Seanad Éireann debate -
Thursday, 9 Dec 1993

Vol. 138 No. 12

Farm Retirement Scheme: Statements.

Minister of State at the Department of Agriculture, Food and Forestry (Mr. Hyland)

I am pleased to have the opportunity of addressing the Seanad on the farm retirement scheme. As Senators probably know, the proposals in this scheme have been approved by the EU Committee for Structural and Rural Development. However, before it can be operated the EU Commission must give its formal approval. I expect this will be forthcoming shortly.

The scheme involves the following: pension payments of up to close on £9,000 per year at current rates for a farm of 24 hectares or more for a maximum of ten years but not beyond the retired farmer's 70th birthday; payment of a pension to farmers between 55 and 66 years who have practised farming as a main occupation for the preceding ten years, who retire from farming for good and transfer their farms by gift, lease or sale to farmers who expand their holdings. Farmers who retired from farming on or after 30 July 1992 and who met the qualifying age limits will be eligible for the scheme; a minimum size of holding of five hectares, which is 12.35 acres, must be transferred to a transferee who must enlarge his or her holding by at least five hectares or 10 per cent of the transferor's holding, whichever is the greater; an upper age limit of 50 years for a farming transferee who should have an agricultural qualification or be otherwise suitably qualified. In certain circumstances transfer of land can also be to non-farmers or the transferor can reassign the land for non-agricultural uses, for example, forestry; payment of the pension where a farm being released has been managed jointly and where a member of the partnership meeting the age or other criteria is not the owner; payment of the pension to the spouse and/or dependants on the death of the pensioner, subject to certain income limits; and there is also a pension scheme for workers — or family helpers — between 55 and 65 years, under certain conditions, who lose their employment as a result of the farmer's early retirement. The rate of pension is £2,196 per year up to 65 years of age subject to a maximum of two workers per holding.

There are some aspects of the scheme which I wish to address further. It is a voluntary scheme which no one is being forced to take up. Each applicant as a transferor will have to ensure that he can comply with the conditions of the scheme. My Department will help by providing information and guidelines on how to complete the application. Applicants will also be free to consult other agencies such as Teagasc, solicitors and accountants; the choice is theirs.

Much has been said about the enlargement provision and perhaps I should elaborate on this because it is one of the main objectives of the scheme. The priority is to have land transferred to younger farmers to increase their viability. Where a person succeeds the transferor as head of the holding and has no land in his or her own right either owned or leased at the time of the transfer then he or she must expand the transferor's holding by five hectares or 10 per cent, whichever is the greater. It is important to remember that this expansion must be in terms of the utilisable agricultural area of the holding.

If, on the other hand, a transferee has a minimum of five hectares of land in his own right which was not transferred to him after 30 July 1992 — the date on which the regulation came into force — he can take over all the released land or five hectares or 10 per cent of the utilisable agricultural area of the released land, whichever is the greater. Splitting of farms after 30 July 1992 to provide land for the proposed transferees to overcome this enlargement provision will not be allowed. In other words, a father could not now give a son five hectares and then transfer the balance of the farm to qualify for a pension because no overall expansion would have taken place.

Where the proposed transferee has no land to start with he may have a problem obtaining land to meet the enlargement requirement; however, since the leasing of land is allowed this, I hope, will help overcome that problem. The scheme offers an attractive pension and not all applicants will have transferees in place so the land released in this way should be generally available to those aspiring transferees who are seeking land to expand. The enlargement provisions apply to farming transferees. However, if such cannot be found, the transferor has the option of transferring to a non-farming transferee who will use the land for non-farming purposes. A further option is to retain the land, again for non-farming purposes.

Another point which should be emphasised is that farmers who are between 55 and 66 years and who cease farming after 30 July 1992 can still avail of the scheme provided they have stopped farming and transferred their land before they reach 66. In the case of farmers who are over this age, if they have a spouse or someone else who is involved in the joint management of the holding, that person can qualify for the pension provided they meet the conditions of the scheme as outlined earlier.

I hope that the scheme will be formally approved by the EU Commission before Christmas. This would enable it to become operational in the New Year. There are still some matters to be clarified in relation to the interpretation of the conditions of the scheme but this should not unduly delay implementation. This scheme, in my view, offers a good incentive to older farmers to pass on land to a younger generation of farmers and will help redress the main structural problems in farming in Ireland, namely, farm size and the age profile of farmers. I believe it will prove of considerable help in improving farming structures and helping younger progressive farmers to expand.

Mr. D'Arcy

We are very disappointed with the statements being made today. We hoped we would at least have had agreement from Brussels and a detailed analysis of the scheme. It is blatantly obvious that, in the absence of this approval and the details, the statements will be very restricted. Unfortunately, this is clear from the Minister's statement. I do not blame the Minister of State for that because I am aware that this is being handled by the Minister, Deputy Walsh.

The announcement of the farm retirement scheme has been promised on many occasions but it is still being delayed. The Minister of State said today he hopes to have it in place before Christmas. I came into this House last February and at that time the Minister said in the Dáil it would be in place by early summer, then we were told it would be made in the late summer. In September it was said that the announcement would be made in the late autumn. Today we hear that it will be made before Christmas. The Minister has played the same trick again. He has announced the scheme every couple of months. He says the scheme will come, when and where it will operate and then says he has second thoughts about it and outlines what he expects will be in the scheme. How long will this go on? As far as I can see, it will be well into next year before a real announcement is made. No announcement can be made until there is agreement with the EU and a detailed scheme is presented to the Houses of the Oireachtas. There are 27,000 people who are eligible for this scheme and they have been waiting patiently for a very long time.

The proposed scheme, once implemented, will have a positive impact in the restructuring of Irish agriculture. The age profile of Irish farmers must change if a viable agricultural industry is to survive into the next century. At present over 40 per cent of farmers are over 55 years of age and only 15 per cent of farmers working the land are under 35 years of age. Those are the figures supplied by the Minister's office.

The retirement scheme will allow this age structure to change through incentives for older farmers to hand over their lands to their sons or daughters or other relatives. The previous attempt at a farm retirement scheme was not successful as the incentives were not attractive enough. The proposed scheme will offer a maximum pension of £9,000 per annum to farmers who retire between the ages of 55 and 66 years.

I welcome the Department of Agriculture's proposal to include the younger spouse as an eligible applicant in cases where the older farmer is over 66 years of age. There is an enormous level of interest in the scheme. The administrative procedures in Ireland must be put in place so that when the scheme is formally ratified in Brussels farmers can make immediate applications. The only available guide to the scheme is the three page document from the Minister's office.

I was delighted to hear the Minister state in his speech that there was much talk about the scheme's expansion requirements, but he did not explain why this should be so. Neither of the previous schemes was successful because there were too many obstacles in the way. The expansion requirement is another obstacle. A farmer with 80 or 90 acres of land whose holding is barely viable will need to purchase a minimum of 10 per cent of the area of his land or 5 hectares, that is, 12.5 acres. In most areas the purchase price of 12.5 acres is in the region of £20,000 or £25,000. That money will not be easy to acquire. He may go to a financial institution and show his accounts. His accounts will clearly state his position and, depending on his milk quota and his level of borrowings, the viability question will immediately come up.

The Minister has stated in a document sent from his Department that the pension will only be paid from the date all the conditions of the scheme for transferor and transferee are met. This expansion requirement is an enormous obstacle to thousands of farmers who would participate in that scheme and who need it very badly in view of the circumstances prevailing.

I was tempted to talk about GATT but I will not do so. I will just say that the present proposals will put thousands of farmers out of business. The effect will not be seen in the first or second year, but in the third year of the scheme thousands of farmers will be in trouble.

The Minister of State is a farmer who has a reasonably clear understanding of the way things stand and he knows the number of farmers who would wish to participate in that scheme. The condition whereby the farm must be expanded by 10 per cent will be a very serious obstacle to thousands of farmers, requiring expenditure of, perhaps, £20,000 to £25,000.

From a reading of the Minister's document of October 1993 is clear that the pension will not be payable until this condition is met. This is very serious. I argued in Brussels and in the other House about the obstacles to the previous schemes because I could see clearly that people could not participate. Because of these obstacles, the schemes failed miserably.

The Minister of State said in his speech that the schemes offer an attractive pension. He said that not all applicants will have transferees to place on the land released under the scheme, and that this land should be generally available to aspiring transferees who are seeking land to expand. It is one thing to say that in a speech, but another to try to put it into practice in thousands of parishes. Land will not be available for people to purchase in order to qualify for the scheme. I ask that this condition be withdrawn from the pension scheme to allow the maximum number of people to qualify. I have given the reasons.

Only 9,000 of our 150,000 farmers own more than 140 acres. The aim of the scheme should be to maximise the number of people who will qualify under the scheme. I see the expansion requirement as an obstacle that will without doubt eliminate thousands of farmers from this scheme, which seems otherwise good, although we have not seen the finer details.

I wish to make a second point which the Minister of State also mentioned in his statement. The pension will only be paid from the date on which all the conditions of the scheme for transferors and transferees are met. There is an additional qualification for the scheme. A farmer must have obtained the "green certificate" or completed at least one year in agricultural college. I accept that, but if the scheme is to be successful, in many cases the farmer concerned will have to bring his son home, maybe from a job in Dublin.

It takes two years for a young farmer to qualify on the educational side and he may have to wait, to purchase the additional land required. This means thousands of farmers will be unable to take advantage of the scheme. If these two conditions prevail, thousands of farmers will be debarred from the scheme.

The Minister will have to reconsider, because the European Union is not in touch with many of these issues. Those in Brussels do not seem to understand the structure of our farms here. The figures are clear. There are many older farmers now farming the land and many young farmers who want to farm it, but they cannot afford to invest money or to borrow. I am making it quite plain that those two conditions are very restrictive and damaging and will have a terrible effect on this scheme. I have no doubt about it.

A system exists in the Department of Social Welfare whereby once the farmer goes to a solicitor and signs over the farm to his son he is automatically eligible for a contributory old age pension if he has paid PRSI for ten years. I cannot see this new scheme working unless similar conditions apply.

If the stipulations I mentioned are left in the scheme, I estimate that 50 per cent of potentially eligible people will be eliminated. One might ask how I arrived at that figure. I asked the local branch of the IFA to give me a rough idea of the eligible people in three or four local parishes. I was brought in to speak to them and when I told them about those conditions everybody immediately saw the problems attached to the scheme.

The first is that the pension will not be payable until all conditions are met and that could take two or three years. What happens to the unfortunate farmer and his wife who are under 65 years and are not eligible for the non-contributory old age pension? The farmer's son may have to return from Cork city, Wexford town or Enniscorthy to take over the farm. One family will have no income until these conditions are all met. It is as simple as that.

The second problem is this expansion by 12.5 acres. I have not the slightest doubt that even in the Minister's own county land costs £2,000 per acre and we are, therefore, talking in terms of £25,000. One would not buy land, unless it is poor quality, for under £2,000 per acre. The way the financial institutions work is that one's accounts must fit their computer model to prove that the farm is viable and making a good profit so that they can get their full interest — adding 1.5 or 2 per cent of what they call a cushion to make sure that they get the payments. They are the criteria which will be used by every financial institution, including the Agricultural Credit Corporation. If one does not fit those criteria the loan will not be given. These two restrictions will inhibit qualification. I estimate that 50 per cent of farmers will not qualify if these two conditions are left in.

I welcome the scheme. I believe that giving ageing farmers a reasonable pension between the ages of 55 and 65 is the only way of encouraging them to transfer the land to their sons. I hope the points I have made will be taken into consideration when the final details are drawn up.

Mr. R. Kiely

I welcome the scheme, as should all farmers. It will encourage farmers of my age and the Minister's age to transfer their farms to their sons. I understand this scheme was part of CAP reform. I listened to Senator D'Arcy, whose approach to this scheme seemed negative. He was also negative on GATT and on CAP. I see no ill effects in this country from the CAP reform, rather the agricultural community has gained. Although it may be political point scoring, we can always find loopholes in any scheme and it is important that they would be highlighted, especially in regard to this scheme.

The 12.5 acres being talked about is a small amount. One must have a farm of a good size to ensure that the person retiring would qualify for the scheme. When it was suggested that we join the EEC many people were sceptical about what would happen rural Ireland. It was obvious that we would have to adapt to European conditions and we must be realistic about doing so. The reality is that if we had not joined we would be a lot worse off today.

This scheme is part of the CAP reform and under EU regulations we may institute a community aid scheme for early retirement for farmers partly financed by the EU. I am glad to see that workers are included in this scheme because some workers might find themselves out of a job before they reach pension age and would have to go on the dole or get some other benefit. I would also like to acknowledge the practicability of young farmers taking over land at an earlier age. It is important that farmers do an agricultural course and qualify for the "green certificate" as it is called. They deserve to implement whatever they have learned as early as possible. This is a scheme that will help them to get into business and own farms, and it will give them the responsibility for which they are educated. Agriculture is one of our main industries and it will remain so despite the efforts to industrialise.

I am glad it is an essential qualification for people to do a course before they can take over the farm and allow those retiring to qualify for a pension. Heretofore, before a farmer could transfer his holding he had to wait until he was 66 years old to qualify for a pension. Otherwise he would be putting a burden on his son to support him and his wife until they reached pension age. That pension was not half as good as that he will get through this farm retirement scheme. A pension of £9,000 is a lot of money for any man retiring. I am sure that it will be index linked over time and it will be welcomed by farmers, especially where there is a good relationship between father and son.

The Minister said that in certain circumstances transfer of land can also be to non-farmers or the transferor can reassign the land for non-agricultural uses, for example forestry. This puzzles me slightly. I would not like to see speculators qualify in this regard. I would like the Minister to indicate who the "non-farmers" might be so that if a transfer of land took place it would not be for speculative purposes.

The farm must be expanded by five hectares or 10 per cent, whichever is the greater. That puzzles me. It was referred to as 12.5 acres. I am not a mathematician; I am more used to acres. I still live in Ireland, not in Europe. Perhaps the Minister would explain that.

Senator D'Arcy also said that the scheme offers an attractive pension and, as not all applicants will have transferees in place, the land released in this way should be made available to those transferees who are seeking land to expand. He mentioned that there were 27,000 people who would qualify for this. I believe, although I am open to correction, that the Senator is exaggerating when he uses that figure. It would not be realistic. He may be quoting figures from the IFA. The IFA held a meeting in Buswell's Hotel last Sunday night which, I heard, was like a mini Fine Gael Árd Fheis. There were standing ovations for former Ministers, so I would not take any notice of what the IFA——

Mr. Naughten

Ministers who were hacked to pieces some years ago by the same body.

Mr. R. Kiely

I would not treat the IFA figures as being above board. I take such figures with a grain of salt.

This is a great scheme which will encourage older farmers to retire earlier and younger farmers to take a greater interest. It is very important, now that we are members of the EU, to have a scheme to encourage young farmers to become more responsible for agriculture, our main industry. I wish the Minister luck with the scheme.

Mr. Naughten

I welcome this debate. I raised this matter in the House three weeks ago and the Minister for Agriculture responded on that occasion.

The points raised by Senator D'Arcy are valid. Many farmers, because of one regulation or another, will be prevented from participating in the scheme. I welcome the principle of the scheme which is excellent. However, as I said three weeks ago, there are certain logjams in the scheme which must be cleared before it is approved by the Commission. I understood the scheme would be cleared by now because the Minister's press release of late October indicated that it would be approved within the following four weeks. Four weeks have passed and it has not been passed by the Commission.

I raised the anomalies in the scheme because it would be a tragedy if it fell into the same trap as the 1973 retirement scheme which did not succeed. A number of other schemes — for example, the calf to beef scheme — introduced from Brussels did not work either because the guidelines did not suit Irish farming.

One of the major difficulties with this scheme is the requirement for additional land. There is a practice in this country of land being let on the 11-month system. The principle of land leasing has not been accepted and that is a stumbling block for the scheme. Unless the Government and the Commission do something to encourage leasing rather than letting, the scheme will fail. Many young farmers will not be able to get the additional land required under the conditions of the scheme. The requirement is a minimum of 5 hectares or 10 per cent of the holding, whichever is greater. In many cases people would be unable to buy or lease the additional land, particularly young farmers taking over a viable holding. There is a contradiction in that a young farmer can take over a viable holding but will have to get additional land before his parents can qualify for the scheme. That roadblock should be removed. If a holding is viable there should be no need for additional land. I believe many farmers will be prevented from participating in the scheme because of that requirement.

Another difficulty is the requirement that farming be the farmer's main occupation for the preceding ten years. In many parts of this country we have part time farmers. If this scheme is to be meaningful we should encourage such farmers to hand land over to the younger generation. All of those who are involved in part-time farming, whether they work with Bord na Móna — as is the case in the Minister's area and in mine — the county council, CIE or other bodies, are prevented from participating in this scheme because of the requirement that they be practising farming as a main occupation for the preceding ten years. That difficulty, like the additionality requirement, must be removed if the scheme is to be of benefit to rural Ireland.

The scheme has much merit provided these difficulties are removed. Now, before it is approved by the Commission, is the time to remove them. Once the scheme is approved it will be very difficult to change it. There is no point in finding out that the scheme is unworkable when it is put into operation.

There is another major difficulty with the scheme, which was referred to by the Minister, Deputy Walsh. The difficulty is the question of social welfare. There is a major conflict involved. I have discussed this with the Department of Social Welfare and the Department of Agriculture and neither Department seems to be able to resolve the conflict that will develop in this scheme. The Minister told the Seanad he was having discussions on the matter with the Minister for Social Welfare and that it was his aim that any farmer who participated in the retirement scheme would automatically on finishing the scheme become eligible for a contributory pension. Many people have paid a contribution under the PRSI scheme for perhaps five years. If they participate in the retirement scheme as it stands now they will lose their eligibility for a contributory pension. It is vital that this difficulty is quickly resolved.

I also anticipate a problem with the requirement that the person to whom the land is transferred have an agricultural qualification. On the one hand, a farmer who takes over land with the intention of farming it must have a qualification in agriculture. On the other hand, if a businessman buys the land for the purpose of planting it there is no requirement for that qualification. That is a contradiction.

That leads us to the question of land policy. We have stumbled along for the last ten to 15 years without a clear land policy. It is of vital importance that there are guidelines to identify clearly what land should be planted for forestry and what land should be retained in agriculture. It is criminal that some of the best agricultural land is being planted simply because when it is put up for sale it is bought by those who get big grants from the EU for the purpose of planting. Land, which is not viable for agricultural production, should have been planted 30, 40 or 50 years ago rather than now. It is criminal to take good land out of agricultural production and put into forestry because once that happens it is no longer used for agricultural production.

We are going through a difficult time with 300,000 people unemployed. If one looks carefully at this scheme, one will see that while the principle should be to get land transferred from the older to the younger generation, instead it is getting people off the land. This is returning to the Mansholt plan of 15 years ago. Where will these people go because there are no jobs for them in industry? People who leave farming must go on the dole.

I come from a county which, according to the last census, lost 5 per cent of its population, the heaviest loss in any county with the exception of County Leitrim. Each day townlands are stripped of their population; the older generation are dying and there is no one taking over the land; people who should be working the land are emigrating to London, Birmingham, Coventry, New York, etc. They are not working in County Roscommon where one would hope to see them.

I have outlined the major difficulties with the scheme. If these restrictions are not removed before the scheme is implemented, it will not have the impact it should have on rural Ireland. If the difficulties highlighted by Senator D'Arcy and myself on this and previous occasions are removed, it will transform rural Ireland. For the first time, there would be an opportunity for younger people to get a sizeable amount of land while, at the same time, their parents or the older generation would be financially protected. The principle of the scheme is a good one if the problems I mentioned are removed. There is an obligation on the Minister and his officials to ensure that those conditions are changed before this scheme is approved by the EU because this is too great an opportunity to miss.

When speaking about this scheme one cannot but refer to the other major problems affecting Irish agriculture, the GATT negotiations. I am concerned at the stand taken by the Government with regard to these negotiations. If the GATT agreement is implemented, as the newspapers and the Commission seem to suggest, it would have a devastating effect on Irish agriculture because it would wipe out 50 per cent of the farming community.

Acting Chairman (Mr. R. Kiely)

We should not discuss the GATT negotiations; we are discussing the farm retirement scheme.

Mr. Naughten

I appreciate that.

Mr. D'Arcy

It is relevant.

Mr. Naughten

If GATT is implemented as envisaged, it will force a large number of farmers off the land. You, Sir, have a close affinity to that section of the community and I know you are concerned about these negotiations.

Acting Chairman

You must confine yourself to the discussion on the farm retirement scheme.

Mr. Naughten

That is the reason I referred to the negotiations.

Acting Chairman

You have referred to them; you should continue to discuss the scheme.

Mr. Naughten

I could not conclude without referring to the major difficulties facing the farming community under GATT. I appeal to the Minister of State, Deputy Hyland, and the Minister, Deputy Walsh, if need be, to apply the veto with regard to the negotiations. You, Sir, I am sure, would not like to see a reduction in the number of dry stock or sheep farmers throughout the country, although those in the dairy industry would probably survive. I appeal to the Minister to ensure that the restrictions relating to additional land, part-time farmers, qualifications and social welfare are sorted out before the farm retirement scheme is approved by the EU. I hope this scheme will help to contribute to the transfer of substantial areas of land to young farmers.

Mr. Townsend

We are discussing this scheme at the wrong time. We should have discussed it a couple of months ago or we should wait until the application forms are issued and the Department has produced a comprehensive booklet on the scheme. While the Department has been unable to produce a booklet about the scheme because it does not know the full details, the IFA has made one available and is claiming credit for organising the scheme. It claims the scheme is the end result of months of negotiations between the IFA, the Department and the European Commission. It is difficult to understand why farmers in County Wexford have not heard about this because the IFA is claiming responsibility for the scheme. It also claims the scheme will be attractive to many farmers between the ages of 55 and 65.

We must remember that the EC Farm Retirement Scheme is an accompanying measure under CAP reform which is governed by EC regulation 2079/92. It has three main objectives. The first is to encourage older farmers to leave farming by providing them with a pension. This is a useful measure. Serious restrictions have been placed in the way of small farmers. If a small farmer wants to transfer his holding to a son or daughter, he must acquire 12.35 acres from outside the holding being transferred through purchase, lease or gift. This is impossible for many small farmers who might avail of the scheme. On the other hand, it will not be a major problem for larger farmers as they will be able to organise themselves efficiently.

The second main objective of the scheme is to replace retiring farmers with younger farmers on large holdings which have better prospects for economic viability. However, this could be a dangerous development because large farmers could buy out the small farmers around them.

The third and main provision of the scheme is that if younger farmers are not available it will be possible to redirect agricultural land for non-agricultural use, such as forestry, agri-tourism and, perhaps, set aside, although this has not yet been decided. It will be possible for the larger farmer to buy out any number of small farmers who want to avail of the scheme and this could be dangerous.

The scheme should be the accompanying measure of the agreed 1992 CAP because it was an example of a missed opportunity for Irish farmers and it may not arise again. We must remember that Mr. MacSharry, the EC Commissioner for Agriculture, was in a unique position to influence the outcome in favour of small farmers in this country, who are in the majority. However, because of unrelenting and consistent pressure from large farmers and vested interests, Mr. MacSharry had to abandon his plan for reform which would help the needy. His every attempt was thwarted. I believe that because of a series of unforeseen circumstances in 1993, such as devaluation, the weather and animal diseases in Europe, the full effects of the reformed CAP are not yet felt and the worst has yet to come.

A large number of small farmers are giving up milk and sheep production to cash in on their quotas and I am advised that at least 40,000 smaller farmers, especially in Leinster, who traditionally buy calves and sell them as stores, and more who buy the stores and fatten them, will be in serious trouble under the revised CAP. The penny has dropped, and in a big way, with the farming organisations. Some of them may now be sorry they were so opposed to Mr. MacSharry's proposals, and they have resorted to blaming the GATT for what is almost certainly the reformed CAP.

We often heard of the man who went to confession and told the priest that he stole a rope. However, he forgot to tell the priest that there was a pig at the end of it. I believe that when the IFA, especially, and others sold the reformed CAP, they forgot to tell the farmers that one of the accompanying measures was the early retirement scheme for farmers. Some of the provisions of the scheme are generous but taken in tandem with the 1992 revision of the CAP, I believe it will lead to large scale rural depopulation.

Mr. Enright

Rarely has such a good opportunity been presented to any Government as the early retirement scheme for farmers. It is an opportunity to benefit the people living in rural Ireland.

Given the level of depopulation taking place across the provinces, it is vital that such an important scheme should be fully utilised. However, regrettably, it creates some problems, especially with regard to the enlargement of holdings, because to qualify a person must already have land in his own name.

The IFA published a document entitled "The IFA Guide to the EC Farm Retirement Scheme" which clearly sets out the amount of land a transferee must have before enlarging. The minimum amount is 10 per cent, or five hectares of the overall holding to be transferred. The problem with this is that many of the transferees may not have any land in their own name. At present it is difficult for farmers to obtain land on a lease and in this instance a lease for a minimum period of five years is required. In view of this, many farmers who own land will be reluctant to lease land to facilitate leasees.

Many farmers of 55 or 60 years of age, who are anxious to transfer their holdings to their son or daughter will find that, because of the regulation requiring the transferee to have a minimum 10 per cent or five hectares in his name, they will not be eligible unless they can obtain land by lease or by purchase. This raises a difficulty.

Under this early retirement scheme it is intended that there will be an enlargement of holdings. This will make farmers more viable. However, to illustrate the seriousness of the position in rural Ireland, I quote the following figures: in the constituency of Laois-Offaly, represented by the Minister, there is a decline of 1.8 per cent in the population of County Laois, or 959 people; in County Longford, the Taoiseach's constituency, the decline is 3.8 per cent, or 1,203 people; in County Louth it is 1.2 per cent and in County Offaly it is 2.3 per cent or 1,387 people. There is a similar decline in County Westmeath.

Mr. R. Kiely

On a point of information, are they all farmers?

Mr. Enright

Tullamore is the only town and Geashill the only village in County Offaly where there has been an increase in population. There has been a big decline in every other town and village in the county.

Mr. R. Kiely

The Senator did not answer my question. Are they all farmers?

Acting Chairman (Mr. Fitzgerald)

Senator Enright without interruption.

Mr. Enright

With the exception of approximately three areas, every townland in County Offaly has had a decline in population. They are not all farmers, but the vast majority of people living in these areas are involved in agriculture and the spin off from agriculture. Farming provides the money which keeps people in these areas.

The population decline in Connaught is alarming. In County Sligo there is a decline of 2.3 per cent, or 1,300 people, in County Roscommon there is a decline of 2,716 and in County Mayo the figure is 4,488, or 3.9 per cent. It is not necessary to give further examples.

The scheme is well advanced, but even at this late stage I believe that if the present position continues where a farmer who owns a farm wishes to transfer it to his son or daughter who has been working with him, and has obtained their Green Certificates and undertaken their minimum of 150 hours with the Teagasc courses, the farmer will then qualify for a non-contributory old age pension. I hope this scheme continues as before. Perhaps the Minister would say if this is within his power and if it is possible to have it amended in this way.

If many farmers in their late fifties or sixties who are anxious to transfer their holdings, could obtain a capital sum, a monthly pension and be able to stay on the family holding, the farm could be worked by their sons or daughters and the haemorrhage of population from rural Ireland would stop. This is a golden opportunity which if taken can reverse this trend.

The scheme as it stands raises a number of questions. The transferee apparently has to practise farming full time. Will someone drawing the small farmers' dole qualify? Will a farmer who up to now has leased land qualify for the retirement scheme? Will a widow who has recently inherited a farm qualify, although she may have only been involved in the home previously? There is currently a five year requirement. Must the transferee's undertaking to practise farming as a main occupation be included as a covenant in the deed of transfer?

There will be means testing for the scheme. How does that affect surviving spouses? How far does the means testing extend? Will it be applied on the death of the transferor? It is important to clarify the position for widows in those circumstances.

The Minister says a farmer cannot transfer part of his holding to qualify for part of the 10 per cent; farmers will not be allowed to transfer one portion now and the rest a few years later. That is another factor which will prevent people qualifying for the scheme. Across Ireland there are 25,000 to 30,000 farmers who should qualify for this scheme. However, as drawn up it may exclude many who should be eligible.

A great deal of work has gone into the scheme. The IFA has put considerable effort into it; an IFA representative in my constituency, Mr. Ivan Sheppard, has been very involved——

Mr. R. Kiely

A member of the Senator's party.

Mr. Enright

——and the Minister and his Department have also put much work into it but unfortunately there have been many delays and the earliest date for its introduction is the beginning of next year. This should be dealt with as a matter of priority. Efforts should be made to remove the minimum requirement because it will exclude many people. That is not desirable. The scheme should encompass as many as possible.

The Minister is a practising politician. Many farmers in his constituency have transferred their farms to sons or daughters. This means the parents living on the farm and those younger people often become progressive farmers. This scheme should be geared towards ensuring that farmers who would normally transfer their farms qualify.

Under the scheme all regulations have to completed, registered and approved by the Department. At present if a farmer transfers his farm and the deed of transfer is signed and lodged in the adjudication office, he qualifies for an old age pension from the date of lodgment. It is important that this continues to be the case. The scheme is excellent but has a major flaw. If that regulation was removed it could stop the haemorrhage from rural Ireland and enable more people to remain on the land. It would then be a magnificent scheme which would give hope and we would be proud to be associated with it in years to come.

Mr. Kelleher

I welcome this scheme. The Minister announced it on several occasions but something which is good is worth announcing often lest we forget about it. Since this scheme is part of the CAP programme, those who should take credit for it are the officials in the Department and the EU Commission.

The idea behind the scheme is excellent because for too long the age profile in farming has not helped us make the agricultural industry more efficient. The enlargement issue may have to be examined but the concept is good because there is no point keeping the size of agricultural holdings the same. We must be realistic. We are engaged in GATT negotiations which will produce a final outcome in the near future. We must realise small farms are inefficient. If we want to stop what Senator Enright called the haemorrhage from rural Ireland, the size of farm holdings must be increased to make it more viable for families to carry on full time farming. That is an important issue and the thrust of the scheme is to enlarge the holdings for this purpose.

In the last number of years many people have left rural Ireland but not because agriculture is not prospering. Young people want to leave rural Ireland to see other parts of the country and of the world. As a young person I know many young people who ultimately have left farms to go to England or America for a number of years. People can produce whatever statistics they like, but that fact must be recognised.

We must await the final outcome and details of the scheme. I am looking forward to it. There is an upbeat mood in the farming community about this scheme and there is a lot of interest in it, which was evident to me from several meetings throughout my constituency. I hope the Minister will advertise it well. One of the main reasons he announced it so often may be that the farmers who qualify for the scheme can take it up in large numbers when it finally comes about.

There is no point in asking the Minister about the intricate details of the scheme. He has already outlined it in his speech and it is there for all of us to see. I suggest he should remove any underlying obstacles that might be attached to it. Other schemes have failed throughout the years because farmers were afraid to transfer and were worried about their future situation.

I have little more to say on the matter, other than to suggest that the scheme should be speedily implemented. It would be a nice present for the early new year. I hope Teagasc and the other bodies involved will have the facilities and the backup to ensure the scheme is fully taken up and that every individual who can qualify for it will avail of it. I welcome the thrust of the Bill and look forward to its implementation.

Minister of State at the Department of Agriculture, Food and Forestry (Mr. Hyland)

I thank Senators for their contributions. I am sure the reservations stated are sincerely held by those who expressed them. We would all prefer a situation where we could devise a scheme without any limitations or restrictions. However, we live in the real world and the early farm retirement scheme is, as the Senators acknowledged, part of the CAP reform. It is one of its accompanying measures and 75 per cent of it is being paid for by the EU. Therefore, it is inevitable that there would be restrictive requirements as far as the Union is concerned. In an ideal world, we would all prefer not to have a CAP or a GATT, but we are members of the enlarged European Union and we have to play our part, bearing in mind that we are considerable net beneficiaries from the Union.

There would be no future for our agriculture or our farmers outside the CAP framework. Our commitment in Government is to secure under the GATT as best we can the benefits we negotiated under the reform of the Common Agricultural Policy. I will not try to analyse these benefits either one way or the other, except that it is important to know what exactly we are talking about in the context of this debate.

If we are to develop the maximum benefits of CAP reform for our country, our agricultural industry and our many farming families, we must also ensure we develop, to the greatest possible extent, all of the accompanying measures, such as the new agri-environmental scheme, which will be announced shortly, the new operational programme for forestry and the early farm retirement scheme. Members have identified, as they perceived it, certain limitations in relation to eligibility. The Government also identified some of these limitations and difficulties in relation to qualification.

The issue of extensification was the item most frequently referred to in this House, where farmers have to increase by 10 per cent the size of the holding taken over. I acknowledge that that can be difficult for some farmers. We expressly went to Brussels to negotiate with Commissioner Steichen on this issue. The original requirement was 20 per cent and we succeeded in negotiating it down to 10 per cent. There is no way he would entertain our request for a total elimination of that requirement. I want the House to understand that we tried hard on this matter because it will present a problem to some farmers. There has to be an element of restructuring. There is no point in asking us to eliminate it. In this debate we were criticised for the delay in bringing the pension scheme to fruition. If there is any reason for a delay — I do not accept there are any avoidable delays — it is because we are endeavouring to get for our farmers, our agricultural industry and the country the best deal under this scheme.

Many Senators raised the question of eligibility for the scheme and of farmers who may have been getting more than 50 per cent of their income outside farming. I understand that argument because many farmers are getting more than 50 per cent of their income in this manner. You come from a part of the country, a Leas-Chathaoirligh, where that would be very much the case. We did succeed in getting what I consider to be a major concession from the Commission in that area. If the farmer did not qualify on the basis of his off-farm income, his wife would be regarded as an eligible applicant if she was living and working on the farm full-time and would qualify under the scheme. That concession is a worthwhile one.

The early farm retirement scheme is one of the best schemes introduced in this country in terms of bringing about a degree of land mobility. We expect approval before the end of the year. Aging farmers who, up to now, did not have the financial security to enable them to retire from farming, can now do so with a degree of financial security and hand over their land to young and energetic farmers, who will be capable of facing up to the challenges of CAP reform and the GATT.

The way forward for Irish agriculture is to adjust to the challenges which we now face. The only way we can do that is to ensure those who are operating and managing our land have the vitality and the education to increase the profitability of each farm holding and thereby maximise this potential for the nation.

I strongly recommend the early farm retirement scheme to the House. I acknowledge, as Senators have, that there are difficulties but tell me of any scheme that was introduced which did not have some limitation or restrictions. As far as we are concerned we have endeavoured to minimise these to the lowest extent and I anticipate that it will be a very successful scheme.

Mr. Enright

May I ask the Minister of State a question?

An Leas-Chathaoirleach

A brief question, Senator.

Mr. Enright

Regarding a farmer who is leasing 10 per cent of his farm, will this affect the lessor's eligibility to obtain grants, subsidies or retirement pensions in the future? This point concerns me. Will it affect the lessor's rights to grants or subsidies if he later wants to avail of the scheme and transfers the farm to his son, even though he leased a portion of it earlier?

Mr. Hyland

We are talking about a retirement scheme. The farmer who is retiring has to transfer his entire holding, with a small retention provision, to a qualified person. In that case, I am sure the Senator will appreciate, that the question of qualification for grants relating to agriculture does not arise. The position is that the young farmer coming into the scheme, the transferee, will be eligible for all of the grant aid that is available under the CAP reform.

An Leas-Chathaoirleach

When is it proposed to sit again?

Mr. Fitzgerald

Next Tuesday at 2.30 p.m.

The Seanad adjourned at 3.25 p.m. until 2.30 p.m. on Tuesday, 14 December 1993.