indeed our Government did a certain amount of work in that regard in instigating a special report where the Department of Lands were concerned with a view to integrating the Department of Agriculture with the Department of Lands because of the direct relationship there. There should, of course, be a direct link, and the views of the agricultural instructors going around the country, who know the farms and who know the capacity of the individual farmers to farm, are very strong views that should be taken into account in so far as the allocation of land is concerned. However, that is not the full story, because even if you integrate agriculture and lands and if you subsequently make decisions about the taking over of holdings of land by acquisition or otherwise and if subsequent to that you reallocate these lands you have no guarantee either that you will get maximum production on the land you are going to reallocate. Credit comes into the picture here in the sense that an attempt should be made to integrate credit facilities into the reallocation of land in the sense that a condition of farmers getting land, in certain circumstances, will be a tailor-made loan from the ACC which they will be obliged to take up so that the State ensures in reallocating this land that conditions are inserted which allow for the maximisation of that resource both in the interests of the individual farmer and the part of the country he is living in, and in the interests of this country so far as agricultural exports are concerned.

I have nothing more to say, I welcome the Minister of State, Deputy MacSharry, a neighbouring Connacht man, and I commend this Bill.

I should like to make a few comments on the Bill and I should also like to be associated with other Senators in welcoming Deputy MacSharry into the House and congratulating him on his appointment as Minister of State. I welcome the Bill as I would welcome any measure which would be for the betterment and development of Irish agriculture. Irish agriculture needs every help, such as finance and credit, to modernise itself to compete with farmers in other member countries of the EEC. No doubt, Irish agriculture is not developed as yet to achieve its full potential. I am sure this is due to lack of finance, restricted credit facilities heretofore and a reluctance on the part of farmers to avail of whatever credit facilities were available to them because of the stigma of being in debt.

Anyone who was known to have accepted credit was supposed to be in debt. Commercial banks loaned money to farmers and they were committed to pay it back within a certain time. But, probably because of disease in cattle. or a bad harvest, they were unable to meet those commitments. A squeeze was put on and instead of getting extra time to meet their commitments, they were pressurised into going out of business which defeated the purpose of the loan. They had to sell their cows because of difficulties outside their control. This caused embarrassment and frustration to farmers. This is not the case at present because substantial long-term loans are available through the banks.

The World Bank, on submission of detailed farm programmes gave substantial long-term loans and this helped to increase stock. Farmers increased production and modernised their holdings which are essential to achieve full potential. The World Bank loans made significant improvements is this way and I am sure the ACC will insist that future applications will be accompanied by detailed, developed programmes drawn up by the farmers with the assistance of agricultural advisers. The ACC, the farmers and the agricultural service should cooperate in ensuring that money will be loaned to people to enable them to achieve the full potential of their land.

I would also like to see the ACC helping the small farmers. This is an area which has been dealt with already. The small farmer who is farming his land to its full potential could find himself outbid by a big farmer for land for sale. This must be controlled and the small farmer should get every assistance from the ACC. The ACC should work in conjunction with the Land Commission to ensure that the small farmer would not be outbid. There would be control to enable the small farmer to expand.

Long-term loans are essential for development. That has been proved already by the World Bank. Annual loans for the purchase of fertilisers and seeds are essential so that fertilisers and seeds can be made available to farmers at a certain time of the year at low cost. The interest rates charged to those people are much higher than the ACC rate of interest. This is something that all farmers and especially small farmers should avail of. I welcome section 23 which enables a borrower, if he so desires, to have a single charge for both a current advance and a future advance. This is a desirable measure and it will help farmers and make it easier for them to get future advances if they need them.

I also welcome the section dealing with forestry. Farmers can plant their own forests with the help of the ACC and any such incentive is worthwhile. Farmers are conscious of how valuable credit is and that can be proven by the fact that lending increased from £5 million in 1965 to £107 million in 1977, a remarkable increase in those years. There are now 33 offices throughout the country manned by agricultural graduates, men who know farming well and can discuss farming problems and needs with farmers, especially matters relating to finance. Another encouraging feature is the confidence people with money have in the ACC. The intake of deposits in 1977 was £55 million which increased the amount on deposit to £175 million.

I should like to congratulate the staff who were operating the scheme throughout the country. They are most co-operative and helpful to farmers and farmers' representatives. I also congratulate the board who are administering the scheme. Reference was made to how the board are constituted and appointed. This has been the practice for years and it has worked very successfully. There were opportunities before now to change that system and that has not been done. I welcome the Bill and I am sure agriculture will benefit from it and farmers will get the necessary credit to modernise their farms to achieve their full potential and compete with other countries.

I should like to join in the welcome extended to the Bill by Senators on all sides of the House and to pay tribute to people who had the foresight 50 years ago to establish the Agricultural Credit Corporation. We are all conscious of the part the ACC play in developing agriculture. For a good period of that 50 years agriculture was a depressed industry and farmers had the greatest difficulty in securing credit. But for the ACC many of them would not have been in a position to get credit in bad times on the land. It was said at that time that the only hope a man had of getting credit from the banks was that he was able to prove to the satisfaction of the bank manager that in fact he did not want it.

At that time the ACC came to the rescue of people who wanted credit for the development of their farms. The relatively strong position agriculture is in today is due in no small measure to the help given over that period by the Agricultural Credit Corporation. Capital is more readily available now to the farming community from banks and from the ACC, but a good deal of capital continues to be necessary because farmers have to modernise their farms and keep pace with modern development in agriculture. In many cases, it is necessary to be able to get credit at the time it is wanted. In that regard, I welcome this Bill.

Last year, the Minister's statement tells us, £107,000,000 was advanced in loans, £90,000,000 of that went to farmers, and £17,000,000 went to the processing industries. A breakdown of these figures would be interesting in so far as it might indicate to us whether these sums are being allocated by the ACC to the farming community on an even spread over the whole of the Twenty-six Counties. Until a good deal more work is done with regard to arterial drainage schemes in parts of the country, the farming community will not be in a position to develop to the maximum. The help afforded to other parts of the country by bodies like the ACC is not of much use in these parts and we could be in the position that those parts where the land is good is being improved steadily, while in other parts, because of the failure to get down to fundamentals like drainage and so on the land is less than good and goes on deteriorating. We have the evidence of An Foras Talúntais that 82 per cent of land is under-productive.

Serious steps will have to be taken to rectify conditions like that if agriculture is to reach its maximum potential in building up the economy. I think, therefore, a breakdown of the moneys allocated or loaned to farmers in different areas would make highly interesting reading. I would like to compliment the ACC on opening up offices in a number of provincial centres and to pay tribute to that body for the help the officers in provincial centres are.

I would like to draw attention to one point. A young man who grows up on a farm is naturally interested in farming. He has a certain training but the home farm is not big enough to give him a viable part for himself and so he pulls out and goes to work in industry in order to save money with a view to ultimately buying land for himself. Now, because he does not have a herd number, he has the greatest difficulty in getting money from the ACC to purchase land. I know the ACC have to be careful not to allow people into agriculture who do not really belong in it. A special case can be made for people with an agricultural background. In the past they have gone to England to get capital. Now there is less emigration and they are going to work in industry here with a view to being able to settle down on a farm some day. It is the exception rather than the rule that people like that get assistance from the ACC. I hold that every case is worthy of examination on its own merits.

Finally, with regard to private forestry, I am very glad to see that steps have been taken to encourage the private planting of timber. It is a pity we got out of that because we are denuded of trees to a great extent. Of course, the land was bad and people did not have the money to think in terms of investing in the future. Afforestation is an investment for future generations. I am wholly in favour of anything that can be done under this Bill and under the increased grants to encourage private planting and I wish all these schemes success.

I join with previous speakers in welcoming Deputy Ray MacSharry as Minister of State on his first appearance in this House and I know the nation will benefit from his undoubted dedication and hard work.

As a Member of this House, but particularly as a farmer, I welcome this Bill. It consolidates the legislation under which the Agricultural Credit Corporation will operate in future. The Bill streamlines the work of the board to enable them to meet the challenges of the future. We are living in an age in which, because of the various progressive developments in agriculture over the past ten to 15 years, there are now many bodies anxious and willing to become involved in the work of financing agriculture. In this regard it is important that we should recognise the wonderful contribution which the Agricultural Credit Corporation have made down through the years in providing finance for agriculture at a time when, perhaps, it was less attractive for some of the other now interested commercial agencies to finance the industry and I, as a Member of this House, would like along with previous speakers to pay tribute to the corporation for their work.

The Agricultural Credit Corporation like many other State and semi-State agencies had their teething difficulties. It is my one regret that the scope of the ACC was not broadened, say, 20 years ago, to enable substantial investment to take place in agriculture at that time, because had such investment taken place, we would now have reached a higher level of agricultural output and we would be in a better position to compete and operate within the context of the European Community and free trade. Be that as it may, we are now readily facing up to the challenge and it is a great credit to the corporation and, indeed, a great tribute to our farmers and those involved in agriculture that we are prepared to face the challenge. It is important to recognise that the expansion of agricultural credit here coincided to a great extent with the general changes in relation to agricultural development. I have in mind particularly developments in relation to agricultural education.

Without adequate agricultural education, without an adequate programme for investment, the entire programme for financial investment in the industry could not succeed. It is important on this occasion that we should recognise the contribution of one organisation, namely, Macra na Feirme, and the role they played in increasing the desire and the demand for agricultural education.

Arising from the application of agricultural education in the various programmes of Macra na Feirme, many people became conscious of the desirability of injecting further finance into the industry. For far too long— in fact, many Senators referred to this during the debate here today—there was a certain stigma attached to borrowing particularly by farmers. Farmers about whom it was known that they had borrowed large sums of money were generally regarded as being in a poor state financially. Yet all modern progressive thinking people, be they farmers or industrialists, recognise that capital is one of the agents of production and, without an adequate capital injection, it is impossible to develop any industry, and it would certainly be impossible to develop the agricultural industry.

From that point of view the provision of agricultural credit has not only benefited the farming community itself but has contributed to the general rise in farm incomes and has also been of tremendous benefit to the nation. Whether we like it or not—and we like to say so in public—agriculture is one of our greatest industries. Very often when we are talking about national investment, we place emphasis—I will not say too much emphasis—on investment in other areas and we do not sufficiently emphasise the importance of providing more money for agricultural development.

Senator McCartin, speaking earlier today—and I agree with him—referred to the fact that a very small percentage of our total land acreage has benefited from agricultural finance and agricultural borrowing. As Senator McCartin said, driving throughout the country one can immediately recognise the areas and the farms in which investment has taken place and in which the general pattern of farming has improved. Outside that limited acreage we are left with a vast amount of undeveloped agricultural land. Perhaps one could refer to it as marginal land. This land would benefit substantially from large-scale capital investment from a national point of view. It is one of our greatest national resources. It is there. Our land acreage cannot be increased—as somebody said earlier today—but it certainly can be improved. Any investment we make in the future for the improvement of that marginal land will in the long term give a very substantial return from the national point of view.

Reference was made to the importance of developing forestry, and I referred to this recently in other debates. I agree that we should not plant land which has potential for development other than forestry. There are large tracts of land which in the long term, or in the short term for that matter, are suitable only for forestry. We should tackle this problem at the earliest opportunity. At present we are reaping the benefits of the limited investment in forestry over the past 50 years. Many of our State forests are giving a very handsome return indeed on the investment made in them 40 or 50 years ago.

The increase in borrowing from £5 million in 1965 to £107 million last year speaks for itself and is also an indication of the willingness of farmers to borrow money to expand the industry, provided the climate is right and provided the incentives are available. I think it was Senator McCartin who referred to the fact that many farmers have invested in their holdings perhaps far in excess of the short-term income from those holdings. That is true, and we should compliment and congratulate such farmers on having had the courage to do so. Many farmers are not availing of the facilities available, and we should do everything possible to encourage them to do so.

Reference was made earlier in this debate to the desire on the part of farmers' sons to become involved in farming in their own right. Now that we have, we hope, introduced a successful leasing programme in relation to the allocation and subdivision of agricultural land, I hope the ACC will find some means whereby credit can be made available in the future to the young farmer who has leased a farm which he hopes to farm over the next ten to 12 years on short-term and medium-term arrangements to enable him to expand and to develop the leased land to the best possible advantage.

Reference was made also to the price of agricultural land. Anybody with any common sense will recognise that the price of agricultural land has gone far beyond its real value. I do not think farmers are to blame for the price of agricultural land. I am not specifically blaming the Agricultural Credit Corporation, but competition between the various lending agencies has contributed in no small way to the very high price of agricultural land. In many cases money has been made available to people outside agriculture and unfortunately, in too many cases, people are buying up land just for the sake of a safe investment even though in the short term they have to borrow some of that money.

I should like to compliment the ACC on the role they have played in the past in enabling farmers, and particularly small farmers, to purchase land adjoining their holdings. The ACC have taken a very sympathetic view of the farmer who approaches them and says: "There is a small amount of land adjoining my holding which I need to acquire and I want the capital to purchase it." In almost all cases I would say the ACC have reacted and responded in a very capable and sympathetic manner.

One of the welcome developments within the ACC over the past five to six years has been the fact that they have set up regional offices which have helped to bring them within reach of the farmers. They have staffed these offices with people who understand agriculture, some of our progressive, young agricultural graduates. Any farmer today who has a credit problem, but is backed up by an adequate or suitable development plan, need not have any fear of going into any of these regional offices and presenting his case to the regional manager. He can be assured that it will receive adequate and sympathetic consideration.

I welcome also the decision of the ACC to go into the open market and to look for investment. Their success in this regard is an indication of the public confidence in the corporation and also the willingness and the desire of people to invest in agriculture.

The point was made earlier that perhaps more farmers should use the corporation as a means of investing some of their profits. I agree with that idea because if the corporation's main function is to finance the future development of agriculture, why should not the farmers, who will benefit either in the short or long term from the activities of the corporation, have sufficient confidence to invest their surplus money, if they have any, in the corporation?

The provision to increase the share capital from £10 million to £20 million is welcome. It will just about meet the demands which will come from the agricultural industry in the years ahead. From a national point of view, and in relation to agricultural development, I would like to see greater involvement and participation by the corporation outside farming. I refer to the need to provide money for food processing, horticultural development and, as some speakers said, for forestry. It is only by developing and maximising all the potential within agriculture from the point of view of the farmer, the farm worker and the people servicing the agricultural industry, that the entire potential of the industry can be reached.

Earlier I referred to the need for the development of marginal land and that area extends into land reclamation and drainage. That is too wide a field to cover at present and it might be outside the terms of reference of the Bill. Only a limited amount of agricultural land and a limited number of farmers have benefited from the activities of the corporation and the entire agricultural back-up service. Until such time as we can bring about a greater involvement by all farmers we will not have any kind of national progress.

I should like to make a point which the Minister might take note of in relation to the risk which is always involved in borrowing. I refer to the risk involved in money for the purchase of livestock, a short-term investment which when all is going well can be a very rewarding investment. Those involved in agriculture realise that in a limited number of cases people who borrowed money for, say, the expansion of dairying and their dairy herd, were unlucky enough to run into serious disease problems such as brucellosis or tuberculosis. They found themselves having to dispose of a large proportion of their herd at a great loss. That could happen at a time when the demand on him to service a loan is most severe. The Minister should give some consideration whereby, for short-term livestock investment programmes, some form of an insurance is built into the loan to cover the farmer in such a situation. It could be a trying time for a farmer unfortunate enough to run into that kind of hard luck situation.

I want to join with the previous speakers in paying tribute to the members of the board of the ACC. They are giving their time freely and are doing a good job for the promotion and development of agriculture. I would also like to pay tribute to the staff who are manning the regional offices. They are courteous and willing to help at all times. I welcome the Bill and I wish the Minister every success in his new role.

I welcome the Bill and also welcome the Minister to the House and wish him success in his work. Firstly, I should like to congratulate the chairman, directors and chief executive of the ACC on the continuing progress this important semi-State organisation has been able to achieve over the years. The Minister told us of the very significant increase in the activities and in the rate of lending of the ACC over the past few years and credit is due to the board and executives of the ACC for this. I wish them continued success. It is a pity that we did not have at this time a new assessment of agricultural worth. A view is expressed that across the community we are in a post-industrial development era and that a lot of the new industrial jobs created will be at the expense of older firms. Therefore, we must look to the service sector or, more important still, to the agricultural sector for any worthwhile increase in job opportunities over the next few years. In preparation for that I thought the time would now be opportune to have a new look at our agricultural worth.

Not since the Gilmore Report in the early fifties has any serious study been carried out on farmers, farm credit and farmers' liabilities. The Minister should ask somebody to tackle this problem, even to update the Gilmore Report, so as to give people like those in the ACC and commercial banks an opportunity of planning ahead to see exactly what will be demanded of them. We must also accept that agricultural expansion, like any other business, is one that requires a certain amount of long-term planning. The development directives of the CAP are all geared towards medium and long-term planning of our agricultural resources. In line with that we should have a new study. Agricultural credit, or credit to the agricultural industry, has not enjoyed the rating or the place it warrants. This is mainly due to the fact that we have not updated any deep concentrated assessment of what the industry is worth or what the actual potential is. Without an in-depth survey it is very difficult to be able to sell the requirements and the needs. Up to now one thing that has marked agriculture credit whether it is credit to individual farmers or co-operatives has been the fact that it was blowing hot and cold. If it was not required in other sectors the banks were always anxious and willing to give it out to the farmers.

We have not had a long-term policy in this regard and that is unfortunate. Most people who are refused facilities by one bank for one reason or another go to another bank and are accommodated. The same applies to the ACC. I get the impression that the ACC is not the leading finance house so far as agricultural credit is concerned. That is a pity. Other Senators mentioned this also. The ACC, who have a proud record, started at a difficult stage in our history and have made tremendous strides. The only criticism I have of the ACC is that they have been over-conservative, they have not taken the risks we could have expected them to take. I would like to see that changed.

The most important section of the Bill in my view is section 12 (2) which empowers the ACC to borrow outside the sterling area, or outside the State. This kind of borrowing has its problems in as much as the relative rates or the various currencies can vary, whether Snake currencies or otherwise. The Minister is to be congratulated on writing in this guarantee to enable the corporation go to either the European Investment Bank or to ordinary commercial conglomerates in Europe or elsewhere for the finance necessary for their schemes.

When the Farm Apprenticeship Scheme was introduced many years ago the idea was that the new farm apprentices would be given an opportunity to set up new units on their own. This has not been possible. Where people go through a semi-State organisation, or an organisation which is in the main financed by the State, after getting a certificate of competence in farming, they should be offered favourable facilities to set up in their own right, whether it is by a new leasing arrangement or, indeed, a direct purchase. With the price of agricultural land it is hardly reasonable to expect young people in their early twenties to borrow 100 per cent of what would be necessary to set them up in farming. The ACC should introduce a scheme to help those young people set up on their own. Farming is changing; it has become more commercial and we need to have more people who will approach the entire problem from a commercial and businesslike point of view.

I am not saying that farmers, in general, do not do that but, nevertheless, young people seem to be able to take up more modern methods faster than many of us who, perhaps, are a little older. There is an opportunity here too, in co-operation with other semi-State organisations who have large holdings of cutaway bog, to look at this problem and see if the half million acres of cutaway bog in the central plain of Ireland, when it becomes available towards the end of this century, can be reclaimed and divided up in new holdings. There is a perfect example in Holland and parts of Denmark. We should have a new scheme and put people on these presently uninhabited areas who have gone through an apprentice course and proved their ability.

The ACC should be in a financial position to offer or grant aid to specific research by An Foras Talúntais. An Foras Talúntais over the years have given tremendous service to the development of the farming industry and community. Nevertheless, one detects a clash between the semi-State organisations. A number of studies into agricultural finance would certainly benefit the ACC. Indeed, the same applies to the ordinary commercial banks. An Foras Talúntais should be financially equipped to have a look at problem or new areas that are coming to the fore.

Another area which requires urgent attention is the financing of farm settlements to aid inheritance. Looking at the statistics it is true to say that progress in this area has not been that good. As a matter of fact, the Farm Retirement Scheme has been slow to take on. It is not that it is financially unattractive but that it is something that has not been done before. The farming community, conservative as they are, are slow to accept new ideas. Help should be given towards providing the finance to enable younger people to take over farm management earlier. Indeed, if I read section 42 correctly, the Minister may be doing that. I welcome that because there are so many farmers who have not got their titles registered. We see often that deeds are in the name of a grandfather and that administration has not been taken out over a number of generations. This is very common in land ownership. If section 42, as I read it, helps to improve that situation it is a very welcome provision. I compliment the Minister, and the draftsman, for including it.

I spent a considerable time working on the mainland of Europe and I came to the conclusion that it would be of tremendous advantage to the Irish farmers in general if the ACC were to provide the same or similar services to those the agricultural credit co-operatives provide for our competitive farmers in the other European member states. I was looking for an opportunity of mentioning this for a long time, I am always envious when I see the credit facilities offered to farmers in countries like Holland, Denmark, Germany, and even France. I hope the Agricultural Credit Corporation will now become good Europeans and will extend to the Irish farmers, the potential borrowers, the same facilities that our competitors enjoy, and have enjoyed, for many years.

I would also—and I think it has been mentioned by many Senators— like to mention the fact that the ACC have, over the past number of years, opened offices in practically every county, even in more than every county. This has been a tremendous improvement. It has meant that the agricultural adviser attached to or in charge of the regional area has been able to come along and talk to farmers and that farmers could, on appointment, go in to see him. This has been a more businesslike arrangement. I would hope that the ACC would be given an ordinary banking licence by the Central Bank to enable them to provide an ordinary counter service. In this way, it should be possible for the ACC to boost the amount of money on deposit with them. From time to time various farm organisations advocate a farm banking service. It would be much more beneficial if we could have the ACC provide that kind of service by expanding their present operations to include an ordinary commercial banking service. They have offices in each county, certainly in all of the larger towns. I do not know if they are all adequate but, nevertheless, they have a presence there and it should be possible to expand their operations to give an ordinary banking service to the farmers who would want, not only to borrow from them, but to deposit with them in the knowledge that that money would be going directly to develop the agricultural industry as a whole.

The Bill enables the ACC to increase their borrowing power to £350 million which looks quite a significant figure and a significant jump from the previous figure—I think it was £220 million—and I hope that they will be able to reach that target before 1980. That, in itself, will give the House an opportunity to discuss the matter when they come back to have this ceiling raised. It will give the House an opportunity of looking at the progress made and this is necessary because of the changing nature of agriculture finance at present.

Section 17 is a peculiar section dealing with disqualification of directors on being nominated to fight an election in either the Dáil or Seanad. I would like to ask the Minister why the disqualification should be imposed because of mere nomination. Would it not be more equitable to have a disqualification in the event of a director being elected to either the Dáil or Seanad or being elected directly a member of the Seanad? It is unfair to penalise people just because they opt to stand for public office. This is a narrow-minded approach that we have in this country to representation and to the public service as a public representative.

You do not find that narrowminded approach in any other country. The impression is that you are penalised if you want to offer your services. Any man who has served in such a capacity, as a director of a semi-State organisation, would have a considerable amount of experience to offer to the House. After all, if we are going to have a proper reading of our legislation here, you need people with wide ranging experience that can speak with authority and with experience and competence on the various matters that come before the House. I would like to see the Minister change that and only have the disqualification in the event of a member being elected to either House or directly elected to the Seanad. We should not in any way deter people from seeking public office.

One of the big problems retarding agricultural progress at present is the lack of staff in the county committees of agriculture. In order to get a loan from a bank or from the ACC, it is necessary for a farmer to have a farm plan over a number of years, say, a five-year plan. It is not possible to have that unless it has been drawn up and approved by an agricultural adviser. There is not a private company that I know of in operation that can provide that kind of service. It would not be possible for an individual farmer to come to a Dublin-based company, even if one did exist, for the simple reason that to draw up a working plan for any particular farm situation the planner, in this case the agricultural adviser, needs to know not only the farm but also the individual farmer and his capabilities and his work in all ways. This is a big problem. It may be an application for land drainage; the applications are mounting up because there is not clearance from the agricultural advisers.

In my own county of Laois we have been asking over the last two or three years for an increase in our staff to meet the actual demands and even presently our entire staff are working almost totally on drawing up farm plans to the detriment of the traditional advisory work like crop husbandry which must take a second place because the urgency lies with farm plans. If people want to apply for a loan for land reclamation they must have a farm plan or if they want to seek credit facilities they must have a farm plan. I would make a special appeal to the Minister to ask his colleagues, the Minister for the Public Service and the Minister for Agriculture, to sanction the applications for extra staff by agricultural committees. I am sure that every one of the 27 committees have applications before the Department of Agriculture seeking an increase in staff to tackle this problem.

There is not much point in the ACC increasing their lending powers, raising their ceiling by £100 million, if the numbers of applications reaching their desk cannot be increased. It is a problem that we have on the ground and it is one that is causing tremendous frustration amongst the farming community and indeed among the advisers themselves. I hope that something can be done about it with the least possible delay.

Those are a few of the observations that I wanted to make on this Bill. I certainly welcome the Bill. The Government have taken the opportunity of bringing the entire agricultural credit situation up to date. I would like to see the Agricultural Credit Corporation taking some greater risks. Practically all of their schemes are copperfastened at present. Having regard to the work and the value of agricultural holdings at present I do not think that is really necessary. I would hope that the ACC would be able to take an easier look at many of the applications that they have turned down in the past. Each applicant, each farmer who is operating as a farmer is entitled to at least a first chance and it is not just good enough for an institution like the ACC who were established to do a specific job to sit back and say that the plan is not right or that they do not think, looking at the thing from afar, that he can reach the targets that are proposed or give any one of the many reasons that they from time to time give. I wish the corporation continued success and I hope that they will be able to reach their ceiling again in the very shortest possible time.

First, I would like to join in welcoming to the House the Minister of State and in congratulating him on his appointment to that office I would also like to join in welcoming the Bill. I will be very brief. I do not mean to repeat all the reasons given— and they are many—why this Bill is so welcome this afternoon. Suffice to say that the Agricultural Credit Corporation have done an excellent job over the last 50 years and the proof of that is in the fact that this is also a consolidation Bill. There are nine Bills repealed which shows that the Agricultural Credit Corporation have succeeded in meeting the demands of the agricultural community as it has changed over the years and this Bill is now putting it in a position to meet the present demands of the agricultural community.

It has been mentioned today that the rate of borrowing per acre is much less here than in some of our partners in the EEC. That is not quite the same as the investment per acre although it is quite true, and it is also true that our production and productivity is much less than in some of our competitor countries in the EEC. The purpose of this Bill is of course to increase production.

In this Bill there are two parts: it provides money for agriculture, but it also provides money for processing preparations and for marketing. I just wish to make one point on that. To a certain extent, a farmer will have to increase his production from now on because if you are in a borrowing position and in a position of inflation and increasing prices there is a certain amount of security to meet your loan charges by roll-over, but if the prices are not going up the only way you will meet your loan charges is by increased production. If you want a farmer to really put his heart into increased production he must be assured of two things: one is that he will have a market for his product and the other is that he will get a reasonable price for it. If he has those two things then the farmer will make every effort to increase production and therefore use the money that is being made available to him under this Bill.

We have already some organisations that help the farmer in this position; we have the Pigs and Bacon Commission; we have Bord Bainne which does an excellent job; in certain cases we have contracts given for beet growing; contracts given for growing malting barley. But there are other things. For instance, last year we had a shortage of potatoes; this year we have a surplus of potatoes; goodness knows what we will have next year. Will the farmer grow any potatoes at all? Then we are importing vegetables. It seems extraordinary that we have to import vegetables. This Bill refers to our fishery industry and we are also importing fish. So, there is just this one point that I wish to make and it is that there appears to be a case for rationalisation and co-ordination in this field so that instead of importing vegetables we export them; instead of importing fish we export them and that we control our production so that the farmer will know that he has a market; the fisherman will know that he has a market and will have a reasonable price for those products. I do not think that there is yet an organisation for that purpose, and this should be looked into. With that comment, I welcome the Bill.

I do not want to delay the House but I would like to join with the other speakers in welcoming the Bill. It gives me an opportunity to pay a tribute to the Agricultural Credit Corporation. I refer in particular to the people with whom I have most dealings and that is in my own town, in Carlow. There are about 33 officers now throughout the country and only within the last month I had the privilege of being present at the official opening of a very up-to-date office in Carlow. This speaks volumes for the work of the ACC and the good work they are doing with regard to their business both to their own advantage and to the advantage of the agricultural community whom they serve. My county is very much an agricultural county, and indeed on that occasion I heard the Chairman of the ACC mentioning the turnover of some years ago in the office in Carlow—which was a rented office—and the extraordinary increase that has taken place over the past few years in turnover there. If the ACC were not giving the service, they certainly would not be doing the business.

I want to refer here to the figure mentioned for annual lending in 1965, £5 million whereas for 1977 it is £107 million. That is an extraordinary increase within these few years.

Section 12 provides for an increase in the maximum amount which may be borrowed by the corporation and guaranteed by the Minister for Finance. The new maximum of £350 million as against £220 million at present is expected to meet the ACC's requirements over the next three years. When this Bill eventually passes all Stages, does it mean that if within the next three years that figure is not enough to meet requirements the Minister of the day would have to come back here to the Houses of the Oireachtas to get that figure increased further? With inflation and high costs it is quite possible that the figure would not be adequate. I am not here to question it, but when you look forward over three years there could be an underestimation as regards requirements.

These are the few comments I wanted to make. I do not want to delay the House, except to pay a tribute to the ACC and to hope that they will continue for many years to give good service. While the interest rate is attractive, I suppose, we would all like to see a lower rate. I do hope they will continue to make loans available at an attractive rate and to be as liberal as they can possibly be with the granting of loans especially to people who are engaged in agriculture. We all know that agriculture is the backbone of this country and always has been and it is important that a corporation such as this should not be too stringent as regards the amount of money given or the sanctioning of loans.

I would like to thank all the Senators for their very kind words of welcome to me here as Minister of State. Before I go into the points that were raised by many Senators, one thing that was common to all of the contributions was the welcome for the Bill and the praise and support for the board and staff of the ACC. We wish them every success in the future.

Many Senators pointed out, Senator Butler in particular, the growth in borrowing by farmers from 1965 to 1977, which, as I said in my original address, was very significant and I think we covered the reasons for it. He went on to congratulate the agricultural advisers on the encouragement and advice they give to farmers and I would like to be associated with those congratulations. The advisers have a major role to play. Apart from the finance provided by the ACC, unless the encouragement and advice is there also through the agricultural advisory services, then there would not be much progress. It is good to see that all are working well.

One point which the Senator made, and which I agree with, is that many aspects of the activities of the ACC are not as widely known as they should be. He specifically pointed out the debt funding facilities and the family settlement facilities available from the ACC. We can, I am sure, ask the ACC to make those arrangements more readily known to the farming community at large.

Senator McGowan stated—many other Senators mentioned it also—that ACC facilities were being made available now for the first time for fisheries. Everybody has welcomed that. I think that it is important that it be seen in the light of the statement I made at the outset, not in any way in competition with but to supplement the role of Bord Iascaigh Mhara.

Senator Harte spoke of the waiver of interest on ACC loans. There has not been any waiver of interest. Temporary schemes were introduced by which the rates were subsidised by the Exchequer for certain specific items such as stock lost in bad weather or the scheme operated in 1974 to help farmers increase their breeding stock. But there could be no general waiver of rates of interest.

The Senator also mentioned the access of the co-ops to ACC loans. It is already there and co-operatives avail of loans from the ACC. He was very emphatic on the help that the ACC should give to the man rather than the farm, and to the small man in particular. This is a fact. The ACC pay greater attention to the competence, initiative and enterprise of the borrower than to his farm size. The new definition of permanent improvement purposes is further evidence of this approach. As regards helping the small man 75 per cent of the loans given by ACC are under £5,000, which in itself suggests that the greater number of people availing of the ACC services are the small farmers. ACC give unsecured loans of up to £2,000 in certain cases and they have a special terms loan scheme for members of Macra na Feirme. They can get loans of up to £3,000 at 8¾ per cent. I think that Senator Harte can be quite satisfied that the ACC are very concerned about helping the small man.

Senator Hillery praised the key role that the ACC have played in agricultural finance. He said, and I agree with him, that much more consideration should be given to the development plan for a farm before finance is made available. But in general many of the loans given by the ACC are given on the basis of a development plan submitted by the farmer or borrower to the ACC. They have a special incentive development loan scheme with special interest rates, up to 16 years to repay, and no repayments during the first year provided a development plan is submitted to them. Therefore, the ACC are working in that direction.

There was quite a lot of talk by some of the Senators, but in particular by Senator Martin, about the relationship between the farmer and the banks in the past. He did not consider it to be a satisfactory relationship. The farmer was a good farmer, but he did not know how to talk banking business and this in itself led to a lack of investment in farming in the past. That could be true but it is important, because of what has been said about the role of the ACC and the enormous increase in borrowing from the ACC, that in a similar period from 1970 the associated banks' lending increased also. It was £62 million for the agricultural sector in 1970, and in 1977 that figure went up to £241.7 million, which shows the attitude of the banks towards investment in agriculture. Perhaps they can do more and perhaps farmers can avail of more either from the banks or the ACC. But it is good to know that, as well as the ACC, the banks are there and have increased substantially the amount of loans to the agricultural sector in the last seven or eight years.

Senator Lanigan spoke about defining the people who could be, or the kind of project that could be eligible for loans from the ACC. He talked of loans to service industry such as small garages or engineering units in rural parts. I do not think that it would be the ACC's business to get involved in that kind of scheme. There is nothing in the legislation to prevent them from doing this, but I think where priorities have to be set, as in this case, we would prefer to see the capital available used for purposes directly related to agriculture. He also spoke of having the ACC involve themselves more in research. I do not think this would be necessary because An Foras Talúntais is set up for this purpose. I shall return to this later as other Senators mentioned it also.

Senator McCartin spoke of the change in procedures in regard to the composition of the board. There is no change in procedures contemplated and almost anybody with qualifications or without qualifications can be appointed. There are no qualifications required and I think we would all agree that the directors have been competent people. The record shows that in the 50 years of ACC's existence the staff and board members have been very effective and efficient in the business of agricultural finance. We do not see any necessity to change the arrangements that exist at the moment.

Senator McCartin mentioned that one can borrow only two-thirds or up to two-thirds of the value of the fixed assets. The Bill does not state that. There is no statutory limit. It is a matter between the borrower and the ACC themselves. There is nothing in the Bill that would prevent the ACC from giving a 100 per cent loan in certain circumstances.

In the discussion on forestry and investment in it I reminded the House that forestry was included in the Bill. Naturally we would all agree with the points made about encouraging farmers to borrow more for productive purposes to ensure the maximum output and the maximum development of their enterprise. This should be widely publicised, because the more investment there is in agriculture the better for the economy as a whole.

Senator Ellis mentioned credit for young farmers, and I referred earlier to the Macra na Feirme projects loan scheme which covers farmers of the age group 17 to 30. I think the ACC and Macra na Feirme are doing what Senator Ellis would like to see done.

Senator Connaughton and other Senators mentioned the problem that exists where a father will not sign over the place to his son. The son is working the land and finds it difficult as he cannot charge the land to get a loan from the ACC. Naturally we are sympathetic to such a case, but it is a matter between the father and the son to come to whatever arrangements they can. The father can still maintain priority rights in the transfer to his son and then the son would be in a position to get a loan from the ACC. The ACC would be satisfied in those circumstances with second priority.

Senator Connaughton also mentioned current account facilities. There is nothing in this legislation to prevent the ACC having current account facilities. They have a pass book system at the moment for depositors and they can start into current account facilities if they so wish. We had quite a debate on this in the Dáil and I think we are all satisfied that it is a matter for discussion between the ACC, the Minister for Finance and the Central Bank. When there is a decision on it it will be a matter for the ACC if they so wish to go ahead and get involved with current account facilities.

The Senator also made the suggestion that quite a lot of the investment and deposits in the ACC were coming from farmers. That is true, but he was suggesting that much more could be got from outside the farming community. Substantial deposits at the moment come from sources other than agricultural or farming sources. It is not valid to say that it is just the farmers who invest in the ACC. The ACC are open for deposits from any source, at home and abroad. Other similar points were made and I do not want to delay the House in going through them all in detail. Quite a lot of them were of a general nature about the importance of agriculture, and not specifically relevant to the Bill before the House.

Two Senators said that the ACC should get a banking licence from the Central Bank. There is no necessity for the ACC to have a banking licence, the exception being in the Central Bank Act, 1971, section 7 (4). Senator McDonald mentioned the question of a member of the board of ACC having to resign his or her seat on nomination for Oireachtas election. We debated this in the Dáil and the Dáil agreed that everybody is happy with the way the thing is at present. I do not think anybody would like to see a member of the board on his nomination for election being accused of using or being in a position to use his or her influence as a member of the board to secure votes. I would think that what is there at the moment is generally acceptable to all concerned.

Senator Governey talked about the borrowing limit of £350 million not being sufficient. He asked whether, if it was not sufficient in a few years time, we would have to have new legislation. Surely we would.

Senator Hyland spoke about leasing. There is a great need for a proper leasing system and it must be reasonably long-term, at least ten years and upwards. Model agreements should be available to protect the interests of the owner and the lessee. In developing a leasing system we would have to consider some legal means whereby the lessee would charge the land, possibly for permanent improvement purposes. This matter no doubt would be considered as part of the Government's plan for the reform of land structures, and I do not think that anything more can be done about it in this Bill at present.

Many Senators were talking in general of the importance of agriculture, and I would like to conclude by saying that the Government fully appreciate the importance of agriculture. The evidence of this is seen in the manifesto proposals and the recent White Paper. For this year, 1978, the total aid to agriculture excluding loans is estimated at approximately £155 million. The new Bill before the Seanad is in keeping with the Government's positive approach, providing as it does for a substantial increase in the ACC's business.

I will conclude by saying that if there are any other questions that any Senator would like to raise on any section on Committee Stage I will be only too delighted to answer them.

Question put and agreed to.
Agreed to take remaining Stages today.
Bill put through Committee, reported without amendment, received for final consideration and passed.
Business suspended at 6.40 p.m. and resumed at 7 p.m.