I welcome the Minister of State to the House, congratulate him on his appointment and wish him well in his new role.
I welcome this Bill which should give confidence to farmers and those involved in agriculture, whether on the input side or in the processing industry. This underlines the importance of agriculture to the economy. The Agricultural Credit Corporation are a very important element in the agricultural industry established in 1927 and I look to them to give a lead in the development of Irish agriculture.
Over the past five years farmers have experienced tremendous difficulties. I remind the House that this is the fifth year of recession in agriculture. From the corporation's report and the chairman's report to last year's annual meeting, one readily sees that all concerned with the credit corporation interpret correctly the situation in agriculture and understand the problems. Nevertheless, I was taken aback to find the corporation, a semi-State body, going after its pound of flesh in the courts over recent months. This is deplorable. Those in agriculture expect this semi-State organisation, this limb specifically designed to help farmers, to set the pace, as it were, in the agricultural credit area and I was disappointed at their rather harsh attitude. However, I accept that they are the experts in this field.
The importance of agriculture cannot be overstressed. It is also very necessary to recognise the great difficulties in agriculture. Agricultural prices are very carefully fixed each year by the Commission and increases in the main, are always modest. There is absolutely no attempt, either in the Community or at national level, to put any limit or curb on inflation as it affects agriculture. Our inflation is around 16 per cent, compared with our competitors — a little over 4 per cent in Germany and 5.7 per cent in the United Kingdom. It puts the Irish agricultural producer at a very distinct disadvantage. Much of our machinery and, indeed, inputs into agriculture such as manures are imported and no attempt is made to limit the annual increase in the costs of these commodities. In addition, this year we have VAT at point of entry, which puts 30 per cent on to agricultural machinery. This has resulted already in many merchants and agricultural garages having almost empty compounds which heretofore used to be full of farm machinery. If that situation is allowed to continue, the farmer will be ordering farm implements and machinery from a catalogue.
The decline in agriculture is very closely tied in with the loss of jobs. I hope that the Agricultural Credit Corporation will take the lead. As I said, I welcome this provision which shows their determination to provide the necessary finance to re-equip agriculture and set it on an upward trend again. I hope that, since the Oireachtas is providing the corporation with the tool, that is the finance or the facilities necessary to raise the required capital, the corporation will meet the difficulties that farmers are experiencing at present.
It is very necessary that stock numbers be increased, but from experience over the last couple of years this will be a slow process. Unless the credit corporation introduce a new system, at least for short-term stock development loans, and provide capital at not more than 10 per cent fixed interest rates for the specific purpose of increasing stock numbers, it will be difficult to get farmers to develop their industry fast enough. It is not necessary to be an economist to see the very direct relationship between increases in stock numbers and increase in industrial jobs in the agricultural processing industries. This is a pressing problem and one that I hope the Minister will address his mind to as soon as possible.
Also, there is a great need to follow through by creating as many jobs as possible in the value-added area of agricultural processing. The agricultural industry and agribusiness is tied in very closely with job opportunities, especially across rural Ireland. Stock numbers are showing a slow upward trend and I hope that the Minister and the corporation will be able to come up with a very special deal and set the pace for the commercial banks to follow suit in encouraging farmers to take the risk of increasing their stock numbers. Surely, there must be thousands of extra jobs available in the food processing industries, if we had a higher density of stock on the land which at present is lower than a few years ago.
I must refer, in this context, to the scandal of our huge food imports. The Minister for Finance, perhaps wearing a slightly different hat, must deal with the cliques and rings of the supermarket chains to ensure that these do not continue with the present unfair trading and price fixing. This can only be brought about by equipping the farmers to produce and the processing industries to process the produce of the land and compete with food imports.
It is quite extraordinary that while there are a number of plants producing chip potatoes working right across the country — indeed, one not too far from the Minister's own place — yet they find that they are not able to supply semi-State organisations, for instance, the people catering for Aer Lingus and the civil service catering department. These people seem to prefer the imported Belgian chips to the ones produced in the midlands and the price does not seem to be a factor. These rings will have to be broken in the interests of the development and retention of jobs in Irish agriculture. Farmers and market gardeners must be encouraged to produce for the markets both home and export and not blindly continue to try to market what they produce as at present.
The recovery in our economy will only come to fruition if we have a very vibrant agriculture. I hope that the corporation will take this opportunity to give a lead in reviving agriculture. Indeed the Bill gives the corporation the facility to do that. It is necessary to tie in production, processing and marketing, with the corporation providing the finance for individuals, co-ops and companies who are engaged in these areas. The failure of the last administration to implement the interest subsidy scheme — or the rescue package as it was called a year ago——
