Seanad Éireann debate -
Wednesday, 23 Mar 1983

Vol. 100 No. 3

Land Bond Bill, 1983 [Certified Money Bill] : Second Stage.

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

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

The necessity for this short measure arises from the fact that the limit of £105 million on the creation and issue of land bonds, imposed by the Land Bond Act, 1980, has been reached. Legislative authority for the creation of additional bonds is now needed and the proposal is to raise the limit by £25 million to £130 million.

Senators are probably aware that, traditionally, the Land Commission's land settlement programme has been financed primarily by means of land bonds. The bonds are created by the Minister for Finance, subject to the overall limit I have already mentioned. The Minister also fixes the rate of interest in respect of each particular series.

I would like to emphasise that the Bill is purely an enabling one. The immediate purpose is to provide the statutory authority for the Minister for Finance to create sufficient bonds to pay for current commitments in respect of land being acquired. Just because the statutory limit is being raised to £130 million it does not necessarily mean that bonds to that amount will be created.

Successive Ministers have expressed reservations about the use of bonds as a method of payment for lands acquired. Similar sentiments have been expressed by Senators and Deputies down the years. I share those views. However, I must also say that, in practice, it is difficult to conceive of an alternative to the land bond system. To finance the purchase of land by annual cash grant would be to place an enormous annual burden on the Exchequer. Some method of long-term financing is necessary, hence the system as we know it.

In any event, as I stated in the Dáil, I believe that the time has come for the Land Commission's acquisition programme to be drastically curtailed. The market price of land at present is at such a level as to make it very difficult for any farmer to pay it and still make a profit. The result is that the Land Commission are obliged to re-sell acquired land at a great loss and the deficit has to be made good by the Exchequer. This situation is totally unacceptable in a period of financial stringency.

Apart from the financial considerations, I believe that the policy of direct Land Commission involvement in acquisition and redistribution of land has, for other reasons, gone as far as it can and that today's needs can only be met by new concepts and policies. The main need of today is to see that land policy is aimed at creating the conditions under which land is directed towards those who are likely to make most use of it. Several measures to that end are at present under examination all pointing to a more developmental role for the Land Commission than they have had heretofore. They include such measures as the provision of advice and technical assistance to groups of farmers who wish to purchase land themselves, the encouragement of leasing, helping farmers with proposals for land rearrangement and other measures too.

In the meantime, however, additional land bonds are needed to meet current commitments in acquisition; hence this short enabling Bill, which I commend to the House.

Mr. T. Hussey

I should like to congratulate Deputy Connaughton on his appointment as Minister of State and to welcome him to this House. I hope that his tenure of office will be a successful one for all our sakes, and that during his period there he will succeed in bringing innovations into the Land Commission. There is scope there for that kind of work, and I hope that Deputy Connaughtion, as Minister of State responsible for the Land Commission, will tackle the problems with which the commission are confronted and try to eliminate them.

The Land Bond Bill which we are dealing with here this evening is merely an enabling Bill. It is one that has been brought forward by different Ministers at different times in order to raise money for the Land Commission to try to pay for the lands that they are in the process of purchasing, that they have in the pipeline or that they intend to purchase in the very near future.

Even though I am somewhat critical, perhaps, of the land bond system, as many other Deputies and Senators have been, nevertheless I believe that if it were not for land bonds the Land Commission over the years would not be able to work as they have done, they would not be able to acquire the land that they have acquired and the farmers of Ireland would be the sufferers as a result. No Minister for Finance — and particularly in these times of financial stringency — is going to come up with £25 or £30 million to the Land Commission to purchase land for re-distribution at the present time. For that reason it is important that we have land bonds, that the Land Commission can at least operate within certain guidelines and that they can continue to purchase land and redistribute it to the farmers who need it, mainly the small congested farmers. For that reason I think the land bonds are a necessary evil.

The bonds are guaranteed by the State as to payment of interest and ultimate redemption at par but this guarantee does not extend to the day-to-day prices on the Stock Exchange. Owners feel aggrieved when bonds bearing low interest rates have to be sold below par. Indeed, this has happened many times in the past, particularly for the series of earlier bonds that were issued. The interest rates were very low and the people who had to accept those bonds really suffered as a result.

The Minister in his brief did not say what amount of land the £25 million he is seeking will purchase. Is this merely to pay for land that is already in the pipeline or is it land whose purchase the Land Commission had been negotiating over the years? I would like if the Minister in his reply would make that more clear. I think the Land Commission in recent times has been really allowed to rust. The fact that they have not got enough money has meant they have not engaged in the acquisition of land as they did formerly. Some years ago the target for the Land Commission was something in the region of 30,000 acres per annum but I do not think the Land Commission are doing anything like that at the present time.

The origins of the present land policy are to be found in the Land Acts of the last century which established the Land Commission as a rent fixing body and subsequently as the authority charged with effecting the transfer of ownership of land from the landlord to the tenant. The Commission was later entrusted with the task of enlarging and consolidating undersized and fragmented holdings through a programme of acquisition and division of lands. For much of the past half century this work has been its primary concern.

Circumstances have changed in Irish agriculture in recent times, particularly since Ireland's accession to the EEC. The need for change in present land settlement policy is obvious to everybody. The changed condition in the agricultural industry has led to widespread discussions about the effectiveness of existing land policies. Calls have been made for radical new land measures to keep pace with the change in agricultural development generally. The time is now appropriate to formulate new land policies. If agriculture is to make its maximum contribution to the national economy, then new policies must be formulated.

The primary aim of existing land policy as operated by the Land Commission is the enlargement to a viable standard of as many undersized holdings as possible and rearrangement into compact workable units of fragmented plots in the western counties in particular. The Land Commission have not done enough to eliminate this problem of fragmentation, particularly in the western counties. There was scope for them to do a lot more work over the years, and they could have usefully eliminated many fragmented holdings. Particularly when they acquired other estates in an area, they should have paid more attention to the fragmented condition of other holdings in that area and tried to eliminate them as far as possible.

An Cathaoirleach

It was agreed to take No. 8 at 5 p.m. and I ask Senator Hussey to move the adjournment of the debate.

Debate adjourned.