Land Bill, 1984: Second Stage (Resumed).

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

Mr. Smith

During my contribution to this Bill before the Easter recess I had not concluded my remarks. Down through the years many people involved in farming and in the agri-business generally have been concerned about the amount of land that is under-utilised and have considered ways and means of achieving greater land mobility. Consideration has been given from time to time to the question of how much of this under-utilised land could be put into the possession of younger and better-trained farmers in the future. These are the sort of considerations that have resulted in this Bill being before us, a Bill which deals with removing the legal obstacles to longer-term land leasing while providing safeguards both for the lessor and the lessee.

Because of the traditional and dominant attachment to land in Ireland, leasing has some obvious and very important advantages. It allows for a situation of continued freehold ownership and it provides for longer-term planning and development at relatively low cost. In addition, it would allow the lessee to use for development purposes capital which he might otherwise be obliged to use in purchasing land. It would provide also for reliable and reasonable secure income for the owner of the land.

It is estimated that there may be as much as 3,500,000 acres of land which would fall into the general category of being under-utilised. It is estimated also that close to 1 million acres of land is let each year and that about one-third of this is rented to the same farmers during a period of five years. This must be the target if any land leasing policy is to be successful. If the policy is to succeed, land that is being rented now should be the target from the outset. It is vital that the effort to encourage leasing succeeds. That is why we on this side of the House are prepared generally to support the Bill but as I indicated on the last occasion we are disappointed in that the Bill lacks the kind of teeth we had been expecting the Minister to include in it.

While the Bill removes the legal obstacles and provides for certain safeguards, it does not provide financial back-up or incentives to people who might intend becoming involved in this business. Neither does the Bill address the question of the tax disincentives that are inherent in our income tax code and which will continue to act as a barrier to any significant progress in land leasing.

I am not blaming the Minister of State for this situation. Most of the statements he has made up to now covered a far wider ambit than is covered by this Bill. Obviously, therefore, he has been unable to convince his colleagues of the necessity to provide in this legislation the incentives that would ensure its eventual success. If we are to proceed on the basis of the Bill before us, I regret to say that the much-lauded, highly-publicised and very considerable propaganda that has been thrown about in the past 12 months will not yield the kind of results that most of us wish for.

The fact that so much of our land is under-utilised and that we have such a unique dependence on agriculture make it imperative that all our land is utilised to the full. We should be glad to support measures that would provide the incentives to make this possible in the future.

The original farm retirement scheme was availed of by fewer than 700 farmers. In other words, it was an abject failure. However, the lessons that should have been learned from that failure have not been learned or at least have not been taken into account in the preparation of this Bill. The scheme failed because farmers were afraid of losing the old age pension and ancillary benefits that can be enjoyed in the context of the existing farm retirement scheme. To all intents and purposes the old age pension is index linked. It may be very difficult to provide for a scheme that will incorporate all the various safeguards but in the interest of the success of a land-leasing policy it is fundamental that some cognisance be taken of the anomalies in the tax and social welfare codes which act as disincentives to retirement. We are all at one in wishing these measures success. There would be a fair share of agreement right across the political scene and in the media as well as among people in the co-operative movement and in the farming organisations for any measures taken to encourage farmers to retire. Without the back-up and the necessary incentives, all the initial impetus will be lost. That is now the general feeling.

It is a rare occasion to have before either House legislation dealing with land. It is vital that on this occasion we do our best to take measures to break the traditional attachment to land and to remove the obstacles which up to now have reduced the contribution of our natural resources to the national cake. Perhaps we do not appreciate the momentum and activity on our farms which would be possible if we had better trained and better educated farmers and low interest rates. It might not be feasible to incorporate such developments in a Land Bill but we should try to ensure that all the related aspects are tied up in a way which would make for some progress in the future.

With regard to leasing there are one or two matters to which I would like the Minister to refer. These matters have been put at various meetings around the country because while land leasing may be presented as the panacea for all land mobility ills, most of us are realistic enough to know that it can only operate where an existing unit is operating at its limits and where there is adjacent land available which can be operated as a total unit. To suggest that land leasing will solve the problem of landless young people who want to go into farming is to totally exaggerate its import on the land scene.

Of the farmers who are in financial difficulties at present, it is estimated that over 20 per cent purchased land. Therefore, a very considerable number of farmers who did not actually purchase land are in serious financial difficulty. How then could a young person go into farming when he would have to provide the capital to lease and to develop the land, to purchase the stock, to meet his repayments and to have some sort of a reasonable standard of living? A cursory glance at that situation will indicate that that is not on, that it is another and a wider question. Land leasing will work only if there is a fully committed operation and if land becomes available adjacent to that farm which can be harnessed to the total development. Will lending institutions regard land which is leased in that way as security for additional capital that would be required by a farmer to purchase additional stock or even retain stock which he would otherwise be disposing of?

When a seven-year term lease expires it may not be possible for the lessee to renew the lease. How will he be affected in relation to income tax laws when, at the end of his lease, he may have to dispose of his additional stock, may not have the land available to him although he would be anxious to continue farming? The owner will also want to know what his position is at that time. There are other questions relating to all this with which I am not going to bore the House. It is understandable that we want to think this whole scheme through, look at the final position in circumstances like that and to remove the kind of fears which people, unquestionably, will have. We will not succeed in getting this scheme off the ground unless we attempt to do that in a fairly detailed way.

We have to have a simplified way of determining a fair rent and there must be provision for a review of these rents. The Bill must be able to give adequate security of tenure for the duration of the lease and reach agreement on the improvements that can be undertaken. We must also have agreed compensation for the improvements on the expiry of the lease where these improvements have enhanced the value of the holdings, and there must be an agreed system of arbitration to deal effectively with any disputes that arise. One can envisage situations where arguments can arise in all these areas and it is important that we have them fully teased out with all interested organisations, the co-ops and others who are involved. I am glad that there is a fairly keen interest in this but it is vital that these questions are dealt with in a detailed way and that we do not have the kind of scramble that could emerge in a few years if we do not properly tease out the difficulties that could arise between the lessor and lessee.

The immediate target is the land under the 11 months system. Many of the farmers who operate this system and who rent their land are happy enough with the situation. Many of them qualify for reduced old age pensions and have other benefits. We have to encourage these people to look positively at the question of longer-term leasing. We have to remove the fears, justified or otherwise, which they have in relation to these lands. In my earlier contribution I referred to the number of farmers who do not have any direct heirs but I subsequently learned that even many farmers who have no direct heirs considered leaving their land or possessions to some individual. They have already considered what they might do with this land in a few years or a year from now. If they have matters like that to consider it is difficult to see how, in the intervening period, they can be encouraged to release this land and make it available for land leasing. They will be afraid also of the impact that it can have on their old age pensions in relation to income tax or other difficulties that they might encounter. All these barriers have to be overcome by the lessee who might prefer to purchase land. If he has any available capital he might prefer to purchase outright. For him the attachment, the need, the want to own the land outright is paramount. He has to be encouraged to consider land leasing and to use the money which he would normally require to purchase the land to increase his stock and to develop the land available to him.

For all of these reasons we will need an attractive scheme, backed up by the Government, by ACOT and the co-operatives, before any real impact will be made in this vital area. The Minister has taken the first step, but it is a pity that he could not get agreement from his colleagues to introduce a more wide-ranging Land Bill which would tackle the land question in a more meaningful way. We would have been very happy to support measures to eliminate speculation in land purchase, to limit the area of land which any farmer can own, and to support group purchase of land by smaller farmers. A start has been made in this area and the Minister and the Land Commission are to be congratulated.

For this scheme to be more effective we need to have available to farmers, and particularly farmers in the smaller and medium sized range, funds at lower and static interest rates. We would have been happy to support a Bill which extended and revamped the EEC farm retirement scheme. We would be especially interested in supporting a Bill which would help to extend that scheme to family transfers. In the main we are disappointed with this Bill. It is a first step but it could well be a damp squib unless the kind of inbuilt incentives we have referred to are introduced. I was glad to hear one Senator from the Government side supporting this view. All those involved in this area are genuinely interested in trying to ensure that the measures taken now will make available the many acres of land that are under-utilised today. For that reason the Minister will have the support of the Fianna Fáil Party. We will be bringing forward amendments and new sections on the Committee Stage.

Mr. Ferris

I want to thank the Minister for initiating the first piece of legislation on land tenure. It is high time that some positive action was taken to try to remove some of the anomalies in the land tenure system. In dealing with land we should talk about the importance of proper land use. I hope that when this Bill becomes law and its terms become operative a hard look will be taken by those leasing land at what the legislators see as the proper use of one of our greatest natural resources.

The attainment of optimum growth in agriculture depends on the land being effectively utilised. In practice, however, for a variety of reasons much of our land is under-utilised to a very significant degree. The land tenure system to which this Bill addresses itself, farm size, fragmentation of holdings, part-time farmers who make a very significant contribution, scarcity of capital, the age of people when they take on management of farms and their level of education, their retirement age, the demographic structure of land and the effect of the policies of Governments from time to time are some of the many factors which have contributed to the under-utilisation of land.

The extent of this under-utilisation is very difficult to quantify with complete accuracy. One measurement of it is the size of the gap between the numbers of livestock carried on our lands at present and the potential in grazing, in particular if the land were properly and effectively fertilised. Research has been done in this area by An Foras Talúntais. We have seen from their research that, with a moderate rate of nitrogen use, we could be carrying an extra 2½ million to 3 million livestock units, which would be about 50 per cent more than the 1981 figures. The pattern of the land tenure system has had a major impact on the level of land use. Over 90 per cent of agricultural land in Ireland is owner-occupied and the balance is largely operated on the 11 months or conacre system to which this Bill addresses itself. Therefore, ownership of the land and its working go hand in hand on most Irish farms. As a result, much farm land is retained by older farmers who are not in need of substantial incomes or who may be unable to work the land to produce a higher income.

A further proportion of farm land is held by farmers with a low level of farming skills who have little motivation to expand further output. Studies have shown that land held by people who have passed what is termed the expansionist phase in the evolution of the family cycle is not likely to be used efficiently. All of these under-utilised lands are likely to yield something less than their full potential. They can be properly utilised if they are channelled into the hands of younger and better qualified farmers with an incentive to generate better incomes for their families. This sort of movement is not likely to occur quickly unless something is done in this whole area of land movement. This Bill addresses itself to the initial stages in that process.

The system we are trying to change here today is a very rigid one when compared with any of our EEC partners. The use of land in Ireland passes to new management mainly through the transfer of ownership. About 3½ per cent of our land changes in this way, and less than 1 per cent changes in open market transactions. The age at which management control passes is normally quite advanced in Ireland. The age profile of farmers who relinquished control during their lifetime was 23 per cent under the age of 65, 46 per cent between the ages of 65 and 74 and only 31 per cent between 75 years and older. Macra na Feirme have done a lot of research into this. If those figures can stand up to critical analysis, it is quite obvious that people relinquish land when they are too old. In this Bill we want to reassure people who own land that by leasing it they do not give up the rights of ownership. Many of us know that ownership of land is dear to the people of Ireland. People are very slow to give up ownership. Because of that we have had stagnation in the movement of land into the hands of younger and more qualified people whether they are farmers' sons or landless people. They should all be entitled to have access to land particularly in these times of high unemployment in rural areas. The level of education required it a matter I hold dear to my heart.

It is important that we are seen to be actively involved in this area of providing a proper educational standard for young farmers. ACOT and the Youth Employment Agency which is helping to fund them, are to be complimented in this regard. The green certificate in farming assists the transfer of land without the payment of stamp duty. It also ensures that those in the categories who may require land in the future, whether by purchase or leasing, have a proper level of competence.

The Labour Party recognise the important and urgent role land restructuring has to play in our economic survival. If we do not have a proper land policy structure linked to a food processing and marketing expertise there can be no question of considering increasing production. Without one it is not possible to have the other. It is important that we should address ourselves to those matters. When looking at these priority areas we must take account of the fact that 60 per cent of grassland, about 6 million acres, is under-utilised. That is due in large measure to the fact that many landowners are either unable or, in some cases, unwilling to farm. That is a tragedy. Any lack of incentive or inbuilt fear that ownership might be forfeited by land-leasing should be dispelled by the provisions in the Bill under discussion. If we can get enough of that land into effective production through this process we will have served a useful purpose in our efforts to improve the economy, particularly in rural areas.

I agree with Senator Smith who said that the farm modernisation scheme was a failure. It has been a total and abject failure. Those who availed of its provisions have many sorry memories of their participation in it. Had they waited they would have found that the social welfare system was of greater benefit to them than the farm retirement scheme.

I recognise that many other factors contributed to the dismal performance in this area. Without indulging in an overall analysis I can say that there has been for many years a lack of political determination to face up to this problem. There has also been a lack of a comprehensive and practical plan to overcome the primary causes of failure. That indifference, combined with the lack of imagination in developing schemes, has meant that one of our greatest natural resources has become stagnant, particularly when compared to other member states such as Holland and Denmark where land is very precious. Without adequate land and marketing policies we cannot properly control production on the farm. Daily we preach to farmers that they should increase production but we are expressing that view to people who are unable to do so because they do not have the means. For years it has been recognised that the system of land tenure adopted early in this century to strengthen the security of tenure for tenants after the land war remains a central obstacle to the full development of the agricultural industry. Before this Bill was introduced there was no evidence of any political determination to tackle the problem. There was little imagination either and few proposals were introduced.

It must be remembered that we have a powerful authority here in the form of the Land Commission. Established in the thirties it was given considerable and significant constitutional powers to control, acquire and distribute land. Admittedly it has been subjected to a lot of criticism about its distribution policy. I support some of that criticism but my party will not commit the Land Commission to being a scapegoat or a whipping-boy. We will not agree to any legislation to remove the power the land commissioners have to acquire land. If that is done we will be taking a step backwards. Many people have been inclined to blame that authority for any failures that may have occurred in the last 20 years but some of those criticisms are misplaced because they are addressed to the symptoms and not the cause of the failure in regard to land policy. The blame for that serious national failure in regard to land policy rests with successive Governments of whatever combination. It does not rest with the authority which was established to implement Government policy. It is not the duty of that body to initiate policy; that is the job of legislators. It is our job to outline what we feel the Land Commission should be doing. We should not be using that body as a scapegoat because of lack of political initiative in the past.

One of our principles in regard to land is to engage the maximum number of families in efficient agricultural production on viable farm units in order to maximise the contribution the land can make to the greatest number of people. We must ensure the development and creation of viable farm units for farm families as opposed to the drift to large factory-type farms which has been taking place in recent years. That objective is in line with what was agreed with many of our colleagues in Europe in the reforming of the CAP. In fact, it forms part of a common manifesto. I believe we would get a lot of support from our European partners in assisting people in the acquisition of land.

To implement any system of land acquisition and distribution we must ensure that there is priority access to farmers, farm families and others. Owners of small or medium-sized farms who have the expertise can turn them into viable units. Individuals who receive the proper training in farming but do not possess land and do not have any alternative source of income — I include farm workers in that category, those who have been trained, are experienced in farming and wish to pursue a career in full-time farming — could be assisted by the Land Commission. It may be necessary to introduce amendments to the acquisition powers of the Land Commission to benefit landless people but if the Minister decides to do that he will get a lot of support here. We would also be prepared to introduce deterrents to prevent ownership of land by individuals who derive most of their income from non-farming interests, in particular professional people. Most of them do not have any direct experience or training in farming. If we are to get the co-operation of farmers we must establish the principle of free sale. That is fundamental to reassuring people. Later we can consider the principle of free purchase, a different ball game, and take into account others who may be speculators, non-nationals or people from outside the Community. Such people may be in a position to write a cheque to acquire a lot of land here, and landless people or the young sons of farmers are not in a position to compete with them. We will not be slow to assist the Minister, with the help of the Opposition, to move along those lines.

I should like to see the role of the Land Commission strengthened. They must be the central authority in land purchase, distribution and in regard to land leasing on a voluntary basis. The farming organisations could help and ACOT have formulated a scheme which applies only where there are agreements between groups of people who want to lease land and the owners of such land. We should not put any obstacle in their way, at the same time not losing sight of the fact that we still have Land Commission control in regard to land acquisition when there is potential movement of land from one person to another. We have a national responsibility to ensure that underutilised land will not be allowed to remain unused or unworked.

A new farm retirement scheme is vital. The present one is not in operation but there are still some people who are tempted by it. Can the Minister say if persons who own land which is subject to voluntary leasing over five or seven years would qualify for payments under the farm retirement scheme? I know of two farms that will possibly change hands because of the provisions of this Bill. We must revamp this scheme and I think there is an EEC commitment to assist us in this matter.

Finance always worries us and I am afraid there is not sufficient commitment properly to fund the Land Commission to enable them to carry out their statutory role. I suggest the possibility of a land finance agency, the concept of which has been used to assist people to own and purchase houses. Lending institutions could make funds available. There could be funds from the EEC, from insurance companies, from the ACC and from other sources to finance such an agency, whose principle would determine the rate of repayments, associated with the level of income that a person could acquire from the land. If it can be done for a house I cannot see any reason why it should not be done in respect of land. The Minister might consider the setting up of a pilot scheme along these lines. I think he would find that the money would become available. That would answer the question put by Senator Smith about the funds that would be available to people under such a scheme.

In the absence of new radical legislation, which I hope will be forthcoming, people cannot either purchase or lease land without money. I am particularly worried about sons of small farmers or of rural workers, forestry and road workers, who would like to lease land. Would it not be better to assist them to lease land and to grow vegetables for sale through assistance from the Government than to be paying them unemployment benefit from a fund to which they have never contributed because they have never been employed?

Land bonds have been discussed frequently by all of us. I totally disagree with the principle of land bonds though they are particularly valuable now because of the rate of inflation. Older land bonds were no incentive to people and they aggravated the problem of acquisition by the Land Commission. The Land Commission should be adequately staffed and funded and their regional structures, with which many of us have associations, should be maintained and developed. They know the people locally. The criticisms that have been levelled at the Land Commission in the past would disappear if the Land Commission were seen actively involved co-operating with people who are negotiating with banks. The Land Commission could also help to bring groups of farmers together. This would make a major contribution to the restructuring of our land and the disappearance of fragmented holdings.

I should like to refer particularly to a group of people who are very concerned about land and land distribution, the Independent Poverty Action Movement, which are being encouraged by the churches. They have few resources available to them apart from church and religious order funds and the universities and research institutes, as well as trade unionists. They have a set of principles to which many of us should aspire. They speak with authority on rural poverty and their aim is to support people suffering from poverty and to develop solidarity among them, to monitor and influence public policy changes in such a way that people who are poor will have their position radically improved, and to increase the level of awareness of the extent and causes of poverty and the political will to tackle it. They highlight particularly the disadvantages of small farmers in regard to access to land and they endeavour to support farm development programmes, farm income and maintenance schemes.

The Oireachtas can make a major contribution to the eradication of these problems. I have attended some public meetings with the Minister and I have heard people talking actively and favourably about the principle of land leasing. This Bill will ensure the right of ownership of land. It will help to do away with the conacre system so that land leased on longer terms than heretofore will be treated properly by those who take it— that it would not be wanting in fertilising, in management, fencing, water or any of the other things so vital to the life of the land. If people know that they will have five years or more in which to do these things on the land they will have some incentive to enter into arrangements with land owners who are unable to work the land themselves. The section in the new Social Welfare Act which will eliminate discrimination against land owners who leased their land is a major step forward. Heretofore, people who had incomes from the letting of land had their incomes and their ownership of the land taken into account and were denied State assistance to which they might otherwise be entitled.

I commend the Bill to the House as a first step. I appreciate the commitment of the Minister of State in regard to land legislation, acquisition, restructuring and redistribution.

I hope that poorer people will benefit because they would make good use of land if they had access to it. All we are trying to do is to have people productively engaged in something that is self-satisfying. They are prepared to work long hours for a small return initially because there is a lot of job satisfaction in working on the land. This Bill can make a major contribution towards the problem that has confronted us for the last 20 years.

An Cathaoirleach

I remind the Senator that we move on to item No. 2 at 6.30 p.m.

Mr. Browne

For many years I have been teaching history to my pupils. We have dealt with Michael Davitt, the Land League, the three F's, the Land Acts of 1870 and 1881 and so on. I always thought those Acts did marvellous work for Ireland in putting the ownership of the land into the hands of the farmers. I never saw the Land Acts as causing problems. I was glad to hear them mentioned because I often feel that the history we teach has no great relevance nowadays. It was good to find that I could go back to my class and mention that the Land Acts of 1870 and 1881 had been mentioned in the Seanad. These Acts did a lot for the ownership of land in Ireland but they also caused problems because we have, it seems, compared with other nations, a hang-up about ownership.

I am glad that this Bill has been brought in. It will help to eliminate any disincentive there may be to land leasing. This Bill deals with land leasing. It is unfair to criticise the Minister or the Bill on the basis that other things have not been tackled. I am quite sure that he will deal with these things later on.

Mention has been made of 3½ million acres of land which is under-utilised. There is a lot of land in Ireland that could be put to better use, because much of it is owned by old people who are not able to farm it and who do not want to give it to anybody else. The whole question of conacre and the 11 month system does not do much good for either the land or the person who is leasing it. It is short-term and not definite and the temptation is there to make as much out of the land in 11 months as is possible.

It is vital that we do more than simply talk about the land being a major creator of wealth for us. It is important that we do something and this Bill will help ensure we make more use of land. There will be problems. One will be getting a positive attitude towards the leasing of land and, in particular, convincing people who own land that they are not in danger of losing it.

There are two groups playing a very important role in this, apart from the Government Departments. Des Maguire has been writing very positively on the importance of land leasing in The Farmers Journal. He has a very important influence where farmers are concerned because his columns are widely read.

The second group are auctioneers who, as an association, have welcomed this Bill but as individuals could, if they wished, put a damper on getting the Bill off the ground. From my contact with them, it appears that they welcome the Bill. Before the Bill was introduced, some of them were encouraging farmers to lease land.

There are certain parts of our country that are technically disadvantaged but officially are not declared as being disadvantaged. Land leasing will be of help there. If I could pass comment on the disadvantaged areas, the whole question of how they are categorised should be brought into play. The idea of low incomes and falling population may be a standard in certain parts of Europe but in the Slieve Margy area where there is a very active committee seeking to have their area classified as disadvantaged, they are caught badly by the fact that there is no fall in population. It is not because farming is advancing but rather that the people are working in either the local industry or in Avonmore Creameries. Houses are being built there and the population is increasing. They are turned down on that criteria alone. It would be much more important to take the poor soil of an area into account. That would affect the Borris area of my own county and the Castlecomer Plateau. These places are disadvantaged from a natural point of view although Europe may not regard them as such. If, in future plans, the Minister could deal with these matters I would welcome the move. Perhaps the leasing of land in that area may help also. I hope it does.

The Land Commission has been mentioned. Since I became a Senator, I have on at least three occasions, approached the Minister on the question of repayments. The Land Commission was purchasing land very dearly and farmers who thought it was very good value found that they were not able to meet the repayments because of either bad harvests or the fact that costs rose beyond what they expected. If the whole question of group purchase schemes can be got off the ground, it will help farmers because they can come together as a group, buy a farm and have it divided by the Land Commission. I do not know if the Land Commission should continue to purchase land.

Another problem the Department will have to tackle is that of fragmentation. In south Carlow it is a problem where there are pieces of land here and there. In Mooncoin in Kilkenny farmers cannot develop their land properly because they have pieces of land scattered around the place and it is not possible to develop it in a productive way. This problem will have to be dealt with seriously.

Debate adjourned.

Seanad Éireann debate - Wednesday, 2 May 1984