I have a couple of queries on this section. I was interested and encouraged to hear the Minister of State, Deputy Flood, informing the House that he is a small farmer's son. If he had not outlined his experience, I would have commented adversely on the procession of Ministers while we were dealing with this very important legislation. However, I am satisfied that we have a Minister dealing with Committee Stage who understands many of the points raised.
Land Bond Bill, 1991: Committee and Final Stages.
Sections 1 to 6, inclusive, agreed to.
SECTION 7.
Question proposed: "That section 7 stand part of the Bill."
A decent Westmeath man who understands land inside out, I can assure you, Senator.
It is important that we are aware of the significant facts.
Concern has been expressed about the difficulties being experienced by 2,000 landowners who received land from the Land Commission and who are now seriously in arrears with their repayments and a further 4,000 who are in some difficulty. Section 7 provides the power to waive the annuity in respect of a cottage purchased under the Labourers Act, 1936. The Minister indicated that a commission are examining the difficulties of those 6,000 small to medium-sized farmers who are experiencing difficulties in making their repayments. He also made the point that the total involved, where cottages under the Labourers Act, 1936 are concerned, amounted to only £25,000. However the Minister has seen fit to insert section 7 and the power to waive the annuities in respect of those cottages.
Section 7 does not include the power to waive the repayments, or part of the repayments or annuities, of the 6,000 small to medium-sized farmers in difficulty. I believe section 7 is inadequate because it does not contain that provision. Will the Minister consider including a waiver dealing with those small to medium-sized holders who are in difficulty with the repayment of their annuities as well as the cottage owners under the Labourers Act, 1936?
It is important to distinguish between the cottage annuity and the land bond annuity in that the amount of money involved in the cottage annuity is quite limited. We must not lose sight of the fact that when the bonds were redeemed in 1989, they cost £76 million and somebody will have to pay the piper. That money was borrowed and the State is still paying interest on it. At present, we receive £5 million annually in annuities under land bonds and a further £5 million is due in arrears. What Senator Rory Kiely said is significant: some farmers have difficulty meeting those annuities because the land was transferred to them from the Land Commission when interest rates were as high as 18 per cent and the Land Commission had no option but to pass on the price to the farmers. It is understandable that some farmers are experiencing difficulties. However, some of them are making no effort to meet their commitments in terms of land bond annuities and we must take note of that.
As I said, £76 million was borrowed to pay for this land and interest is being paid on it. We must remember that the £5 million being paid annually to the Exchequer is used as part payment on the interest on that £76 million. This is a time of financial constraint; we are looking for money for the Exchequer which can be put into other areas which will encourage economic regeneration.
I welcome the fact that the Minister set up a review group to examine the high level of interest some farmers were forced to pay. That group, unlike the Land Commission, might consider the possibility of rescheduling some annuities.
I wish to respond to the points raised by Senator O'Keeffe. I am not satisfied that £75 to £80 million——
It is a fact of life.
Senator O'Keeffe is attempting to undermine a legitimate request from me by saying that I am putting at risk £75 million to £80 million; I am not. I am referring to the genuine cases of approximately 2,000 people who are in serious difficulty and 4,000 who are in some difficulty. They represent only a tiny fraction of the total number of people involved. It is unfair to represent what I said as asking for a waiver in respect of £80 million. I am not saying that.
I am not saying that either. I am saying that the interest on that sum has to be paid by the State and the £5 million accruing from land bond annuities is used as a part payment against that interest. We cannot walk away from that fact. We will have to borrow that money unless we collect it and we know what borrowing did for us in the past.
Senator Howard, without interruption.
There is a very human problem beneath the surface and I am endeavouring to find some means of easing it. I am talking of genuine cases of severe hardship and we should not let this opportunity pass without inserting a safeguard. The Minister said this is tidying-up legislation. Rather, it is a bureaucratic, administrative approach to an overall problem that ignores the genuine hardship cases we have referred to. If it is considered convenient for administrative reasons to insert a waiver in respect of cottages under the Labourers Act, 1936, I see no reason why we should not make a provision for the small number of farmers who are genuinely suffering hardship. I ask the Minister to consider this matter between now and Report Stage. Senator O'Keeffe's interjection to represent what I said as an attempt to write-off £80 million has not been helpful. I am simply attempting to provide for those 2,000 farmers.
With regard to Senator Howard's case, section 4 of the Land Act, 1984, makes provision for waiving the annuity below a certain threshold. For example, the figure in 1984 was £2 million but by ministerial order the threshold which is now at £10 can be increased. The views of Senator Howard and Senator O'Keeffe, which I accept were genuinely and sincerely put forward, will be brought to the attention of the special committee that is at present in session in the Department of Agriculture and Food.
Question put and agreed to.
Section 8 agreed to.
Title agreed to.
Bill reported without amendment, received for final consideration and passed.
Sitting suspended at 4.55 p.m. and resumed at 6.30 p.m.