Agricultural Policy: Motion (Resumed).

The following motion was moved by Senator G. Hussey on 16 December 1981:

That Seanad Éireann expresses its approval of the manner in which the Government is tackling the problems of the agricultural sector and of the steps being taken by the Government to improve farm incomes and reverse the downward trend in agricultural output.

Debate resumed on amendment No. 1:

To delete all words after "Seanad Éireann" and substitute the following:

"is deeply concerned at the manner in which the Government is tackling the problem of the agricultural sector and calls for a halt to the decline in farmers' incomes."

—(Senator T. Hussey.)

Mr. Naughton

As I was concluding this debate the last day I asked if the Opposition were aware that the agricultural section of the community was in such a drastic state. Were they aware that farm incomes had slipped to such a drastically low level? If they were, they did absolutely nothing to stop this major decline in farm income. It is not surprising, therefore, that one of the major problems affecting the agricultural community is the number of progressive farmers who find themselves in financial difficulty. In the past six months since the Government took office it introduced a 5 per cent subsidy for developing farmers which will cover grant-aided borrowing since 1974. This is a very worthwhile subsidy and will relieve the pressure on many farmers who borrowed large sums of money in the mid-seventies when agriculture was at its peak and who now find themselves in major financial difficulty. This together with the national subsidy of 5 per cent which will cover all other farmers who carried out grant-aided improvement works will undoubtedly mean that all farmers with major borrowings which have been grant-aided will qualify for both of these subsidies. It will also, I have no doubt, relieve a lot of the financial pressure on farmers who developed their farms and now find themselves caught with a high interest rate and a recession in agriculture.

This Government, from the day they took office, have shown a commitment to and concern for the farming community. Expenditure in agriculture has increased by £70 million at a time when there are cut-backs in other sectors. We have increased the level of sheep headage payments to £9.50 for the first 150 ewes in flocks and a further £6.50 for the next 50 ewes. This scheme will benefit over 20,000 farmers, 15,000 of whom live in the west. In addition to that, there is a sheep premium for hogget ewes in disadvantaged areas. I ask the Minister and the Government to consider extending this scheme to the entire ewe flock in disadvantaged areas because it would be in the national interest to do so. It will, on the one hand, have the direct benefit of increasing sheep numbers, thereby increasing our exports and, in addition, it will secure the future of factories. One factory in my own county is at present on a two-day week simply because the sheep numbers have dropped so drastically over the last three to four years. This would be a very worthwhile scheme and I ask the Minister to consider it.

In addition to the above subsidies, the Government have implemented a calved heifer scheme. The subsidy of £70 will be paid to extra breeding stock in both the beef and dairy herd. This is a very desirable and necessary scheme at a time when we find that our national beef breeding herd has been completely depleted. We have a drop in numbers of 300,000 and this is very serious and reflects what is happening in our meat factories today. All our meat factories are on a two or three-day week simply because the cattle are not there to be slaughtered.

Somebody earlier in the debate made the point that live shipments should not be encouraged. I would not like to see that happen because we must have healthy competition between the factories and the live export trade. It is vital for the future of the farming community that these go hand in hand. I do not see why subsidies cannot be given from Brussels to the meat factories here to help them to meet the difficulties that they face similar to those which are given on live exports to Egypt and to other countries. The problem should be tackled in that way rather than by removing subsidies on cattle exported live out of the country.

The management and staff of factories must realise that the farming community lost confidence in them because of the way in which the factories operated in 1974. Farmers had such a dread of meat factories that it would be political suicide for any Government to tamper with the live export trade. The staff of those factories must realise that they will have to co-operate with the farming community to restore the confidence that was lost.

In addition to the £70 subsidy for the calved heifer scheme, this subsidy together with the beef cow scheme and the headage payments in severely handicapped areas will mean that every extra cow will be worth an additional £150 to the farmers there. This will increase the cattle numbers over the next two to three years. This scheme together with the new 14 per cent European Investment Bank loan, administered by the ACC, should give farmers the necessary incentive to buy breeding stock and so restore confidence in the whole farming industry.

One of the major problems affecting our cattle industry at present is the level of animal disease and the cost to the Exchequer. It was very worrying to hear a former Minister for Agriculture stating on Saturday, 16 January, that the type of test that had been carried out here for the last 16 years was not the right one. Taxpayers and the farming community were operating a scheme which, according to that gentleman, was not as satisfactory as it should be. In fact he quite categorically stated that the type of vaccine used was not the correct one.

We have five DEDs at different ends of the county and one could only describe as a complete storm the outbreak of TB that has developed in the herds there. At present 400 herds are locked up in the DEDs of culliagh Creagh, Moore, Kiltullagh and Ballaghaderreen. I ask the Minister to see what can be done to provide additional staff for the veterinary office there so as to get at the root of this outbreak and see how it can be controlled. It is very serious for the farmers involved. The compensation paid for reactors for the last three or four years is absolutely ludicrous and unfortunately, has not been increased for a number of years. The compensation at present for cows and in-calf heifers is £130, which is totally unacceptable. For cattle under 400 lbs dead weight it is £100 and for over 400 lbs it is £60. The Minister will realise the tremendous hardship on farmers when they experience an outbreak in their herd, and this compensation is totally inadequate.

The hardship fund, which has been on the books for years, does not operate, in my opinion. One can qualify for the hardship scheme only if in excess of 20 per cent of the herd is affected, and even at that stage one will be paid only for the number over 20 per cent. This is unacceptable and I ask the Minister to examine it with a view to dropping the percentage level and paying compensation for all cattle where it is deemed that the owner suffers hardship.

I ask the Minister to examine the export of disease-free cattle from locked-up herds. This was operating until February 1980 when it was stopped. I do not see why some arrangement could not be reached whereby those cattle could be transported under permit from the farm to the ship. People in the markets are satisfied when the cattle are disease-free and it does not matter whether they came from locked-up herds. I do not see where the difficulty lies in operating a scheme whereby these cattle can be removed by permit from the farm to the ship.

I believe the 30-day test is unjust. The farmers are the only section of the community who have their assets frozen for a time. If a farmer's cattle are tested and he is not able to sell them within that 30 days, his assets are frozen for the next 30 days because he cannot re-test them and he cannot sell. I would ask the Minister to examine this situation with a view to having the 30-day test extended to 60 days.

The abolition of rates undoubtedly is very desirable and the Government should aim at this for farmers working to a development plan in co-operation with ACOT. Farmers very often find themselves liable for considerable sums in the rate demand for sewerage services, water supply, refuse collection, public lighting and a number of other things from which they do not benefit. Farmers who pay big rates very often live on poor county roads which have fallen into complete disrepair over the past few years. This is unjust and should be examined with a view to a more equitable system.

I come from a county bordered on one side by the Shannon and on the other by the Suck, so naturally I am very interested in drainage. Grant aid was approved for a number of years for the drainage of the Boyle river and its tributaries and also for the Bonet. I regret that this provision was not availed of prior to now by the previous Government because inflation has been whittling away at this money and it is worth substantially less today than when it was allocated in 1978. I take this opportunity to ask the Minister to use his good offices to make available money for starting of those two projects. Last December 12 months money was again made available from Brussels for the carrying out of a survey on the Shannon and its tributaries. This money, £400,000, was subject to an additional £600,000 being made available by the Irish Government. It is regrettable that that money was not taken up in the budget and no finance was made available by our Government to put this survey under way. I ask the Minister to commence this survey as soon as possible.

One of the major problems we have in farming, particularly in the 12 western counties, is the size of farms and the fragmentation of the holdings. A scheme introduced some years ago, known as the small farm scheme, did much good for the west of Ireland. It is established that farmers who participated in it increased production by up to 50 per cent due to their working to a programme and to the advice they were given by local agricultural advisers. They had an incentive and a production target and many of them achieved that target. This scheme worked extremely well. I ask the Minister to examine the possibility of introducing a similar scheme for those small west of Ireland farmers which would increase their production and thereby the income of the people working them. A tremendous asset to that type of farm would be a fertiliser subsidy on, say, the first five tons of fertiliser. This would be of maximum benefit to the 35-acre farmer.

Another scheme in operation for a number of years which has been phased out provided that farmers who employed somebody on the land, be it a son or an employee, got an abatement on their rates. Here again the Government could examine the possibility of encouraging more of our young people to settle down and work on the family farm. The reason many of those people go away to jobs in industry is that the farm unit is not sufficient to maintain two people or to give the young person an income equivalent to what he would get in industry. Yet he has taken up the job of somebody who may have no other alternative but to go on the unemployment register. We could examine the possibility of making an allowance available to those people who would stay at home and work the family farm, thereby increasing production on the farm and at the same time reducing the dole queues.

One of the major concerns throughout the western counties is the extension of the area at present classified as severely handicapped. I know that the Minister is interested in having these areas extended as much as possible and I would ask him to consider having the whole of Roscommon classified as severely handicapped. The population has remained basically static, the quality of the land is poor and farm income is low. There are areas where farmers are working in tremendous hardship such as in the Clonown, Clonbern, Dysart and Ballyforan DED areas and Ballymurry. There is a clear case for having those areas included in the severely handicapped area.

At present in the west there is a major dispute with regard to the North Western Cattle Breeders' Society. This dispute is having a major adverse impact on farming in the west. It is the second dispute which has developed within 12 months and it is having a disastrous effect on the cattle breeding industry there. It is leading to the use of unlicensed bulls because the AI stations are not providing the service. The cost of the service when it was operating was £10, of which the Government paid a subsidy of £5. At the same time east of the Shannon that same service was being provided at £7. I cannot understand why this service was costing £3 more in Roscommon than in Westmeath or Longford. The Government are at present paying a subsidy of £5 per straw to those AI stations and I would ask the Minister to license the co-ops in the west to hold those straws. They can be got in the Dublin area for as little as £2 while at the same time the association who are carrying out this service in Roscommon, Mayo, Sligo, Leitrim and Donegal are charging £5. They seem to have a complete monopoly there. The Government are giving a subsidy to those people and they should use their influence to have those straws made available for the benefit of the farming community in the west.

Another problem encountered in the past six to eight weeks was the problem of freezing diesel oil. This is the second or third time this has happened during the last four to five years. People buy diesel oil in good faith, whether it be farmers who need it to do their work on the farm, people buying oil for their central heating or people in the haulage business. Unfortunately, when weather conditions deteriorate this oil is not fit to do the job it is supposed to do. The oil is supposed to be treated to such a degree that it can be used in temperatures as low as—9º, but this is not the case. The institute have introduced a standard, which is known as the Irish standard 251, and I would ask the Minister to see if that standard is good enough and to ensure that this is the standard of diesel oil supplied the whole year round. From April to September the oil companies supply diesel which is untreated. Many farmers may only buy the one tank of diesel in the year because they may be getting a contractor to do their heavy work. They may buy that tank of diesel some time during the summer and when they want to use it in winter it is frozen or waxed and will not operate. The same applies to central heating diesel. The Government should bring in an order directing oil companies to have this diesel treated to such a degree that it will not freeze in the type of weather conditions which we have had over the past month and to ensure that this is the standard of oil delivered to the consumer.

Some of my suggestions would cost money. In the financial situation in which the Government find themselves it may be difficult to finance all those measures, but we must remember that agriculture is the motor of the Irish economy. If agriculture collapses the whole economy collapses. I appeal to the Government to ensure that the necessary aids are given to the agricultural community to restore confidence and increase production because I shudder to think of what will happen if farming output is not drastically increased over the next two years. This will be difficult because the level of production has dropped so much. The level of our national herd has dropped to such a low level that it will be hard to bring it up. Our sheep numbers have gone down considerably over the last five or six years and it will be very hard to improve them.

I will raise one further issue which has created major problems for the farming community not alone in my county but right across the whole midlands and west, that is with regard to what is known as the Towey affair, where a large number of farmers supplied cattle to a meat plant in Ballaghadereen and unfortunately did not get paid for their stock. Many of those farmers face bankruptcy. This situation developed in November and December 1980 and nothing has been done by either Governments to alleviate the strain, hardship and the bankruptcy that faces those people.

I ask the Minister to examine the possibility of making an interest free loan available to those people to help to keep them in the farming business until such time as the affairs of Towey are wound up and until those people know if they will be able to recover any of their money. If those people do not get help there is absolutely no hope for them. Some of them had supplied their year's cattle, maybe £6,000 or £7,000 worth of cattle, and others had supplied up to £20,000 and £25,000 worth of cattle and have nothing only a piece of blank paper. I ask the Minister to examine the possibility of making an interest-free loan available to those people.

Mr. Fallon

As an urban-based Senator I do not mind saying a few things relative to the agricultural scene. I come from a rural background and, certainly, I am delighted to contribute to this very important debate. It goes without saying indeed that the importance of agriculture within the Irish economy cannot be stressed sufficiently. It is well known that if the farmer is happy and doing well, industry, every other service and the people generally are doing extremely well. That is well known. A return to that situation is something we all hope for.

One of the points I would like to refer to is the question of the common agricultural policy. It seems to me that there is some doubt at the moment regarding the actual implementation of the common agricultural policy. We all know that when we joined the EEC that was really the carrot which sold our entry into the EEC. It was the one thing which attracted us so much. Certainly, we all hope the Minister for Foreign Affairs and the Minister for Agriculture will keep our position prominent and, we hope, what comes from the discussions will be to the total benefit of our farmers. There is no doubt, too, that over the past few years there has been a real drop in the income of the farmer. Whoever the advisers of the young farmer were, they borrowed, from the ACC, banks and other institutions and now they are finding great difficulty in paying the money back. The special measures which have been announced, the rescue package, will cater for 8,000 or 10,000 farmers. We hope this will get them back on a proper economic footing again. Whatever the conditions of the rescue package, we know they were necessary and had to be introduced, otherwise many farmers would go to the wall.

As an urban man I often wonder at the lack of tillage. It seems to me that there are schemes for pig producers and dairy people but there does not seem to the a scheme for incentive for the tillage man. I feel there is no reason why such items as potatoes, cabbage, onions and other vegetables should not be sown solely for the Irish consumer. There is no reason why these items should have to come in from other countries. The import bill must be in the million pound bracket. I wonder if we could have a scheme for the tillage man, incentives for the tillage man to encourage the growing of the various vegetables that I have mentioned.

I know the Minister was in the Athlone area quite recently, I live quite near on the Clonown Road and my relatives live on the flooded land. Around Athlone, the Shannon drainage is one problem that has been discussed for years and years. I understand the Minister of State was there recently. He was not the first Minister to visit there. They have been up the Clonown Road many times. It is terrible to think, as happened last year in the middle of June, the best of summer grazing was totally flooded by the river Shannon. Many of those people are paying rates on land that is flooded for perhaps nine months of the year. There should surely be a derating situation there. The quicker the Shannon and the tributaries of the Shannon are drained the better it will be for many thousands of acres of land in the valley of the Shannon.

We do not appear to have a national plan for agriculture generally. We seem in some way or other to react to different situations within the agricultural scene. I wonder if a national plan for agriculture could be implemented. Farmers are still protesting on the streets. They have been on the streets over the past few months. This indicates to me that all is not well within the agricultural scene. While this national plan might be of some long-term assistance and benefit, in the short term I know that the various measures that have been introduced will be of some help. I hope that for the years ahead everything will return to profitability and viability for many of our farmers. It is not happening now but I hope it will happen in the years ahead.

Dr. Whitaker

Like Senator Fallon, I hope one does not have to be totally rural to make a contribution to this debate. I recognise that the debate is a piece of major political jousting between the Government parties and the Opposition and that it may be dangerous for an outsider to venture into the arena. However, from the relative safety of the sidelines, I hope I may question one thing, the complete validity of the basic assumption on which it seems to me that tournaments of this kind are conducted, the double assumption that the Government — any Government — has both the capacity and the responsibility to maintain farm incomes at some level thought to be appropriate or adequate. This is an assumption which must be qualified as, in my view, it is not wholly valid.

To develop this point may I remark upon the very high degree of variability of farm income over the years, and then consider why this variability arises and how and by whom it should, if possible, be reduced.

In his opening speech the Minister for Agriculture set out very clearly the recent experience in agriculture. If one ignores for a moment the severe fluctuations within the past decade, it is some comfort to find that in 1981 the real per capita income which agriculture provided for those fully engaged in it was about 25 per cent above the 1971 level. In between, however, the fluctuations were spectacular and disturbing. In the early years of the decade — in the run up to and in anticipation of our entry to the EEC — in the years 1970 to 1973, real income per capita went up by 64 per cent. In the first year 1973-1974 of EEC experience, to the great disappointment of farmers, there was a drop of 21 per cent in income. That was associated with the fall in the world market for beef consequent on the recession caused by the first oil price shock. Starting again in 1974, we have had two contrasting periods to date — 1974 to 1978, with a 58 per cent increase in real per capita income and 1978 to 1981 with a severe drop of 35 per cent.

When one examines this further one finds that three factors have contributed in varying degrees to these sharp fluctuations in farm income.

First, the rate at which prices have increased, second, the rate at which production or input costs have increased, and third, differences in the scale of output on farms. One may note in passing that this latter factor — the intensity with which the farm is worked — is primarily a matter for the individual farmer, though it must be influenced by the prices —costs relativity and therefore the farmer's prospect of profit from his work.

If one concentrates on those two most recent and contrasting periods — 1974-1978 and 1978-1981 — one sees at once how these three factors have been at work. In the first period — 1974-1978 — agricultural prices more than doubled, input costs went up 70 per cent and gross output went up 20 per cent. Everything was conspiring to improve incomes. In the second period, however, prices went up only a few percentage points, input costs went up, by comparison quite a lot, by some 30 per cent, and output went down a few percentage points. These are the three reasons for the fall in income which was so sharp during that period.

It is the farmer who has most to do with deciding the scale of his output, although that is influenced by the cost-price relationship and the profit prospect. Where does the State come in? The State obviously has a capacity and a responsibility in relation both to prices and costs. The State's greatest responsibility is in trying to have adequate prices fixed in the EEC negotiations — as the Minister is doing at the moment — and ensuring every other possible aid from outside. We cannot be too greedy. We have to consider longer term implications — the possibility of killing the goose that lays the golden eggs by inducing a seriously adverse reaction from our EEC partners.

The second great area in which the State has both a capacity and a responsibility relates to costs. It is the State's obvious responsibility to curb the high domestic inflation rate which is the main reason why farm input costs have been rising faster than farm prices in recent years. In general, the State's role is to manage its affairs so as to create conditions conducive to farm profitability, given farm efficiency; but I do not see that it has any obligation, nor has it the means, to see that farm incomes are maintained at some predetermined level.

After all, farmers are independent producers, not State employees. The appropriate level of income for a farmer could be said to be the level he can attain by efficient management of his farm. Professor Seamus Sheehy's reports in recent years show how great is the as yet unrealised potential of Irish agriculture. I recall Professor Sheehy's remark that Holland, with less than half our land areas, has four times our agricultural output.

A farmer's income will depend on the quality of the farm, on his entrepreneurial skills, on his choice of products, on the prices available, which are now largely determined in Brussels, and on the costs of his inputs. I said "now largely determined in Brussels" and that is really the result of the farmers' own wish. As Senator Fallon remarked, it was the farmers in particular who were to the forefront in voting for entry to the EEC because they saw in the common agricultural policy the assurance of attractive markets and prices. I must also remark that neither in numbers nor in the size of farms is the farming situation frozen. It is being influenced all the time by economic and social factors.

There are people who suggest that there should be a massive redistribution of incomes in favour of farmers in order to restore the income they have lost in the last income downswing. However, when one thinks of the hundreds of millions of pounds this would involve one realises it is beyond the resources and the responsibility of the State. We ought to ask the EEC to finance schemes designed to increase our herds and to improve farm income capacity, but we cannot realistically suggest that any schemes involving very heavy Exchequer expenditure should be considered as an Exchequer liability. We cannot pretend we are so ignorant of the state of our public finances as to see some prospect of reconciling heavy aid of this kind to farmers with the need to eliminate the current budget deficit. It is my belief that the resources of the State will be strained quite severely in helping to alleviate, on a selective basis, distress among farmers arising from heavy debt charges and from losses in the recent blizzard.

Mr. Walsh

I should like to make a few points. What is most important for farming at present is to have some type of national plan for agriculture. Despite our entry into the EEC we are still left with a stop-go situation for the ordinary farmer. The ordinary farmer under the farm modernisation scheme has to have a six-year development plan. He has certain targets to meet and he has to do things in an organised way. Unfortunately, for the average farmer, there is no national plan and we seem to be going in all directions at the same time. Unfortunately and tragically our national herd numbers are fewer now than was the position prior to our entry to the EEC. We have an incentive scheme at present being promoted by the Department of Agriculture to increase the national cow herd while at the same time restrictions and cutbacks are introduced under the farm modernisation scheme to limit grant aid to dairying to a certain number of cows. In particular, development farmers are restricted to grant aid for dairying to 60 cows and non-development farmers, who comprise about 75 per cent of the farming population, are restricted to grant aid in dairying to 40 cows.

I congratulate the Minister of State on his appointment and I look forward to some very progressive ideas from him. In addition to the restrictions I have mentioned there is also a 5 per cent reduction in all grant aid under the farm modernisation scheme and there are restrictions also in regard to such essential items as concrete yards which are essential for modern type farming. At this time it is unfortunate that those restrictions and cutbacks were made because the farming community in the past four or five years in particular have been very progressive at farm level in investing in the development of agriculture. They have certainly put a lot of money into machinery, concrete yards, milking parlours and so on. They have developed their enterprises at farm level and have generated a lot of activity and a lot of employment in the services to the farmers and in the provision of those buildings as well as in the area of land reclamation and so on.

As far as the production end of industry is concerned, the farming community have not been found wanting. But the bottleneck really occurs at planning and organisation level and that is why I am calling for a national plan.

In the process area, if you take dairying in recent years the increases which were fought for by former Ministers, Deputy Clinton, Mr. Gibbons and Deputy Mac-Sharry, have not been passed on to the farmers because the process section of the industry has not been able to take advantage of the full price increases. This has been because we and our dairying industry have a milk supply to our manufacturing units which has the lowest level of solids of any industry in Europe. This is because we do not have a national milk recording scheme. For instance, we do not know how much milk individual cows yield and we do not know the constituents of the milk. I cannot understand why the Department of Agriculture have been reluctant to introduce a national milk recording scheme. Very recently they gave permission to the milk boards to purchase computers but they have not gone along with the general demand from farmers to supply a national structure for milk recording. If we do not know what individual cows are producing in terms of volume and of constituents, we really do not know where to begin in that part of the industry. The Department of Agriculture should be much more progressive in that area. That would certainly allow a large percentage of the price increases which are granted in Brussels to be passed back to the individual farmers. In other words, the farmers should get more help from the Department of Agriculture in very difficult times when they are trying to compete with very advanced and sophisticated agricultural and, in particular, dairying industries in other countries.

With regard to the meat industry, in recent years CBF have been doing a very good job in marketing vacuum-packed beef, for instance. There is a market for this commodity, particularly in Germany but we are still not able to take advantage of it. We are not giving the meat export board the kind of teeth they should have. Again in recent years they have unfortunately had to cut back on some of their personnel and there has been a cutback in their budget. At difficult times we should not cut back the where withal for the national meat marketing board to try to find the best markets. We have had contributors here talking about and asking for the retention of the live export of cattle. I agree with that so that the best price can be got by the farmer but at the same time, in the interest of maintaining as much employment as possible, it would be very desirable that we process as much of that raw material as possible.

I cannot see why Irish manufacturers should not be able to do as efficient a job within the country as our competitors do in their manufacturing units on the Continent or elsewhere. I would again call for an overall national plan for agriculture which would be reflected at production level, in the processing sector of the industry and at marketing level. I sincerely believe that there is no difficulty at the production end. People in the production end of agriculture and the ordinary farmers are bewildered with schemes of various kinds. On the one hand people are calling on them to produce more of a certain commodity and on the other hand calling for restrictions on that same commodity. They would be quite happy to produce more provided they had a market for it because they have a processing section that is doing an efficient job. They are bewildered with schemes which are in conflict with one another. I know most of those schemes emanate from Brussels, but at national level we could do more to co-ordinate efforts to try to market the products which are being produced at foreign level at an efficient price. If the price is right the farming community will do an efficient job at their end of the industry.

I would ask the Minister of State, as he has direct responsibility for it, to do something about the disadvantaged areas scheme. That scheme was introduced to supplement the incomes of farmers in isolated areas and places where they found it difficult to make a living so that they could stay in rural Ireland and maintain the fabric of society there. I do not think it has worked and handing out Christmas boxes is not doing very much for farming. I was glad to read in the newspapers lately that an effort will be made not to have a handout of a few pounds once a year but to have a development aspect or factor to it and to use this money to improve farms. We had the Small Farm Incentive Bonus Scheme which was very successful. There were certain targets laid out and if you reached them you got a subsidy or a sum of money at the end of that period. Under the disadvantaged areas scheme you do not have to reach targets. You have virtually to do nothing at all. I also ask that the scheme be looked at in terms of categories of farmers to which it applies. I see no great justification in giving income supplement to farmers who are already earning in excess of the comparable income, I mean commercial category farmers. If an income supplement is required, surely it is required by transitional farmers because they are not earning the comparable income. If farmers are already categorised as commercial, they are earning in excess of the comparable income, so why should an income supplement be paid to commercial farmers? I would much prefer to see the areas extended, but that it be paid only to those farmers who are not earning incomes comparable to the average in industry.

The district electoral division boundary is so unjust in different areas, having commercial farmers in one area within it paid and other very hard-working farmers, because they are in the wrong DED, getting no help at all. I suggest it should be confined to transitional farmers of potential development to help them to make a living out of farming, provided they are making an effort to do it. There is quite a lot of money being paid to farmers in those areas through cattle headage payments, sheep headage payments and unemployment assistance for smallholders but it is so unco-ordinated that it is having no real effect. I would welcome some type of structure to have better use made of the many millions of pounds that are poured in. Over the last few years we have seen very little evidence of that. In some areas that I know the cattle output and the milk supply are decreasing instead of increasing. That should not be the case. The most important things is to have an improvement of planning at national level. It is hard to expect farmers to adhere to a plan if the Department of Agriculture have no overall plan in the national interest.

Mr. Butler

I am glad to have the opportunity to speak on this motion. It is vital to know what can and should be done for agriculture. The whole economy is based on agricultural production. If agricultural production goes down, the economy goes down with it. I am sure the Minister, the Government and even the last Government realised that situation. I hope the present Government will take more interest in the development of agriculture. The last Government fell down on their interest in the development of the industry. In 1973 we were advised by all and sundry, agricultural officers, the institute, the Department and the Government, that we should develop agriculture and encourage farmers to invest more in the development of agriculture. That advice was right at the time. We never dreamt that 1977 would come, and we were not prepared for it. It was very obvious that something would happen once we got out of the period of increases that were available to us until we became full members of the EEC. Our advisers, the Department and especially the banks, still advised farmers to invest more. Much of the blame for the farmers' problem rests with the banks. The banks' advisers should have realised this was going to happen, that there was going to be a fall back in development and hardships created by borrowings of farmers during that period. The banks kept encouraging the farmers to invest until last year. Then the brakes were put on by the banks, but the development had not stopped. Farmers had got millions of pounds from the banks, money that could not be paid back because the development was still going on and had not reached its peak.

Until such time as the farmers of Ireland can afford to pay back this money and produce what was expected of them at that time, there is an onus on the banks to have some sympathy for them and reduce their interest rates. If they do not do that, not alone will the banks suffer because many farmers will go bankrupt but also the nation will suffer. So will the man employed in agriculture, in the industry, in processing meat, milk, sugar, and so on. People in those areas are suffering now and will suffer, because the numbers employed in 1977 have been substantially reduced. I know that because I work in the dairying industry and I know the developments made in it in 1973 to 1977. In 1973 we did not believe the industry could reach the stage it reached in 1977. It was great for the country. The enthusiasm of farmers at that time was excellent.

The majority of good farmers invested and created jobs and finance for the State, and created an environment within the country which I believe was never achieved before. The balloon has now burst, for a number of reasons: bank charges and the high rate of inflation over the past five or six years. Unless we can control inflation there is no chance for us. All sections of the people must realise that. What is the main cause of the inflation? People anticipated too much. They felt they could get anything they wanted. We also had imported inflation. I suppose imported inflation lit the match. When the oil kings realised there was no money to be gained from the sale of their oil they got together and increased the price of oil substantially. That helped to create this 20 per cent inflation. We had to buy oil to keep industry going, to keep electricity going, and so on. We needed oil. We had forgotten our own raw materials. We had forgotten that we had coal under the ground. It was easy to import oil at the price we had to pay for it then. We had let coal industry run down to such an extent that when the price of oil soared we were not prepared to look at the coal situation and see how it could be developed. We must do that now.

Turf development was not let run down. The turf industry was recognised as a native industry. The Government recognised that we had to develop that industry. The increase in the price of oil was one of the main causes of inflation. All of us must make sacrifices to reduce inflation well below 20 per cent, if possible to single figures. If we could bring it down to 10 per cent or 12 per cent, we could look at the whole situation again.

At the moment we are looking at the inflation rate. When workers make a claim for increased wages they look at inflation and what it has done to them. They must be compensated, as I said before. Everybody must be compensated for the increase in inflation. The Government now realise the effect inflation is having on the economy and I think something will be done about it.

I have no praise for the EEC or the Minister who negotiated for us. They had a job to do. We got a five-year period in which we were guaranteed a certain increase in farmers' prices. Then the Minister for Agriculture had to renegotiate for us. Otherwise, we would have got very little from the Europeans. We have to fight for our own rights. We have a case to make, and I am not looking for anything other EEC countries are not getting.

If we examine the dairy industry we find that in Germany the annual yield per cow is over 1,000 gallons. Ours is 600 gallons or a little more. We are penalised. We cannot produce any more milk. If we do we are told we may be levied. Our Ministers are not successful in getting the point across that if we are an equal member within the EEC, we must be allowed to produce the same amount of milk per cow as the Germans or the French before incurring any penalty. Let us take the acreage. Per acre we are still worse off, because per acre here the average yield is less than 500 gallons, whereas the average yield in Germany per acre is over 1,300 gallons. With such a difference there it is very hard to believe that we could be penalised for increasing our production of milk. The same goes for beef and for pigmeat or any of our other agricultural produce. We cannot compete, in production, with the Germans. I would not be so much against them were it not for the fact that they import in order to produce. We produce 99 per cent of our cattle feed whereas the Germans, French and others, probably with the exception of Italy, import a certain content for their production. It should be made quite clear to the people in Brussels and elsewhere that we are entitled to fair treatment, that we are entitled to produce in equal quantity whatever dairy produce, meat, or other products are produced by our EEC partners before any penalty is imposed on us. If our case was taken up at the European Court level I feel certain we would win because I believe it to be so sound it would be an injustice to have it disallowed. Surely if it is a court of justice then justice must be meted out.

Having spoken about the EEC and the problems obtaining it must be said also that we have a job to do here. Our agriculture has developed through the co-operative movement which continues to play its part in that development today. However, if there was more unity within that movement I believe even better results could be achieved. I am not talking now merely about the ICOS, which represents the co-operative movement, but there are other people within the co-operative movement who have grown up directly within the development of that movement. Would that we could amalgamate their brain power in the development of our agricultural industry. Here I do not exclude the Department because they must play a part also. Perhaps the Department could get this going if the Irish Co-operative Organisation Society do not. But some group must re-organise the whole agricultural sector. Perhaps we could get them together and get rid of the jealousies obtaining within the industry. They should put their heads together and examine the European situation I have outlined. Perhaps I am wrong but that is how I see it. Our case should then be made at the highest level to ensure that we get our rightful share within Europe. I am pro-European; I always was and I so canvassed in 1973. I spoke here in the Seanad before 1973 in favour of our entry into the European Enonomic Community. I expected more than we have received. I agree that we have received much, that we have advanced because of our membership but we have not received the justice to which we are entitled.

Going into 1982 we realise the situation of our farmers today. Proposals are being advanced on how our farmers can be helped nationally, as they must be. The biggest help they could be given is to have their costs reduced in some way, whether by forcing the banks to reduce the cost of money to them or by subsidising the cost. Over the years, farmers, certainly progressive farmers, have obtained substantial loans from the banks that they cannot now repay. The expectations were too great. The advice they received may have been incorrect or the advice was correct but the farmers were unable to interpret it correctly and they invested wrongly. Whatever the cause, they are in serious trouble now. They must be helped now.

This nation has always depended on the development of its agriculture and always will because this is an agricultural country. We have the land to produce and our climate is right. I believe the will is there and all that is needed now is the proper encouragement, assistance from the State and from the EEC.

Mr. Fausset

The complex picture of agriculture has to be examined to ascertain what is causing its present day problems. After so many years of EEC membership, when we were told that agriculture would be its prime benefactor, that industry was the sector that really would have to pull up its socks, as it were, to withstand competition we find in 1982 that agriculture is the sector most in trouble. Farming is a business and must always be treated and approached in that way. Any business requires long-term planning as has been mentioned by several Senators. We must cease this stop — go policy that has been the bugbear of the agricultural sector since I entered it quite a while ago. No business could progress along those stop-go lines. Neither can agriculture.

Senator Whitaker asked why the difference between one farmer's income and another. One of the reasons possibly is the ground he works. I think the Senator answered that question himself. The second difference would be the amount of rainfall in a particular year; if a farmer is on a dry farm a wet year is great for him; if another farmer is on a wet farm a dry year is great for him. That would influence very much the income of one farmer versus another with the same acreage. The third thing that would probably influence the farmer's income in any given year would be whether, through good or bad times, he stuck to whatever he was doing, provided it was planned and he knew what he was doing by planning and working for the right markets and outlets. Planning needs all the available information worldwide. Now that we are in the EEC, as other Senators have said, we should be getting directives as to what we should be providing for in the next five years at least because most of the groundwork for farming in the next five years is already being laid.

It is fundamental that we know where we are going and it is fundamental that we work to a plan. It is easy to think of farm produce as just growing out of the ground, the farmer waiting for his crop and then getting big money, say £600, for a three-year old bullock. It would be nice to see that animal growing for three years, lying in the sun, and then being sold and the money pocketed but unfortunately that is not the case. That animal has been eating food for three years, food which is becoming dearer each year even though it is a produce of the field. As a calf he is fed on milk and hay, grass and silage must be provided which, in turn has to be treated with expensive fertilisers and worked by expensive machinery. That animal often leaves little spendable profit after expenses are paid.

All well run businesses and farms must work to a plan and in agriculture this is far more applicable than is realised and accepted. Few people realise, even the farmers themselves, what is involved in planning. In the case of cattle numbers, where a decision is made consciously or otherwise to increase or decrease the herd, most unusual and unforeseen things can take place. What happens when the farmer decides to increase the herd? The first effect is with regard to cash flow because animals are not sold. Secondly, the farmer withdraws animals which weight 500, 600 lbs or more from the meat market. This will cause a scarcity. The curious thing about this in our national agriculture is when one person decides to increase his herd, and others take the same decision; the same applies when the decision is to reduce herds. Thus we have the ups and downs in our trade and in our exports. Thirdly, the farmer will need to provide the extra feed and the funding for this food, together with the extra interest payments if he has to provide for the stock out of borrowed money. With our low stock numbers at the moment the newly introduced 5 per cent will be an asset in this direction.

Agriculture is a growing business and industry in every sense of the word, and should be treated as such. The potential is there. The fields can carry more animals in summer but at best that is only half of the year and we have a very long winter with a high rainfall. Here lies a large part of our problem which affects increased stock numbers. The increased use of fertiliser, both chemical and organic, can double the grass growth or the carrying capacity but, at the same time, it softens the top of the ground. It alters the structure of the soil and clears away the moss at the same time increasing the humus of vegetable matter, and poaching occurs. Then the animals must be taken off in the winter. Where are these animals to go? According to statistics we have winter housing for only half of our livestock. Some of them can remain on the high dry fields where they spent the summer and where they will do no harm, but the remainder of them will have to go on the market. If they are not going to go on to somebody else's field they will have to go for export, often at a time when the market is not favourable and when they have to be sold at prices which do not bring the desired or the full financial return either to the individual or to the Exchequer. This means we need a considerable investment in further winter housing if we are to do away with seasonal gluts or fluctuations and have a steady, sure profitable marketing system under which we can sell when the time is right. This, of course will entail vast investment which can only be done over a period of years. The Government, realising this, have introduced the 5 per cent interest subsidy for development farmers and such people who want and need to provide housing for their stock in winter.

Agriculture is an industry and we must always see it as that. Perhaps because it is such an old industry we are inclined to forget that it actually is an industry. Most of our ancestors came from farming. The land was there before we came and it will be there after we go. Gone are the days of the horse and cart. Agriculture has gone through tremendous change. It is now an industry which has all the problems of any other industry. Today's farmer has to provide finance for the purchasing and the keeping of equipment, maintenance and renewal. He has to contend with high input or raw material costs, higher labour costs on the farm, and very often for the undeveloped farmer the purchase of these materials is at a rate which, due to seasonal demand, is out of proportion to what he would pay at a different time of the year. He will need to provide storage. In his plan he will need to ask himself, should he grow this material himself? Personally I think that in a lot of cases he should not grow that material himself because a lot of the wet land down from the midlands to the west is much more suitable for growing grass and the growing of feed should be left to the people on the more sunny eastern coast. Nevertheless in his plan he must provide for his industry in a businesslike fashion. He must get his raw materials in store so that he will have them when he wants them.

Agriculture has gone through tremendous changes. Today we are no longer agreeable to accept what the land will produce. Artificial fertilisers, selective weed-killers, sophisticated machinery have altered the whole scene. Farming is now a competitive industry, working on tighter margins, and unless properly controlled we may find ourselves, as many farmers do today, in financial difficulty. Due to the relatively long time taken to increase or decrease output, the indications are often misinterpreted. The high cattle sales of late 1979 were not a sign that things were going well — it was a sign that farmers were selling off their stock. To protect both farm earnings and our valuable export, something should have been done at that stage. It certainly was not a time to impose a 2 per cent levy, but a time to be aware of what was happening, to restore the lowered morale of the industry and to be ready with a helping hand, a word of encouragement and financial assistance when it was obvious that very soon it was going to become necessary. The sheer injustice of that 2 per cent levy really dispirited the farmers, who had had some good years and had got an increase in earnings. They had money to spend in 1978 and it was not hoarded. The majority of this money was well spent. Who needs a washing machine more than a farmer's wife? The new tractors bought in 1978 are really pulling their weight now in these hard times. Had these new machines not been purchased, agriculture would be grinding to a halt today.

Despite all this, the Government of that time could not wait for the harvest to ripen to introduce prematurely the levy, with the normal result of too much haste. They sickened the goose that was laying the golden eggs of our export trade. Agriculture must not be treated like a hen plucked of its feathers, chilled by the wind and then expected to lay. The 2 per cent levy was on gross sales and did not reflect the net profit to the grower. It was a tax that had no relation to 2 per cent of a farmer's income and under extreme circumstances could take all their income, or even cause a loss. To cite an extreme cases, if a cow worth £500 met with an accident and the farmer brought her to the meat factory on the advice of a vet and got £250 for that cow, he had to pay £5 tax on his loss. The levy in itself did not do all that much harm, but a straw shows which way the wind blows and that measure rocked the confidence of the agricultural community. If this was the way they were going to be treated, they did not see the point of continuing.

I support this motion, as a farmer. This Government have their facts right. They know the problems and also the potential of the industry and are making arrangements to help to put this important industry back on the rails. This will bring prosperity to both the industry and the country, confidence that the future is worth working for, that our problems are understood and that there will be no fear of being ripped off when we have made a few pounds.

We live in an age when wage settlements usually include an incentive bonus, meaning that the more that is produced the bigger the income will be and the higher the living standard. What has happened so often in the past in the farming community is that the farmer produced the goods and some other section of the community collected the bonus. Agriculture, in common with other industries, is very short of capital for development. Above all, it needs a restoration of confidence in it. This, in turn, will provide the will to work and the situation will improve for all. A determined effort is being made on the part of this Government to control inflation, which has greatly affected out exports. We, as an export oriented industry, certainly are feeling the breeze. With this Government we can look forward, as farmers, to a confident future. We can work in the knowledge that whatever is coming will be ours. That is why I support this motion.

Mrs. Bolger

I am very proud to support this motion today approving the manner in which the Government are tackling the problems in the agricultural sector. Nowhere in Ireland has the decline in agriculture manifested itself so clearly as in Wexford, which is, as everybody will know, the Model County. I am talking particularly about the Macamore area with its high percentage of developing farmers. With the quality of the land in that area, farmers have been experiencing extreme difficulties over the past few years. I hope that the Minister, sometime in his term of office, will declare this a disadvantaged area.

By now it must be realised that agriculture is our basic industry around which most employment revolves, and, indeed, our whole economy. Most of our problems are due to the dreadful economic policies pursued by Fianna Fáil in their four years in office, but some are also due to a world recession. As things get tougher — and I firmly believe that they will — a reliance on any industry other than agriculture is not realistic. We have seen over the years how our economic growth has depended entirely on the success of the farming community. We, in Fine Gael, have always recognised their importance and, indeed, in our 1981 election programme laid great emphasis on recovery. Since assuming office last June, given the extreme financial restraints, the Minister and his team have worked tirelessly to stop the decline in agriculture and I compliment the Minister on this. He is succeeding and this is recognised by everybody. But we cannot fool ourselves. There is a very long road ahead. The Government cannot achieve their aims without the help and co-operation of the farmers and the producers.

Farmers must treat their enterprises like businesses in these years. They must be more commercially minded and forward looking. They must be independent and intensive. Most important of all, they have got to be efficient in order to survive in the eighties. As in any business, there must be better forward planning and market research. Farmers must, when planning, take into consideration all the evils that can befall any business or any industry, namely, inflation, interest rates, world recession, ever-changing currency fluctuations, EEC regulations and world trends in general.

The whole area of farming opens up so many avenues and paths to job creation in the spin-off industries. In order to reach our potential in intensive farming we must research our markets, we must be more dynamic and we must be more aggressive and eradicate this cancer of inflation in order to compete effectively. It is horrifying to read that we spend £638 million on food imports. That is too high and it must be rectified. I would like to see a greater emphasis on our flour, fruit and vegetable markets and our food processing industry. Success in this area would not only create jobs but would help our balance of payments considerably.

In order to supplement the Government's action in these areas young farmers need better educational facilities. We need greater co-operation and understanding between the unions, the IFA and other farming organisations and the Government. Those in leadership positions in farming organisations carry a great burden of responsibility and should be mindful of using their position for the betterment of the community they represent and that of the people as a whole. It is time we all united and that we had co-operation and not confrontation.

Over the years women have made an enormous contribution to agriculture which has always gone unrecognised. However, I hope they will continue. There is great scope for them in the horticultural area and, given guidance and help, they will take up this challenge. I hope that the Minister will look at this area and that his Department or the IDA will help.

I also appeal for more understanding between the rural and urban populations and a better insight into each others' problems. None of us is more than a few generations from the land and many of us owe our success in life to the land, not least of all, the Minister. Let us not forget that farmers and their families work 365 days a year, 24 hours a day. They cannot go on strike; they cannot afford to get sick, and most of them never have a holiday, all for small reward in tough working conditions such as our recent blizzard in which Wexford and Wicklow suffered enormously.

As a mother I have one small worry in the area of agriculture and that is the lengths to which farmers have to go to be efficient and profitable. It is worrying that some of these methods may affect our future generations. I refer to the ever-increasing use of sprays and pesticides and the hormone treatment of our beef herd and, last but not least, the quality of and the additives to some of our pasteurised milk. The quality of these products is being affected by some of the modern-day methods. It is an area that needs to be monitored very carefully to make sure that it has no harmful effects on the generation coming up.

Mr. Howard

I welcome the opportunity of participating in this debate which deals with our principal industry and which also deals with the manner in which the Government are approaching the problems that affect agriculture. I am very happy to support the motion before the House. At this stage I would remind the House that there is also an amendment down. Looking back at the proceedings of the House for the past few hours, a person could be forgiven for doubting that there is an amendment because there seems to be a notable reluctance on the part of the Opposition to come in and support their amendment this evening. I say this because, on Wednesday, 16 December 1981 when this motion was before the House, there were three Opposition speakers supporting their amendment. Their defence of it was of a very determined nature. In the course of their contributions they sought to imply that the difficulties in agriculture which have existed for some time could be traced to the change of Government last June. They were highly critical of the manner in which the Minister was dealing with the problems in agriculture. There would appear to be a change this evening. I hope it is because the people who put down that amendment have recognised that the policies of the Government to improve the situation in agriculture are working. Later on I will go on to show that independent experts in that field have produced figures to show that the decline in agricultural incomes has been halted.

I welcome the opportunity to support the motion which asks Seanad Éireann to express its approval of the manner in which the Government are tackling the problems of the agricultural sector and the steps being taken by them to improve farm income and to reverse the downward trend in agricultural output. I am amazed that an amendment has been put down to that motion to delete all words after Seanad Éireann and substitute

"is deeply concerned at the manner in which the Government is tackling the problems of the agricultural sector and calls for a halt to the decline in agricultural and farm incomes."

As I said a few moments ago, independent experts have already produced figures to show that the decline in agricultural incomes has been halted. I wonder if the Opposition have decided not to proceed further with their amendment.

I listened to the Minister's speech on 16 December and was impressed by his commitment to save the agricultural industry from the perils that confronted it then and some time previously. I recognise and applaud the positive steps which he has taken to restore confidence and progress to our most important industry. The Opposition, on that day, attempted to justify their amendment. They tried to pretend that the difficulties in agriculture had come about only since last June and to ignore the fact that the problems and difficulties in agriculture originated two and a half to three years ago.

Between 1973 and 1978 the agricultural industry expanded. There was increased production, increased output and farm income growth. Farming confidence was at a record level. The industry showed a remarkable capacity, a capacity perhaps unrivalled in other sectors of the economy, to respond by increased production and increased activity to the opportunities which confidence and markets can present to it. The finest years that the industry has known were the years 1973-78. These years coincided with the leadership of former Deputy Mark Clinton in the portfolio of Agriculture. We should recognise the contribution which he made to that progress and the satisfactory terms and conditions which he negotiated for farmers within the EEC. About 1979 things changed. We had a new Government and a new Minister, but there was also a new disturbing feature. People outside of farming appeared to resent the progress that was made in agriculture. There was a failure by the people outside of agriculture to recognise how important prosperity within agriculture was to the entire nation and a reluctance or a failure to recognise how the success of rural Ireland is closely interwined with urban activity and urban life. The Government in 1979 failed not alone to protect agriculture but to defend it and explain to the non-farming public how vital a successful agriculture was for the national economy. It is in the nation's interest that a thriving agriculture should generate increased exports which, in turn, will help the balance of payments situation and which will also create jobs in the servicing of agriculture and in the processing of agricultural production.

The anti-agriculture views which prevalied among certain sections of the non-agricultural population were shared, to some degree, by the Government of the time. Instead of supporting the industry and giving to it the two great requirements of agriculture — confidence among the people engaged in the industry and the capital needed to finance developments on Irish farms — there was a tendency for that anti-agriculture feeling to be shared by certain elements within the then Government. The result was that in the budget of 1979 a packet of tax measures and levies was imposed on the industry. There was a resource tax of £3.50 per £ poor law valuation, a 2 per cent levy, a disease levy, a milk levy and an inspection levy at meat factories. Perhaps there were others also. The one common factor in the package of levies and taxes introduced in that budget was that they were not related to the income capacity of the people engaged in farming to pay them.

The purpose of these levies was to squeeze the profit margin on farms. At the same time, another very serious development was taking place. By virtue of the policies pursued by the then Government inflation was rising steeply. With it was rising the cost of farm incomes. Therefore, the combined impact of the packet of levies and taxes plus the rising cost of inputs had the effect of reducing the profit margin of farms. This hit firstly at the confidence of the farmers and secondly removed the capital that was vital for re-investment in farms and also needed to repay loans borrowed by farmers for development purposes. The policy at that point appeared to be to penalise increased production and prosperity in Irish farms by levies, taxes and higher input costs. The result was to undermine confidence and remove capital resources. The net result of all these factors was to depress production on farms. The rot set in at that stage and for the next two-and-a-half years continued at an ever-increasing rate.

That is to a degree political; but it is necessary to put the record straight, especially in view of what was said here on 16 December last. The consequences of what happened in 1979 and onwards were frightening, not alone within the agricultural industry but outside the farm gate as well. By not encouraging production on Irish farms and by reducing the volume of output, exports dropped. This, in turn, created a greater deficit as far as our balance of payments was concerned. Jobs were lost in industries involved in servicing and processing agricultural production. There was, in addition, a loss of jobs on farms. The effect of pushing farmers' sons and daughters out onto an already overcrowded labour market where they are competing with other people for already scarce jobs is to drive up the unemployment figures.

The greatest factor, in addition to the levies, taxes and increased costs on farms, is loss of confidence. It is necessary that confidence be restored to the industry.

To return to the situation which confronted the Government when they came into office in June last, they inherited a problem of immense proportions in relation to agriculture. Another factor that was ignored in the debate here on 16 December 1981 was that the new Government found a deficit in the Department of Agriculture Estimate in the region of £57 million in financing the existing schemes within the Department. Therefore it was illogical for people who were associated with a Government who allowed a deficit of that size to develop in the middle of the financial year to preach here five weeks ago about the need to spend money here, there and elsewhere. Six months later we can look back and see the first indications of satisfactory results of positive actions which have been taken. The decline in farm incomes has been halted after two to three years. Measures are being taken that will restore confidence and stability in the industry. The shortfall in the Estimate of the Department of Agriculture of £57 million in June last has been made good. In addition the Government have provided substantial additional funds for every industry. Interest subsidies have been negotiated at EEC level and, in addition to these, interest subsidies are being provided by the Irish Exchequer. The Minister for Agriculture and the Irish banks are negotiating a packet to deal with the serious problem that approximately 6,000 heavily borrowed farmers in the country are facing, and indications are that satisfactory results will be obtained there. Special facilities have also been negotiated with the European Investment Bank to make moneys available for livestock expansion, and a £70 subsidy is being provided for every additional calved heifer. The cutting of the VAT rate for certain agricultural contractors and the continued removal of rates on agricultural land are all elements which are helping to restore confidence and to start putting in the amount of capital necessary to get activity on our Irish farms going again.

It has been calculated that the cost of all the measures that have been taken since last June by the Government will in 1982 amount to about £88 million. This sum in addition to what I hope will be a satisfactory EEC price review will get that extra capital into agriculture. From it I hope that we will begin to see very tangible indications that productivity is starting to pick up again, that output is increasing and that farm incomes are gradually beginning to rise.

Another important factor which will contribute greatly to the success of the Government's programme on agriculture will be their commitment to reducing the rate of inflation. The Government's commitment there is very strong and I emphasise that I wish many others regard it as being an essential part of restoring activity, productivity and prosperity to the agricultural industry.

One other factor that I want to mention briefly which will have a very substantial impact on the future of the agricultural industry is the common agricultural policy of the EEC. It is only appropriate at this stage that we recognise the efforts being made by the Minister for Agriculture and the Minister for Foreign Affairs in going to the capitals of Europe, meeting their opposite numbers there and lobbying to defend the CAP and ensure its continuation. The CAP will be vital to progress on Irish farms in the years ahead. I recognise that the principal opposition to the CAP is coming from the United Kingdom and West Germany. They, of course, are trying to pursue a policy that will give and guarantee cheap food to their people. What apparently they fail to recognise is that the CAP is achieving that. There is no point in expecting in Ireland or any other country in the EEC, that goods can be produced on farms below genuine production costs. Therefore, the need to defend agricultural policy in the interests of our farmers is very great, and I am confident that the commitment of the Minister for Agriculture, the Minister of State here and the Government in that field is unquestioned.

I am often troubled at the complications which can be caused to the whole volume of agricultural production and export by the importation from New Zealand of substantial quantities of dairy products and sheepmeat to the United Kingdom. In the past we have heard of milk mountains and beef mountains in Europe and imports from New Zealand, yet the United Kingdom seems to be able to get in these products without the slightest difficulty. I have always believed that these imports rather than production on farms within the EEC contributed in greater part to the creation of these mountains.

I noticed that some speakers became parochial in parts of their contributions and, with the permission of the Chair, I may get away with a plug for my own county. In view of the fact that the Minister for western development is here in the Minister's chair, I want to refer very briefly to problems that exist with regard to the disadvantaged areas. One of the factors that go into the decision whether an area is disadvantaged is the size of industrial earnings. In areas within my own county which are excluded from the disadvantaged areas, the industrial earnings that may be available are of very little benefit to the full-time farmer who is depending on the output from his farm for his livelihood. Therefore, because he is on one side of a river or one side of a road it is unjust to penalise him because industrial earnings for people other than himself may be availiable within that area or townland. I am totally unhappy — and I expressed these views in the past — with regard to how these areas were originally defined. I have often been amazed by the fact that the old Board of Guardians districts were used originally as a method to define the boundaries of these areas. Even 90 years ago Board of Guardians areas were considered obsolete and it is amazing that 60 or 70 years later these boundaries should be resurrected for the purpose of defining the disadvantaged areas in this country and excluding people unjustly in many cases.

I want to conclude by saying that I support the motion fully. I recognise, as did practically every other speaker whom I heard contributing to the debate, that agriculture is our primary industry. Its success is vital to the nation. The progress of all our people is dependent on a successful and thriving agricultural industry. I compliment the Minister and the Government on the positive steps they have taken to deal with the problems in agriculture. I congratulate them further on the fact that now after six months in office the results of their positive policy are already becoming apparent in the improvement in agriculture and in farm incomes, the restoration of confidence and the pumping of additional finance into industry. I support the motion.

Mr. Higgins

I am delighted to have this opportunity of supporting the motion which states:

I was delighted that the Government treated this motion so seriously that they thought it worthwhile to send the senior Minister for Agriculture, Deputy Dukes, into the House for the debate prior to the recess and the Minister of State with special responsibility for western development, Deputy Nealon, to take the debate on this occasion. I am delighted to welcome Deputy Nealon because as a westerner he knows that with this portfolio there is a high degree of expectation from him. We know that he has all of the attributes necessary to fulfil this portfolio in a glowing fashion. Coming from the west, the Minister of State has an intimate knowledge of the problems inherent in western agriculture.

I particularly commend the frank assessment by the Minister, Deputy Dukes, when he addressed the House prior to the recess, his admission that there is a major crisis in agriculture and the manner in which he refrained from political point-scoring. He could quite easily have done so as the Opposition are most vulnerable in this respect. It is well known that the decline and the decay in agriculture did not start in the last six to seven months. As it has been eloquently pointed out by Senator Howard, this Government inherited a quite unbelievably chaotic situation, the breeding herd having been almost halved, farm incomes having dropped by 60 per cent and morale deflated to an all-time low.

Senator Tom Hussey in his address to the House prior to the recess waxed lyrical on the measures that had been taken by Fianna Fáil in office. He was then a junior Minister with responsibility for agriculture in the west. He mentioned that six support measure had been taken but I would say to Senator Hussey if he were here for my contribution, that this was too little and too late. It was the equivalent of bolting the door when the horse was gone. Decline had been starting us in the face for the past two-and-a-half years.

A point touched upon by Senator Howard was the total lack of appreciation of the fundamental problems inherent in and related to agriculture and the problems of such magnitude that beset farmers and the snide, cynical attitude of urban and city dwellers towards the problems of agriculture, and their failure to appreciate the contribution that agriculture has made, is making and will make in the future. Farmers have for generations found themselves in the quagmire and it is very easy for people to snipe from the relative security of their ivory towers in the towns, people who are cushioned very often by all types of benefits, at the type of dilemma in which the farmers finds himself.

We have 26,000 full-time farmers whose family income is below £19.50 per week and in the west many farmers live on an income of less than £15 per week. The average farm income for 1978 was £37.31 per week while at the same time his counterpart in industrial employment enjoyed an average week's wage of £79.35 per week. In 1978 to 1981 there was a drop of 60 per cent in farm incomes while public service salaries increased by 50 per cent over that period.

Do people realise that our agricultural exports purchase our oil, coal, iron, steel and rubber? Do they appreciate that without agriculture the wheels of industry would grind to a halt, that their industrial jobs would go? Can they possibly appreciate that farmers have a genuine grievance and that the only way in which our present economic dilemma can be tackled effectively is by starting with increased agricultural profitable production? The only way we can start to rectify our disastrous economic situation and our balance of payments, the only way we can start reducing unemployment and curbing inflation, is by increased profitable agricultural production.

It is a fact of life that whenever recession hits a country, particularly this country, the farmers are the first to be hit. In this respect I welcome the measures being taken by the Minister, especially the announcement of the £70 interest subsidy per cow. This is a major contribution. Some play has been made by Opposition speakers that the £100 per cow as initially promised in the Government's programme at the election has not been fulfilled. If you take it according to the letter the Government by paying £70 at this time have exceeded the promise that was made by way of first payment. Here I see the cornerstone of our agriculture revival. If we can get our cow number up everything else follows. I also welcome the second-time silage grant, the interest subsidy of 5 per cent and the other measures being taken by the Government.

It is most appropriate that the Minister of State, Deputy Nealon, should be here for this debate because the west has not got the regional aid to which it is entitled by virtue of the fact that it is well recognised by our Government and by the people in Brussels that it is a disadvantaged area. Regional aid has not been getting to the west in sufficient quantity. In the west we have very special problems. We have inherent problems of low fertility, high fragmentation, limited off-farm job opportunities, but we have potential despite the fact that we are very distant from the markets we serve. In addition, we have the problem of a lack of land in this respect, that the Land Commission seem at present to be sitting on a considerably high land bank and that the process of acquisition, allocation and re-allocation of land does not seem to be taking place at a sufficiently speedy rate.

Senator Tom Hussey mentioned the western drainage scheme and the benefit it brought, particularly during his period in office. I would point out that, while the scheme itself is well-intentioned and in theory should work very well, in practice it does not work very well. First of all, the offices seem to be grossly understaffed. Secondly, the business of sanctioning schemes seems to be slow in getting under way; and, thirdly, the whole effective operation of the scheme seems to be hampered from the very outset by the fact that arterial drainage has not in the past been expedited in a manner which will aloow those small individual schemes on farms to take place.

Arterial drainage is of paramount importance and, unless we open up the main drainage arteries, the western drainage scheme as and from now cannot take place effectively. As somebody who comes from the west but who is a relative layman in the agricultural field, not being a farmer, I fail to see, with the degree of expertise that is available and has been available to successive Ministers for Agriculture over the years, why it has not been possible to stabilise agriculture and get it on an even keel. Farmers cannot take the blame. They have been buffeted in the past by constant fluctuation. They have been told to diversify, to go into this area, that area or the other area. There is over-production in one area and they are told to chop and change. Therefore, this has put a major dent in their morale. I again emphasise the point that with the number of experts the various Ministers have had at their disposal, surely it should have been possible to forecast trends and to take cognisance of impending factors which have influenced agriculture.

Senator Hussey mentioned that during his tenure in office we had been successful in negotiating the £300 million deal for western development. When £300 million over ten years is divided by 12 counties, the calculation and the answer is obvious. We need in the west a blueprint specifically designed for western development, for conditions in the west, for western agriculture. I honestly believe there is money to be got in Brussels for such an innovative plan. I know that the Minister will do all in his power to draft such a plan and have it before both Houses in the not too distant future. I should like to touch very briefly on a point mentioned by Senator Naughton in relation to the Towey operation in Ballaghaderreen.

An Leas-Chathaoirleach

The Chair would like to intervene here. I feel this is sub judice.

Mr. Higgins

Thank you. If you have any anxiety in that respect I will refrain from referring to that matter. In conclusion, I should like to say that agriculture is something we are basically good at. We have the soil; by and large we have the climatic conditions; and we have the people prepared to work. We pride ourselves on having some of the best agricultural land in Europe. However, it is a very sad indictment of us that, despite our agricultural resources, as an agricultural nation we are incapable of feeding ourselves. There are vast imports in processed form of basic foodstuffs and agricultural products, products which we can produce and are producing ourselves. We have a young, forward-looking and progressive generation of farmers who are prepared to meet the challenges. But they need confidence, leadership, guidance and land. I would ask the Minister, to take cognisance of the points I have raised.

Mr. Kennedy

Is mian liomsa ar dtús fáilte a chur roimh an rún seo atá ar an gclár agus ba mhaith liomsa comhgháirdeas a ghabháil leis an Aire Talmhaíochta agus leis na hAirí Stáit as ucht an méid a bhfuil á dhéanamh acu chun cursaí fheirmeoireachta agus cúrsaí talmhaíochta a fheabhsú agus a chur chun cinn.

I am very pleased to join with the other Senators in support of this motion. In doing so I am pleased to recall the great work that has been done down through the years for agriculture and for farmers by former Ministers for Agriculture, people such as Paddy Hogan, James Dillon and Mark Clinton. I am keenly aware of the dedication and commitment of the present Minister, Deputy Alan Dukes, and the Ministers of State, Deputies Ted Nealon and Michael D'Arcy to the development, expansion and prosperity of Irish agriculture and of Irish farmers and, in particular, to their primary objective and commitment: a four-year programme for the expansion of the national dairy herd by 400,000 additional cattle. As part of the package of restocking incentives the Minister should give a direct grant, rather than the interest subsidy of £100 to farmers for every additional heifer in the herd by June of this year compared to June of last year. In view of the scarcity of resources and money, farmers would be satisfied with the direct grant of £70 in June of this year to be followed by a further direct grant of £30 in June of next year. This is essential if the level of our breeding stock and a vast increase in the volume of production is to be achieved.

I am pleased to have the opportunity to speak on this motion since I come from an urban-rural constituency. I believe that the farmers are entitled to a fair and guaranteed price for their milk, cattle and other products. In my own county of Limerick many farmers have suffered heavy losses because of the high incidence of tuberculosis and brucellosis. I have urged the Minister, and I do so again here tonight, to do a little bit more to improve the hardship fund and to make realistic payments for TB and brucellosis reactors. These payments have remained unaltered for the past number of years.

I should also like to urge that every effort be made to extend the 30-day test to 60 days for animals sold within the state while maintaining the 30-day test for animals for export. I welcome the initiatives and the comprehensive package of aids and incentives to alleviate the serious plight of Irish farmers which have been worked out and are being implemented by the Minister for Agriculture. It is encouraging — other Senators have referred to this also — to note a return to some respectability in farm incomes since the present Government took office in June 1981. The annual agricultural review pointed to the fact that the agricultural situation has picked up significantly and indications are that morale and confidence are being restored among the farming community.

The Minister is aware of the predicament of Irish farmers and is prepared to pursue every possible solution. An indication of the task which faces the Minister and the Government can be seen from the fact that since 1978 farmers have been caught in a price-cost squeeze. In 1979 farm prices rose by only 5.8 per cent while input costs rose by 12.6 per cent. In 1980 farm prices actually declined by 3 per cent while input costs rose by 15 per cent. The decline in family farm incomes in those two years was over 50 per cent. In the same period the growth of agricultural credit reached new heights. Loans which in 1978 amounted to £760 million, in 1980 jumped to the staggering figure of £1,132 million. Worse still, the interest rate jumped from 12 per cent to 18 per cent.

While all this was happening, while the crisis in agriculture was developing, what did the previous Government do? As Senator Howard said, they imposed the infamous 2 per cent levy on commodity production. They imposed the resource tax. They imposed the disease levy, the inspection levy and the other levies that have been mentioned. In other words, they accelerated and exacerbated the serious decline in Irish agriculture. In the words of the former Minister for Agriculture, Deputy MacSharry, Irish farmers were £600 million worse off when Fianna Fáil left office in June 1981 than they were in 1978. This massive decline and downward trend in Irish agriculture took place during the three years of the last Fianna Fáil Government. That was the position which the Minister for Agriculture, his Ministers of State and the present Government inherited in June 1981.

Immediate measures were quickly taken and other measures are in train to alleviate the serious crisis in agriculture — the abolition of resource tax, the introduction of the 5 per cent EEC interest subsidy for 22,000 development farmers, the introduction of the 5 per cent national interest subsidy for a further 70,000 farmers, the provision of an additional £72.5 million by way of Supplementary Estimates and the imminent introduction of special measures to help those farmers who have found themselves with serious repayment problems. A fair deal must be concluded with the banks and with the lending agencies. I believe our lending institutions must not be allowed to act as undertakers for our farmers.

I would like to congratulate the Taoiseach, the Minister for Foreign Affairs and the Minister for Agriculture for the fight they are putting up on behalf of this country in Brussels to secure the national interest, to prevent any erosion in the common agricultural policy, to prevent EEC budget cuts as far as agriculture is concerned, and to prevent the imposition of super levies on production. I believe also that much more can and must be done in this country and in conjunction with the EEC in the vital area of arterial drainage so that we can bring millions of acres of land back into production.

In my own constituency of East Limerick, which is generally regarded as a fertile county, 160,000 acres of potentially good land in the catchment area of the River Mulcaire are ravaged by floods annually. I would like to ask the Minister of State to use his good offices with the Government to ensure that the design, planning and commitment of the drainage of the River Mulcaire is treated as a matter of special priority and of special concern to the Government. This is important productive investment and would guarantee an additional £20 million to the Limerick region, plus the creation of 5,000 extra jobs in agriculture and the spin-off industries. Much has been done in the past number of months. This is only the first stage. We all hope that the demands in Brussels of the Minister for Agriculture and the Government in regard to special measures for this country, will be successful.

I take this opportunity to join with other Senators in warmly supporting and welcoming this motion and I congratulate the Minister for Agriculture, and his Ministers of State, for the work they are doing for Irish farmers. Tá súil agam go n-éireoidh go geal leo sna blianta atá romhainn.

Minister of State at the Department of Agriculture (Mr. Nealon)

I have had the opportunity of listening to this debate in its entirety with the exception of the opening speech by the Minister for Agriculture, and of course I had the opportunity of reading it. I must thank the House for the very high level and comprehensive and constructive nature of the debate. Earlier this evening Senator Whitaker said that the putting down of the motion might not be unrelated to jousting for political advantage. Be that as it may, as far as the debate is concerned, one outstanding feature was the non-political nature and the excellent constructive ideas put forward with a view to benefitting agriculture as a whole. That is the way it should be with an industry of such fundamental importance to the farmers themselves, to the agri-business and to the entire economy, as Senator Bolger said earlier.

In opening the discussion, the Minister for Agriculture made it clear that the Government were not attempting in any way to minimise the difficulties confronting the farmers in recent times. He gave a very thorough and forthright analysis of the underlying causes of the difficulties. He told of the steps the Government had already taken to alleviate the position. He explained the problems about adopting other measures which were being suggested and which, on the surface at least, would appear to provide immediate solutions to difficulties which had been building up over a number of years. He then went on to outline further efforts which he would be making, particularly in the coming months in the EEC context, to obtain a further amelioration of the problem.

I would like to deal with the various points raised during the debate. Some Members dealt with the farm modernisation scheme, with western drainage and the western package. The last two areas are particularly my own areas of responsibility. Senator T. Hussey mentioned reductions in 1981 of £1 million in western drainage and £5 million in the western package. We did not have the final outturn when Senator T. Hussey was speaking, but it shows that £1 million was not withdrawn from the western drainage but more money was spent than had originally been provided. The reason for the withdrawal of £5 million from the western package was simply that there was a very slow start to the scheme because there were a number of difficulties there on two fronts which have now been remedied and we will be able to get going full steam ahead with this scheme.

In regard to payment for the targets for western drainage, I am pleased to be able to tell the House that so far 9,000 farmers have completed drainage schemes, covering 50,000 hectares and have received grants totalling £17 million. Approvals have been issued for a further 10,000 schemes representing 54,000 hectares. This means that the initial five year target of 100,000 hectares has been reached within three years. I was therefore extremely pleased that we were able to obtain in July last the agreement of the EEC Council of Ministers to provide funds to drain a further 50,000 hectares. Therefore to have increased the area of productive land in wealth by 150,000 hectares, with a consequent boost to farm income and output, will represent a very significant achievement.

Western drainage, as you know, can actually transform areas. It is something in particular that I like to be involved in and to push as far as I can, because you can see the results on the ground very quickly. You can have all sorts of magnificent schemes that have to wait years and years, but on drainage you can see the results on the ground very quickly. I accept points made by several Senators from both sides that there are problems in the western drainage scheme. I am having those looked at. I do not think that they are insurmountable and, if something can be done about them, it will. That is one of the major schemes for improving the situation in the west.

The western package when fully under way will improve the living conditions of farmers in the rural community in the west by improving a lot of the infrastructural facilities and, indeed, the land in the area. Towards this end a total of about £300 million, with roughly half of it provided by the EEC and the other half from the home Exchequer, will be injected into the region. That is over ten years. One point that does worry me is the fact that it is over ten years and the erosion that will be caused by inflation over that period. So my ambition, in fact, will be to spend it in a much shorter period than that suggested — ten years — because, of course, what you can do now will be double what you can do in four or five years' time. That is, of course, not withstanding the fact that over the next four years, inflation will not be continuing at the rate it has been.

On the farm modernisation scheme, there was a suggestion by Senator Ferris that only the development farmers, who constitute about 20 per cent of all farmers, benefit under this scheme. In fact, the number of farmers benefiting under this is in excess of 100,000, or approximately 83 per cent of all farmers. Of this total of 100,000 23 per cent can be classified as "development"; 60 per cent as "other high," who enjoy largely the same level as development farmers; 12 per cent as "other low"; and 5 per cent. Of course, there is a constant movement from "other high" into "development farmer."

Another point raised by Senator Ferris, which worried me a little, concerned the lack of privacy at local SDS offices and which may have been a factor in the relatively low number of applications coming forward for the EEC 5 per cent interest subsidy scheme. I had this matter looked at and I understand that, generally speaking, official business can be conducted in a satisfactory manner. However, it is something we will keep in mind on an on-going basis, not only for this particular type of business but for all types of business. However, at the moment a farmer who so wishes he can now send his application direct to the Department of Agriculture at Agriculture House together with a bank statement regarding to his outstanding loan. If he wishes, he can have his application processed in this fashion.

A more significant factor in the relative slowness of applications under the scheme for the 5 per cent interest alleviation could be that some farmers may prefer to wait the announcement of the details of the rescue package currently under discussion with the lending institutions before taking any action. When I say "currently under discussion" I mean right now and that is the reason the Minister for Agriculture is not here to reply to the debate.

Senator O'Toole expressed his satisfaction with the level of grants for slatted houses for cattle. For development farmers in the western region and for participants in the western development programme slatted houses and other structures attract the highest weight of grant aid available for building work under the farm modernisation scheme. It is, broadly speaking, 35 per cent.

Senator Leonard and Senator Tom Hussey suggested that the 12 western counties should be treated as severely handicapped areas. In this connection I should like to tell the House that a further national review of the disadvantaged areas throughout the country is being undertaken by the Department to see what improvements might be possible within the terms of the relative EEC directive. There are special staff assigned to this at the moment and indeed, I myself, have visited several areas in this connection in the last few weeks. The review will include consideration of what further parts of the disadvantaged areas could be classified as more severely handicapped.

Senator Walsh and other Senators referred to the anomalies that arose from the exclusive use of the DEDs for the purpose of the designation of disadvantaged areas. This system was used because it was the lowest division for which the relative figures were available. In our election programme we said that, so far as possible, in bringing new areas into the disadvantaged areas, we would depart from the DED as the sole criterion. In the reclassification within the disadvantaged areas from less severely to more severely handicapped areas, we must also, in view of that promise, depart from the DED as the sole criterion.

Senator Hussey advocated the introduction of a subsidy to help lower the input costs for farmers for the two main input items, fertilisers and feedingstuffs, which between them account for close on £500 million annually. Apart from the fact that the Exchequer funds will not be available on the scale needed to finance such a scheme, there is the requirement to get prior approval from Brussels for such national aids. The firm opinion is that such approval would not be forthcoming at the moment. I might mention that there is a two-year subsidy of £2.63 per ton on ground limestone currently in operation, while aid for the purchase of lime and fertilisers is included also in the land improvement schemes and the farm modernisation scheme and the western package.

Senator O'Toole mentioned the desirability of having the sheep headage payments dealt with as a matter of urgency. I am glad to be able to say that by the end of December last 14,200 applicants, or almost 80 per cent out of a total of 18,000, were paid a total of £6 million in 1981. To the maximum possible extent, the remainder that is, all except those with which difficulty is arising — will be paid, during the present month. This is a very credible performance. However, I hope I do not see Senator O'Toole claiming credit for it in The Western People, The Connacht Telegraph or The Mayo News next week.

Senator Leonard referred to the farm retirement scheme as a failure and called for it to be restructured, and Senator Bruton advocated the leasing of land. I would agree with Senator Leonard to the extent that the retirement scheme has not been as successful as anticipated. There is no doubt about that. There is no use in camouflaging the fact. However, it was not envisaged in 1974, when the scheme was launched, that the soaring land prices and inflation would so soon work their way against its operation. In the meantime some 25,000 acres have been made available for transfer to younger and more energetic users of the land. The scheme continues to attract a small flow of applications, and inquiries have been increasing in the past 18 months or so. The relevant EEC directive has been discussed in Brussels in the past few years with a view to its revision, although there is no great enthusiasm at this stage on the part of the other member states. From our viewpoint changes which would allow us to improve the existing scheme would be welcome and we will continue to fight and to press for these.

As far as the leasing of land is concerned, I agree with Senator Bruton that we must do everything possible to encourage landowners to consider leasing as an alternative to seasonal or annual letting. I am sure, however, that Senators realise that the leasing of land, which is not practised here at present, cannot readily be made a feature of our land tenure system. We can only encourage farmers to adopt this practice. In this connection the Minister has already indicated elsewhere that leasing will be facilitated by the repeal of any inhibiting legislation and by the preparation of a form of guidelines to help lessors and lessees. This general provision is something which would be appropriate to the Land Bill which the Minister intends to introduce as soon as possible.

Senator Naughton referred to sheep numbers. The numbers increased by 2.6 per cent last year and slaughterings were at a very high level at that time.

In order to counteract the live export of cattle there is a need for a refund in respect of carcases. The problem arises more with processed beef or deboned beef but the Minister is applying himself to it. I am concerned also about the breakdown in herds. Several people mentioned the hardship fund. This is something that is worrying all of us and I am optimistic that there will be an improvement in the hardship fund before very long.

Senator Walsh mentioned the restriction of 60 cows and 40 cows as far as various aids are concerned. This is an EEC regulation. He also mentioned the need for extra funds for the CBF. But if you read in detail the Estimates published today you will find there is a very substantial increase in funding provided it is matched by funds from the industry itself. Senator Fallon and Senator Howard mentioned the CAP. We can rely on our Minister for Foreign Affairs and the Minister for Agriculture — and the Minister for Agriculture of any government — to defend to the last our vital interests tied up with CAP.

Senator Whitaker also spoke about high domestic inflation, and that is the core of the problem. Until we conquer that, any advantages we can get, no matter how successful in Brussels or from the Exchequer at home for farmers, would be very quickly eroded. That is the prime problem as far as farmers are concerned.

Senator Walsh also spoke about disadvantaged areas which I have already dealt with but the headage we are speaking about is not intended as an incentive and cannot be treated as such, although it can, in various ways, be used as an incentive. Originally it came from Brussels, not as an incentive, but as an income supplement to farmers who were very badly affected. I am running out of time. Is it at 8.30 that we finish?

An Leas-Chathaoirleach

The Chair is reluctant to interrupt the Minister but would like to get some guidance as to what is going to happen, because 8.30 p.m. is the normal time for the House to adjourn.

Mr. Manning

Perhaps if the House is agreeable we could allow the Minister to conclude.

Senators

Agreed.

Mr. Nealon

It is encouraging to note that the decline in farm incomes, which was a feature of 1979 and 1980, has at least been arrested in 1981. Infrastructurally our agricultural industry is sound as a result of the very high level of investment that has been made in the past under the farm modernisation and other schemes. The difficulty facing it is of course very serious and it will take time to recover fully. That recovery can be achieved through measures such as those already introduced by the Government, a worthwhile prices increase from Brussels which we are currently fighting for and increased output and efficiency. My responsibility for farming, as mentioned by several Senators, is in the western area. There are exciting possibilities there and great advances can be made. I regard this as a non-political matter. A lot of the structure was negotiated by our predecessors in government and by the former Minister for Agriculture. I see my task now as putting those into operation and introducing improvements, as suggested by some of the Senators, where they are needed.

Over the past ten minutes or so, since I started speaking, I could possibly have been making history. I am not talking about anything intrinsic in my speech, but without having looked up the records, I am possibly in the history of the State the first Dáil Deputy to make his maiden speech to the Houses of the Oireachtas in the Seanad. I thank the House for the honour of its attention and I recommend for the support of the House the motion put forward in the Government's name.

Question: "That the words proposed to be deleted stand."

The Seanad divided: Tá, 26; Níl, 15.

Tá

Blennerhassett, John.
Bolger, Deirdre.
Bruton, Richard J.
Bulbulia, Katherine.
Burke, Ulick.
Butler, Pierce.
Byrne, Toddie.
Conway, Timothy.
Dooge, James.
Dunne, Patrick.
Fausset, Robert.
Harte, John.
Higgins, James.
Howard, Michael.
Kearney, Miriam.
Kennedy, Patrick.
Magner, Patrick.
Manning, Maurice.
Naughton, Liam.
O'Connell, Maurice.
O'Leary, Seán A.
O'Mahony, Flor.
Quinn, Ruairí.
Reynolds, Pat Joe.
Robinson, Mary.
Staunton, Myles.

Níl

Cogan, Barry.
Cranitch, Micheál.
Dolan, Séamus.
Fallon, Seán.
Fitzgerald, Tom.
Hanafin, Des.
Hillery, Brian.
Honan, Tras.
Hussey, Thomas.
Kiely, Dan.
Mullooly, Brian.
O'Toole, Martin J.
Ryan, Eoin.
Ryan, William.
Walsh, Joe

Tellers: Tá, Senators Manning and Harte; Níl, Senators W. Ryan and Cranitch.

Question declared carried.

Amendment declared lost.

Motion agreed to.

The Seanad adjourned at 8.45 p.m. until 10.30 a.m. on Thursday, 21 January 1981.

Seanad Éireann debate - Wednesday, 20 Jan 1982