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Seanad Éireann debate -
Wednesday, 7 May 1980

Vol. 94 No. 2

Land Bond Bill, 1980 [ Certified Money Bill]: Second and Subsequent Stages.

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

The measure before the House is a short enabling Bill which proposes to increase by £25 million the amount of land bonds which may be created by the Minister for Finance. The present statutory limit of £80 million has been reached and authority for the creation of additional bonds is now urgently required to enable the work of land settlement to proceed.

As Senators will be aware, bonds are used by the Land Commission to pay for lands acquired and also to service the costs fund out of which vendors may be recouped the cost of the sale of lands to the commission. Bonds are created by the Minister for Finance by periodic orders—usually on an annual basis—and these orders fix the rate of interest appropriate to each particular series. The most recent order, made in January last, created bonds with an interest rate of 16½ per cent.

Successive Ministers have expressed reservations about the use of bonds as a medium of payment for lands acquired. Similar sentiments were expressed by Deputies from both sides of the House during the passage of the present Bill through the Dáil. As I said in my opening speech to that House, this is a view with which I have some sympathy since, to put it mildly, land bonds have not always held their value on the stock market. However, the land bond system—though open to question nowadays—has stood the test of time and, since its introduction in 1923, has paid for some 1.35 million acres acquired for the enlargement and improvement of undersized holdings.

It would, of course, be more universally acceptable if all acquired lands could be paid for in cash, but we have to be realistic and face up to the fact that this is just not possible in the present financial climate.

However, as I stated in the Dáil the present Bill is essentially an interim measure. The general question of land reform has been under review and proposals for certain policy changes have been formulated for consideration by the Government. In the meantime, the existing programme of land settlement which, of course, operates primarily in the interests of smaller farmers in need of extra land goes on and it is for this work that the additional bonds are needed.

Previous Land Bond Bills obtained a speedy passage through the Seanad and I would ask the House to extend the same courtesy on this occasion.

I am delighted to have been given this opportunity to speak on the Land Bond Bill. I note the reservations the Minister has about land bonds and I propose to dwell at reasonable length on the reasons why land bonds should be abolished.

I am very concerned about land bonds, Land Commission policy as we know it and the direction the Government seem to be going in. It is not in the best interests of small farmers. I am also concerned by successive statements made by various Ministers in the last five or six months. These and the present Bill would indicate that the Land Commission acquisition policy seems to be on the way out. It appears that there are a number of acres that have to be paid for. If one were to judge by the traffic in acquisition proceedings at the regional offices of the Land Commission, it would appear that we are now witnessing almost the last Land Bond Bill that will be before this House. The very simple reason is that the Land Commission will not have land. In other words, the land bank will be run down.

The Government, the Minister of State and the Minister for Agriculture are at great pains both in the Dáil and in the Seanad to say that the machinery by which land is given out to small farmers has been improved and that the tempo has been increased to get rid of land. At the same time, they are saying publicly that the Government are not designedly running down the Land Commission and that the acquisition programme is still active and still going on. As far as I am concerned that line of action and those statements are untrue. I could give a hundred examples of where the Land Commission would have been only too delighted, and it would have been within their brief to do so, in the last two or three years to take over land to relieve congestion and now they will not look at it. Any politician doing any kind of constituency work will bear out what I have to say.

We are told that we have to await the outcome of the Government's land policy and we all await that with great interest. In fact we have been waiting for it now for a couple of years. We had a change of Minister for Agriculture at the end of 1979. It might well be that the new Minister for Agriculture and his Ministers of State might not have agreed with what Deputy Gibbons had in that package. If I am to judge by so called leaks and rumblings, I hope the Ministers of today will not accept some of the items I believe to be in that package.

It could be stated that the decision by the Government to run down the Land Commission in their acquisition proceedings might be to get farmers acclimatised to the idea that from now on they need not look to a Government agency to acquire land on their behalf. By the time the new land policy becomes law, they will believe that farmers will be so acclimatised to the idea that it will go through fairly peacefully. I should like to put it on record that for as long as I represent an area of small farmers, there is no way I can accept that the running down of an acquisition programme is the right way to help them. There are certain things wrong with the Land Commission. Every farmer knows that. We know that they have been terribly slow in getting land through the machinery and getting it divided. They have got a bad name for land bonds. At the same time, the Land Commission, over the years, have been the only saviour a small farmer without money had against the hue and cry of people who were in a better position to make a living either as big farmers or as professionals or as both.

I would like the Minister to reassure the nation that, for all practical purposes, any small farmer left to his own resources will be in a position to obtain land at a reasonable price. If that is not so I would appreciate it being said today by the Minister. If the Land Commission machinery is being ground to a halt as far as acquisition is concerned the Minister should stand up and say so today so that no farmer will be under a misconception as to where he stands. There is not a day or a night in the year when constituents are not asking me to make representations to the Land Commission to get various estates acquired. The local offices are bombarded with such representations. They do their job, they report to Dublin but we never hear a word about it. This has reached serious proportions. If nothing else comes out of this debate today, at least let the farmers know where they are. We have had too much double-talk for the last eight to 12 months and it is time to clear the decks.

The Bill gives us ample evidence that the Land Commission are getting out of business. I understand that 23,500 acres were acquired in 1979. The Minister is on record as saying that a further 40,000 acres are in the pipeline. For the benefit of people who might not necessarily know what is involved, one could say that in a year when one had 63,000 acres on one's hands, the Land Commission had been very active from an acquisition point of view, but for anyone who understands the procedure it takes between 18 months and three years in some cases before the initial acquisition proceedings start and finish before a farmer gets the land bonds into his hand. What we are talking about today and what the £25 million is earmarked for are lands that have already been acquired or are in the process of being acquired.

I should like to be given the initial acquisition figures for the last six months. They would show a dramatic downturn. I should also like to bring to the notice of the House that we have now arrived at a limbo situation. It is not alone theoretically possible but absolutely possible for a non-national, an Arab or an African, to purchase land, pay double the price for it, get his deeds and start farming. Is that programme in the best interest of Irish agriculture? There is not much point in a Minister telling me that because there are so many land bonds and £25 million in the pipeline that we are progressing along that line. We are not and it is important to realise that we are in a limbo situation. On one hand we are told to wait for the new Government directive on land policy and on the other hand, we are finding out that we are paying for land which was acquired two or three years ago.

The Chair should like to remind the Senator that this should not be used as a vehicle for criticising the Land Commission. The main purpose of this Bill is to deal with the amount of money in these bonds.

I am only too delighted to be of assistance to the Chair but I cannot understand in your ruling how you could divide one from the other. We are talking about land bonds; we are talking about the Land Commission and we are talking about the stage at which the Land Commission are. I will bow to your ruling in that if there are certain matters that I brought in which are not relevant, I will not proceed with them.

The general remarks made are quite all right but we do not want a general debate on the whole land question.

Land bonds are unjust, unsocial and above all unfair. What other section of the community would sell their property to anybody for anything less than money into their hands? There would be an absolute outcry if a person residing in a town was asked or commanded to sell his private house in return for building bonds, if there was such bonds. People would not accept that. Through the years, for some unknown reason, farmers reluctantly had to take land bonds. How constitutional are land bonds? When cases that have stood the test of time are brought before the Supreme Court with devastating results, is the time now ripe for the Irish Farmers Association or any group of Irish farmers—it is something an individual could not do—to bring the standing of land bonds vis-á-vis property bought to the Supreme Court? Land bonds have caused enough hardship over the years. When money is so valuable a very good case could be brought to test whether they are constitutional or not. I look forward to the day when a group like the IFA will come forward and do that.

What about farmers who sold to the Land Commission through land bonds ten, 12 or 15 years ago? Those people actually hold land bonds worth 5 or 6 per cent at present. They are way below par when they are sold on the stock exchange. In other words, a man who would have got £20,000 for his farm ten or 12 years ago could, if he sells the bonds ten years later, suffer a loss. Many people are in possession of what I would call toy paper money. It is a sad day when this is allowed to continue.

It is well to remember too, that this is not exactly a party political problem. Successive Governments and various Ministers for Agriculture and for Lands have said that they are not in favour of them. Considering that we had several Governments since land bonds were introduced it would appear that there is some greater authority ensuring that the finance needed for land restructuring will not materialise. It would appear that over the years the Departments of Agriculture and Lands were under the thumb of the Department of Finance. The necessary money to finance a proper land restructuring policy in this country has always been the Cinderella of every single budget.

To make a comparison, if there was as much thought about the Land Commission in years gone by, from a financial point of view, as there has been about CIE then there would be some restructured agricultural arena now. The restructuring of land has always been regarded as a Cinderalla in that one came to it when every other Department was fixed up. That goes for every Government I can remember. While we have the problem in rural Ireland of fragmented holdings and so on one will never get over the problem until there is enough money to put into the restructuring process.

It has been said that the most maligned Government body of all time is the Land Commission and, in certain areas, I agree with this. Their performance on occasions has been terrible. There is a great bank of expertise there at present but I believe it will be used in the wrong way. In so far as it goes, we have no problem in allowing the extra £25 million through. Whatever else can be done, this should be converted into legal tender so that from the recipient's point of view he will not lose money. From a legal point of view I do not know how one would go about it. A man who is entitled to sell land to the Land Commission is entitled to be paid for it and when he redeems the land bonds he should get his money in full. Over the years this has not happened. It is clearly a business principle that the man who is selling should have the same rights as the person or the commission or authority who is buying.

Elderly farmers traditionally have been the people who have been selling their land because they were coming to retirement age and so on. Like those on social welfare they are the only lobby that have not a punch or kick in this day and age. I have no doubt that if land was taken off the new aspirants into farming over the years and paid for in land bonds, if they were subjected to this sort of abuse, land bonds would have been finished. There was not enough of a kick in the people who were getting out of farming. They were old and were not organised. The first group to bring it to the Supreme Court will, by and large, be successful.

The Minister, through the Department, should give some kind of undertaking that land bonds that are presently being issued will not lose their value, There should be a Government subsidy or guarantee to ensure that since we cannot scrap land bonds altogether they will be as valuable to their owners as money would be in a normal deal.

It has come to my notice on a number of occasions that people whose land was purchased by the Land Commission, because of title difficulties, had neither the land nor the value of the land bonds. I will give an example of a man who sold his place for £18,000 two and a half years ago. He was credited with the land bonds in due course. He was an old age pensioner and because he had to his credit somewhere in Dublin, in the Central Bank, or in the Land Commission, £18,000 worth of land bonds, the Department of Social Welfare saw fit not to give him a pension. On the other hand, because there was a problem with the title of his place which took the legal people a long time to solve he could not get credit or the interest on the land bonds. Were it not for the Western Health Board who stepped in for five or six months to pay him a few pounds a week subsistence allowance, this man would have been in dire straits. He had the galling experience on top of that of watching the local Land Commission office come down last year to set his land for 11 months, and he could neither get a pension nor credit from his land bonds. I understand that that is not an isolated incident. One could argue that a man should not sell to the Land Commission until his title is in order but what can one do in the case of a man of that age? If it is suitable for the Land Commission to acquire the land one would assume that their legal department would fix that up fairly quickly.

We welcome the Bill. Land has to be paid for but I make a very strong appeal that the value of those land bonds be held at the value of the day, irrespective of what happens in the stock market, and that this will be the last issue of land bonds, in other words that the next time we are dealing with this matter here there will be a proposal to pay farmers in money, which they are entitled to have.

I should like to join with other Senators in welcoming the Bill. The increase by £25 million is conservative in view of the present day price of land. I would not go along with the gloomy predictions of the previous speaker and criticise land bonds and their value. If we all played that record we could perpetrate serious injustice. We should forget about the difficult history of land bonds because one can go into the difficult history of any other Government Department. If we look at them on merit today, land bonds might have as high a value as the pound note or the dollar or the guilder or any of the other currencies floating about. I would be very slow to criticise the land bond. A properly organised land bond should retain its value and its interest and should be a solid investment. We have very little knowledge of the future and perhaps it is reasonable to expect criticism and gloomy predictions from one who is in Opposition.

I should like to tell the Minister and the Land Commission that there is a major role for the Land Commission to play in Ireland, especially in the west and the part of Ireland that I come from. I should like to encourage them to investigate further the many holdings that they should be considering taking over and the many people who have kept themselves aloof from their land being taken over.

This is a very big bread and butter basic area. The State is involved and so is the livelihood of our people. The people who depend on the land for a living are at stake. I would like to encourage the proper financing of the Land Commission, to see it supported 100 per cent by the Oireachtas. A serious injustice has been done to many of our people who have not enough land to eke out a living, and while we have that situation we should be actively pursuing and encouraging every conceivable support that we can muster for the Land Commission. They have not always done as good a job as they could have done. I have seen many failures in the Land Commission and I would say that one has been their shortage of finance and accordingly they had to cut their cloth like other Departments. That would largely be the criticism that we could make—that they were always short of finance. I hope the Minister will see that they still have a very big role to play in Ireland, especially in the west where we have people coming in who can invest money and acquire land at the expense of the landless people. That land is outside the reach of those who have worked on the land for generations. It is unnecessary to stress the importance of this aspect of the job the Land Commission have to do. I sincerely hope that the previous speaker and his predictions are wrong, that this will not be the last such Bill. New ways of financing and supporting the Land Commission in the ever-increasing importance of the role they have to play will have to be found.

This Bill is a step forward. There is a long way to go before we will have solved all of the difficulties attached to the allocation and the ownership of land.

This is a short Bill, but I was nevertheless surprised at the brevity of the Minister's speech introducing it. The purpose of the Bill is straightforward enough. It would increase by £25 million the land bonds which can be created by the Minister for Finance to pay for lands acquired by the Land Commission. The fact that we are being invited to consider increasing the amount that can be turned into land bonds calls in question the effectiveness of the system of purchase by land bonds and indeed the procedure of land restructuring under the Land Commission. This is an extremely important area, an extremely important issue. It is possibly one of the most important areas for economic and social reform in this country and one closest to the heart of every Irish person. Even every city person would consider that the whole question of the use of our land is of vital importance to us as a nation.

There are criticisms from two sides that can be made of the present system, and they should be made in the context of seeking to enlarge the fund from which to create land bonds. The first criticism has been mentioned by Senators. It is that the value of the land bonds is very often, I think at the moment inevitably, less than the value would be if cash was paid at the time—if money was paid rather than land bonds issued. That means that the person is getting less than the value stated to that person for the land being acquired compulsorily. Even if notionally the person may be able to redeem for full value in the future, effectively the person is not getting the full value, and this naturally causes a lot of resentment and criticism. That is one side of the picture.

There is also, I believe, another problem on the other side. It is one which should cause at least as much, if not in a sense more, concern and it is that the scheme is not working as well as it should be for the benefit of smallholders. The Minister in his very brief speech referred to the fact that the existing programme of land settlement operates primarily in the interests of smaller farmers and as the need for extra land goes on it is for this work that the additional funds are needed. I question very much whether the very high rent which farmers have to pay in circumstances where they take land which has been compulsorily acquired would allow smallholders to rent land from the Land Commission. I have heard of rents of as much as £300 or £400 a year for such land and that is the kind of money which a smallholder cannot find and cannot commit himself to. This is a very worrying deterrent to the genuine smallholder who needs the additional land in order to carry out reform and land development and land restructuring. He is prevented by the cost of the land from being able to avail of what would otherwise be a very desirable social policy.

We have, then, a system which appears to be unsatisfactory in its operation from two sides. In a way, the danger of this is that you have what might be described as a double deterrent because the person who owns the land which the Land Commission are seeking to acquire, if he believes that injustice is being done to him, if he has an aversion, as a lot of people in those circumstances have to being paid in land bonds, will fight tooth and nail, to the last forum which he can go on the fixing of the price. Ultimately his appeal from the lay commissioners goes to the judicial commissioner and then it has to come back for the fixing of the price. Years can pass while this procedure is in operation and quite often I believe it is because the person is not so much opposing the acquisition of the land as opposing payment in land bonds.

Reference was made to the possibility of constitutional action. As I am sure the Minister is aware, a case was heard before the High Court last February challenging the constitutionality both of the procedures of the Land Commission and the payment by land bonds and I understand that judgment in the High Court will be given on this in the very near future. Following that presumably, inevitably there will be an appeal to the Supreme Court. The system of payment by land bonds has been sufficiently unattractive to one particular person affected by it for that person to institute proceedings. Other proceedings have issued as well.

Also there is a deterrent to the very people we should be most concerned about, the smallholders, who need help in restructuring and developing their land, who are very badly affected by some policies at the European Community level, particularly in relation to dairy farming, and are not helped to any considerable extent by other policies at the European Community level such as the farm modernisation scheme or other schemes which are pitched at a higher level that will not be of help to the smallholder. So we should be ensuring in our approach to land restructuring to develop the full potential of our land, fair access to the resources of the land. We should be striving for a very well defined and structured land policy to ensure that the people whom we want to see able to acquire land will be in a position not just to have it made notionally available to them if they could pay a very high rent but positively to encourage them by providing interest free money so that they can acquire land and develop their existing holdings—people who have a healthy potential for the full use of the land to make a reasonable living for themselves and their families.

The Minister referred very briefly and obliquely to the general question of land reform which, he said, has been under review, and that proposals for certain policy changes have been formulated for consideration by the Government. This is a matter of critical urgency. If the decision in the High Court is to be to the effect that the particular procedures of the Land Commission in acquiring land compulsorily on the payment of land bonds is unconstitutional, then we will have another example of the courts making it necessary for the Oireachtas subsequently to come forward with proposals for reform.

Recently, we have had a number of examples of this, most notably in the married couple's taxation case. When are we to get the situation where it is the Oireachtas, and the Government of the day, that will give the lead in the kind of reform that is necessary? The kind of reform we should be concerned about is one that ties in with the policies of the European Community level and that not only complements those policies but also redresses the imbalance in those policies. We should be thinking of a radical approach to land reform and to structural reform and land use which would place the emphasis on ensuring that the smallholder will have the reality of increasing his holding, of developing it and of being encouraged and assisted in doing this.

What we are seeing in relation to land at the moment is not a very healthy development. We should be deeply concerned about all the effects of land restructure in Ireland, not just the Land Commission and their procedures—they are only part of the whole approach—but the very high cost of land itself and the whole area of the uncontrolled price and speculative capitalists' profits on building land. The conversion of agricultural land into building land is another issue of direct and immediate concern, even as near as County Dublin, if one is to judge by the recent proposal in Dublin County Council to convert a large area of agricultural land into building land, and to do so for the profit of a member of the county council.

The kind of approach to land reform and to the kind of structures which would release land to those who need it, who live in the area, who have a right to a fair standard of living in that area for themselves and their families, will not come about if it is surrounded by deterrents at both ends, as I have explained. If there is the deterrent to the person whose land has been acquired that the land will be paid for in land bonds of less value than the value nominally placed on the land for the purposes of acquisition, and if the land will not be made available to the smallholder, the person who ought to be put on priority as far as getting the land is concerned, because of the high rent involved and because of the high cost of money, the smallholder seeking to enlarge and develop what is still in fact a small holding, cannot find that money, cannot find that rent.

I was surprised by the brevity and lack of substance in the Minister's speech. Perhaps in his reply he might be prepared to give some indication of the Government's approach to land reform, what kind of approach they are thinking of adopting. He need not reveal any secrets to us of the small print of any draft Bill which the Government may be contemplating. This is an area where it is important for us to know that the Government appreciate the urgency of land reform and land restructuring so that we can monitor very closely what is happening. Some of us have been aggrieved by the policies coming to us from the European Community level which undoubtedly help best those who are already developed or, in our terms, fairly modern in their approach to farming, keeping accounts and so on. We need to be extremely clear about where the priority should lie in relation to our approach to land itself, to land use and to land structure.

The Minister could have used the opportunity of this Bill to give us some indication of Government thinking on the matter and some idea of the time scale. Is there to be a measure introducing substantial land reform during 1980? Perhaps the Minister could indicate that in his reply. This is a measure which has one specific aim in mind. It is a very temporary measure and I would agree that it is on the cards the courts may declare it to be unconstitutional. In any case, the whole approach has outlived its usefulness. I do not believe the Bill is radical enough to achieve the kind of purposes that I have been talking about—genuine land reform and restructuring needed in order to develop the full potential of land and in order that those who have most right and most entitlement to land can acquire it and develop it for themselves and their families.

This is a short Bill and I do not understand the expressions of panic and doom from the other side in relation to the Land Commission. The fact that another £25 million is required to carry on the acquisition of land by the Land Commission is an indication that land is being acquired by the Land Commission. Listening to Senator Connaughton one would think that the doors are being closed and that the Land Commission have gone on a permanent holiday. I understand that they are still working in Davitt House and in every other Land Commission office throughout the country. It might be well for him to remember that the land bond system was introduced by a Cumann na nGaedheal Government in 1923. Many successive Governments had the option of changing the system.

I am not happy with the land bond system. We should have an optional system of payment for land, but the abandoning of land bonds at this time would not serve any useful purpose. A person selling land to the Land Commission should have the option of receiving either cash or bonds. Most people selling land to the Land Commission are people who are getting out of land and if they get money instead of bonds from the Land Commission their first chore will be reinvestment of that capital. Where will they get 16½ per cent immediately in any other agency in which they could invest their money right away? They are the reasons I would welcome the retention of the land bond system with an option to sell for cash if the person selling to the Land Commission required the cash for any other purpose. Most of the people getting out of land will not be repurchasing land: they are people in the higher age group who will not be pursuing an agricultural future. That type of person would welcome some type of system where his money would be assured and guaranteed.

The cost mentioned by Senator Robinson of land to small farmers is governed by the amount of money paid in the initial instance by the Land Commission, plus the rearrangements of allotments, plus the fencing of that holding. It all goes on to the rent and it is valued in an open market. That is the reason for the high cost. It is costly for people getting land today and indeed some people in receipt of social welfare may be considering whether they should avail of such land because of the high cost. However, any productive farmer, regardless of the cost, welcomes any addition to his holding to make it viable because if he is on the 11-month grazing system it is costing a very sizeable amount of money. No matter what it costs, if it becomes his own I think that it is more profitable to the farmer finally.

I am sure there is a Bill in the pipeline—we do not know anything about it yet and the Minister may not know anything about it either at this stage—and I would welcome a restructuring of the whole system. The delay between the Land Commission acquiring land and its distribution is something that we feel very strongly about. Land, immediately it is taken over by the Land Commission, tends to deteriorate and by the time the farmer gets hold of it it takes him years to get it back to any measure of fertility. I would welcome the shortest possible period the land bank would be held by the Land Commission. Its distribution should come as quickly as possible because of the vast deterioration. We had a policy in the past whereby land was in the possession of the Land Commission up to 30 years in places. I know of cases where it was held for 27 years and 28 years. I think that is disgraceful. That system should be abolished.

I welcome this short Bill to enable the Minister to increase by £25 million the amount available for land bonds to carry on the work of acquisition and disrtibution of land to the small farmer community.

I regret that the Government have found it necessary to introduce this Bill, not because I am opposed to the Land Commission but because I think that before the Land Commission can become really popular or acceptable or appreciated they will have to compete for land and buy land in the market place and for cash. Memories, especially in rural Ireland, are long and if you go back to 1923, as the previous speaker said, the 4 per cent land bond and, indeed, the five and the six per cent bonds by which property was acquired compulsorily were a grave injustice. We have been looking forward to a new style effort by the Land Commission and I think land bonds are outdated. It must be disappointing for the many excellent Land Commission officers—I can only speak for those who work throughout the country, the inspectors in charge and the inspectors—whose work has been frustrated over the past few years because they find that they are not able to make the progress that clearly it was intended the Land Commission should make.

One of the previous speakers mentioned the rent. In the last two or three years rent has gone as high as £140 an acre. I would ask the Minister to consider seriously looking at high rent to see if it could be subsidised in some way because it is uneconomic and it is not possible to make a profit from such land at the present time.

The failure of the Land Commission to update their policies and practices so that they could operate effectively in the interest of the ideals for which they were established is regrettable. There is a tremendous amount of work to be done. Over the past 100 years successive generations of farmers have enjoyed the guarantees and the privileges of the three Fs—free sale, fixity of tenure and fair rent. If one looks at the situation closely one finds that only in the Land Acts have there been transgressions against those great principles that brought so much peace and harmony to our country.

The idea of compulsory acquisition of property, especially for land bonds—I am glad the land bonds have gone up to 16½ per cent, but one can get that from any of the ordinary commerical banking institutions at the present time—is unfair. If the Minister is bringing in another Bill—I hope this is a short-term measure—I hope he will try in some way to index the interest rate or the value over even a 15 or 20 years period, because the people who are paying the rents on the land, £140 an acre and over a 30-year period, certainly are contributing more than 16 per cent profit to the Land Commission. I know the Land Commission are not in the profit business, but the people who are purchasing out their holdings or the additions to their holdings are paying much more to the Land Commission than the Land Commission are paying to the people from whom they compulsorily acquired the holdings.

If the Land Commission were to embark on a policy of giving people the option to be paid or compensated for their property by cash or by bonds then land would become available for the purposes of the Land Commission much more readily and very much quicker. It would ease the problem of redistribution in many parts of the country. I hope that it is not this small Bill that is responsible for the very few holdings that have been taken into the Land Commission system over the last year and a half. The number of acres on stream has fallen considerably. The number of notices under section 40 that have been served in my own constituency in the past year and a half have been very few—you could count them on the fingers of one hand. If the inactivity of the acquisition section of the Land Commission has been encouraged by this two-section Bill, then it is highly regrettable.

I would just like to re-echo the point that I am very much against the entire concept of bonds. I think that people who have property, whether they be rural or urban people, are entitled to be paid hard cash for that and as well as that I think the payments could be made a little more promptly. The case which was mentioned by Senator Connaughton is certainly not an isolated case by any manner or means and since so many of the people who find themselves involved with the acquisition branch of the Land Commission are elderly farmers, senior citizens who have served the country well over the years, I think in fairness to them that they should be spared as much worry as possible. One way of doing that is to facilitate the business transaction, to have the legal transfer completed as expeditiously as possible and it should be possible to do that in a matter of weeks or months and not have it dragging on for two or three years leaving people literally without any income whatsoever.

I wish the Minister success in his role. I know he has been thinking about the land reform problem but I am disappointed that is was not a more comprehensive Bill he introduced rather than this very short stop-gap operation.

I do not intend to delay the House very long on this matter, but I would like to bring to the Minister's notice the fact that the manner in which lands are acquired has been the cause of certain problems for people, would-be allottees and people who have had their land taken over by the Land Commission in circumstances where bonds have been presented to them in payment. The payment over a considerable length of time has not been anything near the face value at which the particular bond was priced on allocation. In the early days of land acquisition you were dealing with a landlord's broad acres from which several reasonable-sized farms could be acquired and provided for farmers who were either losing employment in consequence of the land being divided and having the first claim on it, or people who were small, uneconomic landholders in the adjoining areas. Now those days are gone. I think the Minister will agree that in his county and in mv county, and in Connacht and Munster as well, the pattern of land acquisition is on the basis of two, three or four smallholdings becoming available either in consequence of the families having passed on or the retirement proposals that were initiated when we joined the EEC whereby old people took money and pensions and the facilities to reside in their home and handed their land over to the Land Commission.

That in itself had the intention of making land more speedily available to young farmers and to young people. But in recent years, except for what was acquired in that manner, many of the holdings acquired by the Land Commission have been left dormant, so to speak. They are in the ownership of the Land Commission, not being allocated to anybody, being set on the 11-months system and the land is becoming more and more impoverished year after year. I agree entirely with what Senator O'Toole has said, that if you have a long number of years of grass being let, so to speak, on holdings such as a rather wide ranging farm when a number of people have small areas of it, or where it is not in small areas but where the feeding is very poor for livestock, it is understandable that this land becomes impoverished and run down.

I welcome the level of interest provided in the bond being sought at the moment. These terms are reasonable in view of what the Land Commission would be considering as the setting value of the land. Nevertheless, if you go into any of the investment banks you will get 16½ per cent freely without any problem. As far as the Land Commission are concerned, when they hold this land for six or seven years it means that the money paid out by the Exchequer on this at 16½ per cent for seven years is greater than the principal. In other words, this long delay in the division of land is a policy that is not expected to—nor has it been known to—have great benefits for either the people who give up the land or the people who expect to live on it and rear young families in the years to come.

I welcome the Bill but I would like to say that if the Minister could speed up the division of the land it would be far more beneficial to the people who would be allotted holdings. I fail to see how it is that the Land Commission can provide a scheme in ten years' time to divide a farm and in ten months' time—and ten months might be as much as they might take to do any one farm—that they could not do the same thing. It is very difficult to understand how in the early days when huge ranches were taken over from landlords that the Land Commission were able to prepare a scheme in less than two years. Now, as I said, the areas are small; there may be complications and implications arising from the structure of the holdings and their locations at the present time that make this rate of progress not as readily possible as would be desirable. Nevertheless, it is a situation where I think the Minister, a farmer from the west, having first hand knowledge of these problems, might be able to speed up the division of land. I welcome the Bill and I wish him good luck with it.

I am in sympathy with the intentions of the Bill while I am equally in sympathy with what Senator Kilbride has just said and with his impatience about the difficulties surrounding the resettlement of land. I think it is patently obvious to anybody who knows anything about rural Ireland that these problems are very difficult to solve in a humane way. When it came to the division of large ranches, those which had been vacated by largely absentee landlords, I think one could deal with problems of agrarian reform in a much more expeditious way than one can deal with the problems that now arise from smallholdings in congested areas where a great number of conflicting interests are at work—the desire sometimes of an older generation to hold on to the land, the impatience of a younger generation, perhaps in a farm next door, to acquire the land and the balance of sympathy between the desire to reform on the one hand and on the other hand the desire not to ride rough-shod over the emotional claims of people to holdings of that kind in that area. The issue of bonds is by no means a perfect instrument in this connection, but it has one advantage in that it is piecemeal and patient, traditional, and that it has served between one reform stage and another reform stage to keep the process of land resettlement on the road. It is in that modest sense that I welcome the measure and I think nobody is strenuously opposed to it.

It struck me during the debate on the entry into the EEC that a certain crude impatience was sometimes expressed particularly from Europe itself and Brussels itself and it became embodied in the phrase "transitional farmers". As somebody who grew up in Leitrim, among farmers who were transitional and less than transitional in many-phases, it struck me that the phrase "transitional farmer" had about the same delicacy as the phrase "terminal cancer". When we talk about the resettlement of land, the taking over of land for redistribution, I think we should have concern with the feelings of people who have lived there from generation to generation and whose allegiance is to their profession as farmers and these feelings should be respected, and while the instrument envisaged here is not a very powerful or radical instrument, it has its own purpose and its own function while we wait for a more radical and a more far-reaching reform in the whole question of land settlement.

I think it is reasonably true that this business of acquiring and distributing land, since the foundation of this State, was operated on a basis of carrot and stick. The stick was and is still being held out to prevent a landowner exercising his freedom of action with regard to the disposal of his land once the Land Commission put their eyes on his property. The carrot was traditionally in the form that bonds which could have been, in the twenties, thirties and forties, regarded as a form of payment by a secure method in the sense that offering to landowners a form of security for their old days, would have been an attractive proposition for the acquisition of their land.

We must look at this carrot and stick method first in its historical context and then in the circumstances of today. The first Land Bond Act was in 1923 in vastly different times from those of the present generation. It operated in a system whereby landed gentry had an excessive amount of land which the State thought should be acquired from them and should be distributed to small farmholders who had a farm on hand or some property of their own. The fact that landed gentry were being relieved of a certain amount if not all of their land, was something which did not attract a great amount of sympathy for them at that time. The present system is a vastly different one, because we have now very complex and local characteristics in operation whereby a farmer who by no means can be regarded as having an excessive amount of land, may have his property sought by the Land Commission tor acquisition and allocation. That, to me, would be the first reason why we should seek a fairer and more equitable system of compensation in such a situation.

The stick part of the whole basis on which the Land Commission have operated has not changed. The farmer is no longer, as he was then, once the Land Commission put their eye on his property, able to dispose of it in a free manner. People can argue the pros and cons of that. I think it is always necessary to have some form of compulsion if people are to let their land go for socially desirable purposes.

It is in regard to the compensation aspect that we must take a closer look. If circumstances have changed radically since the first Act of 1923, we must also look at the radical change in the form of compensation to the landowners. I believe that the Land Commission have operated rather well on this very confined basis and on the terms of reference which have been given to them by successive Governments. They also had to operate in a rough and ready manner, not having any set or preconceived plan of operation for the different localities in the country as regards what land should be acquired at a future date, as regards whether there were progressive small farmers in that locality who might prefer to buy the land when it would come on the market and could be depended upon to utilise that land to its optimum capacity. Under the present system of acquisition by the commission the very progressive small farmer can be penalised; he is not free to acquire on the open market land which he is very capable and very desirous of developing as an extension of his own holding.

I wonder whether the system which we operate in this country is operated in any other country. Could the Minister give us some indication as to whether other countries operate in regard to this matter of land acquisition and distribution on the same basis as we do? I am firmly convinced that in our present circumstances, the way the Land Commission operate in acquiring land is not the best way to encourage people to give up land. After all, we have had even the EEC operating a very attractive pensioning scheme in regard to old farmers. Elderly folk with property could get out of farming altogether and in return receive an attractive pension which they had earned over the years. It is all very well offering, what is merely a paper figure, but I think people, if given the choice—I think somebody on the opposite side did say there should be an alternative to bonds, namely, a cash option—of taking bonds or cash at the present time would go for the cash.

There is no doubt that there is a feeling that the rent charged to farmers who have been allocated land by the Land Commission is regarded generally by these people as rather high. A common statement that one comes up against is that land from the Land Commission is no longer cheap land. Nobody expects land in the present situation to be cheap, but if small farmers feel that the rent that they will be asked to pay will inhibit them or will be a deterrent to expand their farms, then the Land Commission should look at this question of the rent that is being required of small farmers when they are given land.

I would ask the Minister to indicate to us whether the money that is now being given, the extra £25 million under this Bill, will be devoted to acquiring future properties for distribution, or whether it will be used to pay off on properties which have been acquired in the past. I would also ask him if he could give some indication as to the level of voluntary offers of land by landowners. Do we have, to any great extent people coming along to the Land Commission and saying: "Here is my property; I will give it to the Land Commission if they are prepared to take it"? That could be a guide as to whether this whole system as it operates at present is moulded in the right way to make our system of acquisition and distribution of land the most attractive one that we can have.

There is also a suspicion that the level of activity by the Land Commission in the distribution of the properties they hold is not as brisk as it was in the past. We find in response to representations that we make to the present Minister that lands are being held more or less in a state of limbo for a considerable period. It is unfortunate that in that lengthy state of limbo the land itself is more inclined to deteriorate in its intrinsic quality rather than appreciate.

I have nothing further to say except that we should no longer look at the operation of this system in the context in which it has operated since 1923. The circumstances were radically different then and we should seriously consider overhauling the entire basis of the carrot and stick I mentioned earlier on which this socially desirable business of land acquisition and distribution operates.

Coming as I do from a western county where the acquisition and distribution of land over the past 50 years has been a feature of farming, I welcome the opportunity of saying a few words on this Bill. The purpose of the Bill, as the Minister has told us, is to increase the amount of bonds that can be created by the Land Commission by £25 million. Elsewhere, he has indicated that he hopes this will be adequate to deal with the situation which the Land Commission has to cope with over the next two years.

I recall that on the last occasion in this House when we debated the creation of land bonds, which I think was the end of June 1978, it was indicated that the Government had looked at the question of land policy and that they were not committed to the continuance of the land policy that had prevailed up to then. The decision had been made in principle to have a land development authority. They accepted the necessity for the restructuring of land and definite proposals would be before the Government by the end of that year. The £20 million extra bonds we were creating on that occasion were simply a stop-gap measure to tide us over the situation until the new land development authority came into effect. Now, two years later, apparently there is very little progress with regard to the creation of the land development authority.

However, to deal with the present Bill and its proposal to get an extra £25 million worth of land bonds, I would like to quantify, to measure as I see it, the effect that £25 million is likely to have on the whole question of land restructuring. We are talking about viable acres. A reasonable valuation on them at the present time is £2,500 each. The amount of bonds we are creating in this Bill would be sufficient to acquire about 10,000 acres. When we are talking about a viable farm we are talking about 100 adjusted acres. We are, in effect, saying, therefore, that we can measure the effect of this Bill as having the capacity to create about 100 viable farm units.

This represents a very small dent on a vast problem, the question of land restructuring. There are statistics to show that there are about 41,000 farms or holdings between five and 15 acres and a further 57,000 holdings between 15 and 30 acres. Therefore we are talking almost of 100,000 holdings which are, by any standards of normal farming activity, uneconomic holdings and which require, if people are to obtain a satisfactory livelihood from them, adjustment upwards in their size. There are a further 56,000 holdings between 30 and 50 acres. Some of these are uneconomic and there is a necessity to provide additional acreage for these holdings if they are to provide a satisfactory livelihood to a family solely dependent on them for their livelihood.

I want to suggest that this Bill does not go any satisfactory distance along the road to providing solutions to that problem. On the last occasion when we discussed the creation of land bonds there was general acceptance that the Land Commission was not suited in its present structure to meet the challenge of the years before us. There was one significant difference between the conditions that prevailed then and those that prevail today. Two years ago, the economic climate in agriculture was positive and progressive. It was such as would encourage a man on limited acreage to purchase, and indeed to borrow to purchase, additional acres to provide him with a better living. The situation has changed today for the type of people who are farming on the size of farms that I have mentioned. I doubt if the circumstances that prevail in agriculture today would be sufficient to encourage them to depend on their own resources entirely to acquire additional land for their holdings. Therefore, the necessity of a State agency, be it the Land Commission or the proposed land development authority, to fill the vacuum in this situation. It is only through a State agency that additional land can be provided for the holdings that require it.

I regard the £25 million extra land bonds that we are creating as having only the capacity to create an extra 100 viable farm units. We are talking in terms of 100,000 holdings that are uneconomic unless more land is provided for them. In fact then we are talking of servicing just one person out of every 1,000 worthy applicants.

Land restructuring had a social aspect also. There is the need to arrest rural decline. There is the need to deal with a situation, something that is rapidly taking place over the years in farming, and that is where the economic number of acres tends to rise steadily as time goes on. More and more farms which a few years ago could be regarded as being of an economic size are now decidedly gone into the uneconomic bracket. There is also a need to assist the progressive farmer on limited acreage. Persons who have shown that they have the capacity, the motivation and the management ability to make a satisfactory job of the holdings that they have should be provided with additional acreage to assist them in the very worthwhile job they are doing.

Many Senators referred to the unacceptability of land bonds and I share totally the views that have been expressed. Land bonds do not appeal to prospective sellers of land and they are no encouragement to land owners to dispose of their holdings for the purpose of distribution in the areas concerned. No single issue of land bonds has retained its value. The Minister stated that in January 1980 the last issue of land bonds was created at an interest rate of 16.5 per cent. An interest rate of 16.5 per cent in May 1980, five months later, will not prove universally attractive to people whose land would be useful and necessary to assist a land restructuring programme in any area. The only way that the Land Commission can get land satisfactorily and readily is by paying cash for it. Perhaps there are difficulties there. When we realise the grave necessity that there is to deal urgently with the question of land restructuring, then we have to face squarely the issue that cash, and cash alone, is the method by which land owners can be best induced to dispose of land which is needed for distribution. I pay tribute to the work of the Land Commission over the years. Perhaps we have from time to time criticised them, but in general they have done a satisfactory job. Since 1923 they have acquired and distributed something like 1,350,000 acres and that is an indication of the contribution they have made to the land restructuring problem of the country. However, I am disappointed at the lack of urgency with which land that they have acquired is distributed. Other Senators have referred to this. There is a decided slowness to dispose of land with the inevitable result that the property in question usually deteriorates in value, particularly in the case ot a dwellinghouse and farm buildings on land acquired by the Land Commission. I hope the Land Commission will be influenced by the criticisms that have been made on that aspect and will ensure, in as far as they can, that the distribution of land and the re-allocation of dwellinghouses and farmyards on land acquired will be dealt with in a more expeditious fashion.

I hope the Minister when replying to the debate will give us a firm indication of the future land policy of the Government. I hope that that policy will recognise that the land of Ireland is our greatest natural resource, that it is far too valuable an asset to be mismanaged, as some of it has been over the years and that steps will be taken to ensure that its management and control will come into the hands of people who have the interest, motivation and ability to manage it properly and productively.

One thing that has always concerned me is what I describe as the dormant acres, the substantial area of land in this country that is under-utilised and badly farmed. There is no sight more depressing when driving through rural Ireland than a landscape that is neglected and under-utilised, particularly when it may well surround the productive acres of progressive small farmer. There are a number of reasons why we have this unproductive land. It may be due in part to the subject we are talking about, land structure. More of it probably is due to absentee ownership and perhaps more still to a lack of interest on the part of the people who own it. It is a delicate subject but land is far too valuable an asset to be allowed to remain in an unproductive and neglected condition.

One other aspect of land management or land restructuring that was discussed frequently a few years ago and then apparently pushed into the background is the question of long-term leasing. The long-term leasing of land, perhaps even by a State agency, has merit. If it is not possible for the Land Commission or a State agency to provide the additional acreage that a progressive farmer requires, and if it is not possible for him from his own resources to purchase that additional land, then the value of long-term leasing for that man is the only option remaining. Therefore, I hope that the question of long-term leasing will not be pushed into the background. It is a viable option and it should be pursued.

I conclude by saying that, limited though its scope is, I welcome the Bill to the extent that it will help some limited number of farmers to acquire additional land. I look forward in the near future to seeing a positive land policy and perhaps a State agency committed to a more dynamic and progressive approach to the restructuring of land in Ireland.

First of all, I want to say how grateful I am to the Senators for their contributions to this Bill. It is a short Bill, as I said at the outset, but it raises many questions. I can well understand the anxiety of Members when it comes to discussing any aspect of land policy in this or the other House.

I am satisfied that the £25 million which I am looking for here under this Bill is sufficient to carry on the work of the Land Commission for the next two years. If there is a further need for additional money there is nothing to stop us from coming back here to look for more money, but for the present the £25 million is enough to cover us for at least two years.

Much has been said about the delay by the Land Commission in dividing the many estates which they have on hand, some of them being held for a long period of years. We all know of the occasional case where lands are held for periods of from two to ten or 15 years. Very often in these cases it is not the Land Commission's fault. We generally find, when we investigate the reasons for those long delays, that there may be something wrong with the title, or there may be a long legal wrangle with the owner before the Land Commission finally get possession. In all cases it is absolutely essential that the Land Commission dispose of those lands as fast as possible in order to help the small farmers, for which purpose those lands were acquired in the first instance. For that reason the Government, last October, directed that the resources of the Land Commission should be directed towards the speedy re-allocation of all those lands which they had on hands over a long period of years. Last year schemes amounting to about 30,000 acres were prepared by the Land Commission and re-allocated. This is the type of activity that I would like to see going on. It is not true that the activities of the Land Commission are being curtailed. This allegation has been made both by Opposition Senators to-day and by Opposition Deputies in the Dáil. The Government have directed that the Land Commission apply their resources to the re-allocation of land. At the same time they are continuing to serve section 40 notices, maybe not as fast as they used to, but Senators will appreciate that it is not possible for them to pursue the acquisition of lands as actively as they had been doing over the years when the emphasis was not on the re-allocation. It is to be hoped that at the end of the two-year period we will have a new land policy in operation. It is up to the Government when they are introducing this legislation to decide how the new authority are to be financed.

There has been a lot of opposition to land bonds. We find the same opposition to every land bond Bill that is introduced. Still, successive Governments have continued to maintain this system. Even though the system might seem distasteful to many people, it has enabled the Land Commission to acquire 1.35 million acres of land since it was started in 1923. The Land Commission could not have undertaken that massive acquisition and resettlement programme were it not for this system of land bonds which has been in operation.

We must remember that the Land Commission were set up 100 years ago to do a certain job and that circumstances have changed since then. It is only right and proper that a fresh look would be taken of the Land Commission to make it more suitable for present-day requirements.

Senator Connaughton spoke about a need for a better bond. He should bear in mind that when each series is created it must be at such a rate that it will keep its par value for a reasonable period after creation. We cannot, of course, guarantee indefinite par value. The interest rate and the ultimate redemption of bonds at par are guaranteed by the State, but the guarantee does not extend to day-to-day market price fluctuations. This is something we should remember when we speak about those bonds and criticise them.

Senator Connaughton also mentioned Arabs being able to buy up lands in this country. An Arab or any non-national buying up land would have to get consent under section 45 of the Land Act, 1965 from the Land Commission. That consent will not easily be given if the lands are suitable for an ordinary working Irish farmer. Of course, citizens of the EEC are in a different category.

As regards the £18,000 case which he quoted, I cannot, of course, comment on the social welfare aspect, but the legal position is that when the Land Commission acquire compulsorily any land, they can move in and take possession and put the bonds to credit. It is then for the owner to prove his title to the bonds. This is important, because the law is that all charges and burdens attaching to land before acquisition attach to the land bonds after acquisition.

Senator Robinson and Senator McDonald mentioned the high charges on land allocations. There is no cheap land any more no matter how one acquires it. In general the Land Commission must try to recover what they pay for land. Certainly high interest rate land bonds men higher rate of annuities on allotments. In the final analysis it is for the Commissioners to fix these prices. We must remember the halving of the annuities in the west of Ireland.

When Senators talk about rents, it is necessary to be clear that one can be speaking about two separate things, (1) the rent that the Land Commission will charge for the letting of the lands while those lands remain undivided and (2) the final charge, the annuity that the allottee has to pay when the lands are allotted. In the case of (1) the rent will be determined to some degree by local rents and, in any event, the Land Commission must charge a sufficiently high rent to cover outgoings on the lands such as servicing those lands, bonds, rates, caretakers and so on. In the case of (2) we are not really talking about rent, we are talking about a terminable purchase annuity, about 26 years or 16.75 per cent annuity. The annuities can be high because a 16.5 per cent bond means a 16.75 per cent annuity. A policy of giving dear land out for cheap annuities would involve massive State subsidisation and we could not undertake this at this time.

Senator Robinson asked about the Government's general approach to the land policy. I cannot, of course, give great detail, but the prime considerations would be encouraging rational land use, channelling land into the hands of really deserving and committed small and medium farmers. Revision of the EEC directives on farm retirements and modernisation will also be a help. A revamped retirement scheme should help to unlock much land tied up in the hands of elderly farmers at present.

Senator Howard mentioned the delay by the Government in bringing in a new land policy. It is important to bear in mind that the Land Commission have now been in existence for 100 years. This is perhaps the most fundamental review of the policy and procedures of land reform that has ever been undertaken. It will determine the shape of land structure programmes for many years ahead. For that reason it is important that consideration and consultation be given to all aspects of this new land policy. It is going to affect a lot of people. We know that any changes that were made previously in any of the Land Acts entailed a lot of discussion both in this House and outside. It is only right that full consultation would take place with all the interests involved. Senators will realise that this is legislation which we cannot rush through the House. It has to take time and there must be consultations. Nevertheless, I hope that that legislation will be before the House before the end of this year.

I have covered the main points made by the Senators. I want to thank them for the contributions which they have made to this debate. They all realise the importance of providing this money. It is in order to keep the Land Commission functioning so that they will be able to pay for any lands they may be acquiring over the next two years. We have at the moment approximately 64,000 acres on hands and about 40,000 acres at various stages of acquisition. There is no question of running down the activities of the Land Commission. The Land Commission have sufficient work to keep them busy for the next two or three years even if we did not acquire one further acre. That is not our intention, and we are serving section 40 notices. Even though there has been a lot of criticism of the Land Commission for not issuing those section 40 notices, we must accept that the issuing of a section 40 notice does not necessarily mean that acquisition proceedings are going to take place. The notice merely gives the Land Commission permission to investigate and to see if the land in question comes under the various Land Acts. We will proceed along those lines. This £25 million which I am seeking here today will enable us to continue at least for two years and if it is found that it is not sufficient I or somebody else will be back here seeking a further allocation.

Question put and agreed to.
Agreed to take remaining Stages today.
Bill put through Committee, reported without recommendation, received for final consideration and ordered to be returned to the Dáil.