This meeting of the select committee has been convened to consider Committee Stage of the Land Bill 2004 and the amendments as submitted. I welcome the Minister of State at the Department of Agriculture and Food, Deputy Brendan Smith, and his officials. We are lucky the committee did not meet on Monday morning, after the drubbing Cavan gave to Meath in Clones last Sunday, but I have got over that now.
It is about time someone did.
Deputy Carty cannot say much either.
It is good to discuss this Bill, given the enormous number of pitches provided by the Land Commission across the country for our Gaelic teams. If it had not, we might not have such good county teams. We were also lucky that many came to Meath from the west and helped us out.
We provided the backbone for Meath.
Section 1 agreed to.
SECTION 2.
Amendment No. 1 not moved.
I move amendment No. 2:
In page 3, subsection (1), line 29, to delete "2004" and substitute "2005".
This amendment is self-explanatory. I propose to remove "2004" and include "2005". I presume 2004 was the Bill's publication date. However, the provision to change it to 2005 would not cause any difficulty. I ask the Minister of State to accept the amendment.
I cannot accept the amendment. Deputy Naughten is aware that 13 July 2004 is the date on which the Bill was published. It was deliberately inserted in the Bill to ensure no artificial annuities could be created after the measure was announced to circumvent the declared intention of the Bill. In July 2004, just under 6,800 annuities were payable, of which just over 4,500 were payable at €200 per annum or less. Almost two thirds of all annuities will be written off under this provision. The total cost is €3.9 million, including the arrears.
Surely, very few people would qualify under these provisions if it was changed from 2004 to 2005? A minuscule number, if any, would be affected by this redefinition.
One could have a family where an annuity was split to have one of €50 and another of €150. An artificial division of annuities in the meantime would offset the intention of the Bill, as published. This would go against the spirit of the Bill and not be fair to the other participants in the scheme.
I will not pursue this much further, but surely no one would have artificially split the annuity in the meantime, because the 2004 date was written into the legislation. There may have been a small number of annuities which were split for various reasons in the past 12 months which would be facilitated.
From a legal perspective, it is important to stick with the date on which the Bill was initiated. We cannot deviate from it.
Amendment, by leave, withdrawn.
Question proposed: "That section 2 stand part of the Bill."
I wish to discuss section 2 in respect of the issue of the definition of the exemption for the annuities. I know my amendment has been ruled out of order. I do not agree with the Chairman's interpretation but that is his decision.
The Deputy should ask the Bills Office.
The Chairman's signature is at the bottom of the decision made. The figure was set at €200 per annum because in the future it will not be economically viable to collect anything less than that amount. Many of the people affected have a repayment period of 14 years outstanding and it was neither feasible nor financially viable to continue. The collection system in place in the lands division is paper based and consequently requires an enormous amount of manpower. This Bill's objective is to try to ensure that as many as possible buy out their annuities to clear the decks, so to speak.
In that context, the Minister of State should review the €200 per annum limit and increase it. Changes to the consumer price index and so forth in the next 14 years will mean that annuities up to €500 per annum will not be financially viable. Currently, the cost of writing them off is very small. I understand it will cost in the region of €1.5 million to write off those annuities under €500 per annum. I ask the Minister of State to re-examine this section and the €200 per annum limit and to return on Report Stage with an amendment.
I agree with the Deputy that it makes practical and economic sense to use the figures we have with regard to the costs of collection, etc. Currently, the bill for the written off annuities will come to €3.9 million. This would rise to €9.6 million were the Deputy's amendment to be accepted, which would be unacceptable. The farming organisations and Members of this House have suggested that the threshold for writing off annuities should be increased to include those of €500 per annum or less. This proposal would also increase the number of annuities written off to more than 5,500, or just over 1,000 additional annuities. It is estimated that the cost to the Exchequer would rise to more than €9.6 million. Such an increase would be a poor return, in terms of cost versus the number of beneficiaries. Any increase in the level of discount may undermine the economic viability of the entire collection system.
The Department of Agriculture and Food and all of us in the Houses of the Oireachtas must strike a balance between the interests of the annuitants and the interests of taxpayers. It must be remembered that these annuitants now have the burden of the annuity lifted from their land without further obligation. The land in question has increased in value substantially in real terms since it was first allocated to these farmers. It would be unfair to go beyond what is already a generous offer and would certainly be seen by the taxpayer as inequitable. The only relief to the Exchequer under this measure is the redeployment of a small number of staff within the Department. Obviously, the larger the annuity, the greater the increase in the land value is likely to be and the smaller the returns to the Exchequer will be. What we have proposed is fair, equitable and progressive. On reflection, I think the Deputy will agree.
I will agree to disagree.
Question put and agreed to.
SECTION 3.
Amendment No. 3 is out of order.
Amendment No. 3 not moved.
I move amendment No. 4:
In page 4, subsection (3)(a), line 14, after “Finance” to insert “and Dáil Éireann” .
There is an error with regard to amendment No. 6 which I will clarify later. Amendment No. 4 is self-explanatory. Under this amendment, the proposals that would be brought forward would need the approval of Dáil Éireann, in addition to the approval of the Minister for Finance. I propose to deal with amendment No. 5 as well as it is related to amendment No. 4 and might speed up proceedings, if this is acceptable to the Minister of State.
It is proposed to discuss amendments Nos. 4 and 5 together. Is that agreed? Agreed.
One of the key issues that has arisen with regard to this Bill is that there will only be a six-month period for farmers to apply for the scheme. The Minister of State knows that now that farmers are only receiving one cheque in the post at the beginning of December, it will make things extremely complicated for them both from a financial and resource management perspective. Farmers should be given a decent window of opportunity to apply for this scheme. I understand the logic of the Department of Agriculture and Food in not having an open-ended scheme. I would like to see an open-ended scheme but the practicalities and reality of it mean it is not possible because there would then be no incentive for people to enter the scheme from day one.
There needs to be a reasonable timeframe and a reasonable window of opportunity made available to farmers. That is why I tabled amendment No. 5 to provide for a two-year window of opportunity in order that farmers could have the opportunity get matters sorted out with the bank, get their single farm payment entitlements sorted out and their cheques, do a deal with the bank and go to the Department. It is fair and reasonable to extend it beyond six months. My difficulty is that the six-month window is not specifically written into the legislation but the indications are that it will be a six-month window of opportunity.
Amendment No. 4 would allow us the protection that the Minister for Agriculture and Food must come before the House with the detail of the proposals prior to publishing them. This gives us the opportunity to ensure it is a two-year window. I do not have any difficulty if the Minister of State has difficulty accepting amendment No. 4. I would be satisfied if he could accept amendment No. 5. He can see where I am coming from. We all agree that we need to have a fair and reasonable window of opportunity for farmers to draw down and take up the measures under this scheme and I do not think six months is adequate.
Will the Minister of State indicate when the six months will begin running? Is it from today or is it from September or October 2005? Could a campaign be put in place to notify farmers well in advance of the six months expiring and to appeal to them to join the scheme? Does anyone else wish to comment?
I agree with the Chair's call for an advertising campaign to be put in place to give farmers ample notification.
With regard to amendment No. 4, section 3 of the Bill provides for the Minister having the statutory power to introduce a scheme for the purposes of section 3(1). It is not usual for an administrative scheme provided for in primary legislation and to be introduced by way of regulations made subject to the consent of Dáil Éireann, being obtained in advance of introduction. The scheme will be laid before both Houses of the Oireachtas in the normal manner prior to its introduction. This is in line with the advice we have been given by the Attorney General. It would add unnecessarily to the work of Dáil Éireann. The reference to the Minister for Finance in the Bill is standard practice for such schemes and is considered to be a sufficient safeguard in the interests of the taxpayer.
Regarding amendment No. 5, I take the points made by the Chair and Deputies Naughten and Carty. As Deputy Naughten noted, the Minister for Agriculture and Food has not yet decided the period for which the scheme will be operational. The purpose of the discounted buyout scheme is to try and bring about the termination of annuity payments. To date, annuitants have had 11 months to look into obtaining finance from their financial institution and to check that the title to the lands subject to any annuity is in order. It is likely that the scheme will not be introduced until the autumn. At that time, the Minister for Agriculture and Food will decide on the life of the scheme. The longer the scheme is open, the more adjustments will need to be made to the redemption figures as half-year gale days go by. The purpose of the scheme is to encourage annuitants to avail of the scheme within a reasonable period of time and to bring the ongoing collection of annuities to an end. Accepting Deputy Naughten's amendment would lead to administrative difficulties and unnecessarily prolong the administration of the scheme at additional cost to the Department both in time and resources.
The three Deputies who have spoken referred to the indications that it will be a six-month period. This is the type of time period about which we are talking. We cannot anticipate the decision of the Oireachtas with regard to this Bill but we appreciate the support of all Members of the Oireachtas, in the Seanad and on Second Stage, and I hope we have that support here today. Pending the passing of the Bill on Committee Stage, it will go back to the Dáil for Report Stage. We hope the Bill will pass here today. We will seek through the Government Whip's office to have Report Stage taken as early as possible in the House when the Dáil resumes at the end of September. The reality is that we are probably talking about the statutory instrument and the relevant regulation being made before the end of this year. As a general indicator, we hope to have this statutory instrument in place in December.
From now until the six months are up, we are talking about a period of approximately ten months. The Bill was published just over 12 months ago. By any yardstick or measurement, it gives adequate time to people to source funding and ensure the title to their lands is in order. I understand all of us leave everything to the last minute and if it was five years down the road, we would have people seeking an extension in the last week. We should bear in mind that if the period is extended beyond six months, the scheme will run into two or more gale days. This will necessitate a further mailshot for redemption figures to annuitants. This has obvious implications for Department resources in terms of manpower and finance. One of the gale days for most is 1 November. We hope to start the clock ticking and have the statutory instrument placed before the Oireachtas relatively early in December and definitely before the end of this year. We are giving people six months from December to have matters finalised.
We are returning to recalculating what people must pay and what will be the redemption figure. I am informed by the Department that there has been widespread interest in this scheme. People have telephoned the relevant section in Castlebar to inquire about their likely redemption figures. The Department is just quoting these at present. Assuming that Report Stage is completed and the legislation is signed by the President by early October, six months will be adequate. The scheme will then be operational from December. As public representatives, none of us is shy in sending releases to local media extolling the virtues of this Bill.
By all accounts, the Minister of State is not shy.
My constituency colleague from the Deputy's party is on the radio five days a week. Perhaps he will take one morning to extol the virtues of the Bill and encourage annuitants in our counties to avail of the scheme.
In respect of the specific questions asked by the Chairman and Deputy Carty concerning a campaign, the Department will write to every annuitant and will start a widespread media campaign advising people of the particulars and value of the scheme, as well as the need to avail of it within the time period. This substantial campaign will consist of paid advertisements and news releases. I hope all Members of the House who have interests in agriculture, rural affairs and rural development will extol the virtues of the scheme and encourage their constituents to avail of it.
Deputy Crawford will respond to what the Minister of State said. The Minister of State has indicated that farmers have had nearly 12 months to source funding. There is a problem because it is difficult to source funding until one knows exactly what will happen. The legislation has not been enacted. Many farmers place their trust in Deputy Crawford and I to make a strong argument here to have changes made to the Bill. They also place their trust in the IFA to lobby for changes. It is unfair to say farmers have had 11 or 12 months at this stage. As everyone is aware, there can be a legal quagmire regarding titles of lands. Most farmers have not examined the issue. If the Minister of State looks to his own constituency, CPOs for road schemes have been served. The same is currently happening in respect of gas pipelines and motorways in my constituency. However, a considerable number of landowners still do not have titles. This issue has been flagged for a significant period of more than 12 months but nothing happened until the very last minute, when the farmers did not receive their compensation.
I am extremely disappointed regarding the grounds to which the Minister of State referred, namely, the cost of postage stamps and the money that must be given to An Post to send out a second mail shot. This must be done anyway. The target is December. For the majority of farmers, 1 November will the one of the gale days. When the first mail shot is sent in December or early January, it will give the calculations based on the November figures. Farmers will meet their second gale day within the six-month window of opportunity. A second mail shot must, therefore, be sent. If this is the case, why can the Minister of State not set 31 October as the closing date? This would not mean additional administration costs or mail shots. In light of that fact, will the Minister of State give a commitment to allow the extra nine or ten months?
Will the Minister of State also give a commitment to provide for a six-month window of opportunity from the enactment of the legislation to the signing of the order in order that there can be a publicity campaign to give farmers the chance to put in place funding to deal with the issue of titles? This would be a 13 or 14-month window for farmers rather than this strict six months. There is flexibility in what the Minister of State is proposing in terms of extending the period. Will he accept amendment No. 5?
If the scheme becomes operational from December, for example, and if a person wishes to participate, the next gale day's demand will not be part of the redemption costs. Even though the next gale day will have been reached before the date of the conclusion of the scheme, I assure the Deputy that the previous gale date demand will not be part of the cost of the redemption. Farmers are obviously aware of this proposal. They have contacted the Department to inquire about their likely redemption figures. The Department has assisted a large number of farmers by giving them the figures as of today's date. A second gale date arriving within the time period of the scheme's operation will not be a cost factor in these figures. We must tidy up this matter. Most farmers now have their legal titles in order. In recent years, there has been much "tidying up", if that is the proper term to use, in ownership and titles. It is our understanding, from the legal services within the Department and elsewhere, that when legal processes are in motion, the financial institutions are generally willing to make payments, forward loans and approve funding.
I cannot accept the amendment. I know that Members from all sides of the House asked on Second Stage to have the period extended. We are discussing an extremely generous and beneficial scheme that will write off two thirds of the current annuitants. There must be a finite date. There are a few months, before the scheme becomes operational, in which there will be a widespread campaign effort by the Department. Annuitants will be informed of the calculation of the redemption figures if they wish to avail of the scheme. We will get the message across to farmers that this is the last opportunity to avail of the write-off and the reduced figure. The scheme's value can be widely articulated to the farming community and annuitants in the next few months.
I apologise for being late. How many will be in this position? Two thirds of those currently in the scheme will be cleared by the write-off.
A total of 4,500 will have their annuities completely written off and 2,300 farmers will be able to avail of the reduced figure.
How many of these are in arrears?
Approximately 1,500 are in arrears. That could be as a result of one instalment which is not a serious arrear by any yardstick.
Does the Minister of State have a figure for serious arrears?
A total of 49 annuitants owe almost €1 million in arrears; 34 annuitants owe in excess of €10,000 each; ten annuitants owe in excess of €20,000 each; two annuitants owe in excess of €30,000 each; and three annuitants owe in excess of €40,000 each. Concerning the 25% buy-out discount for those over €200 per annum, capital outstanding is at €17 million and the figure for arrears outstanding is €4.1 million. The cost to the Exchequer for the 25% discount is €4.25 million.
I arrived late to this meeting and learned that we are to launch a media campaign to highlight this issue. Deputy Naughten and I wish to extend the benefit to as many people as are having problems. I would feel very aggrieved if we launched a media campaign to let every farmer in the country know that this is happening.
That was not the idea of the media campaign. It was to encourage farmers to avail of the scheme.
The only people with whom we must deal are the 2,500 active participants. Surely the cheapest way to do so is to deal with them directly and to try to use every possible means to help them get out of the mire. Some are in this situation through bad farming but for some it is due to high prices and high interest levels, which is no fault of theirs. We are launching a media campaign to inform every farmer, yet only 2,500 farmers can benefit. These are the people on whom we should concentrate to ensure they benefit to the highest possible level.
This is an information campaign rather than a media publicity campaign. Other members mentioned the need for maximum dissemination of information. The Department will write to each individual and will state, through public media, that this is the last chance to avail of a generous scheme, one which was previously available in 1993. The Department has spoken to individual farmers who have run into difficulties over the years and this practice will continue.
Thankfully, land is appreciating rather than depreciating. We wish to inform people that few sectors of the community receive discounts on the buy-out of their own assets, for example, homes or any other source of employment. A total of 13,000 availed of the buy-out scheme in 1993.
A substantial number will be able to avail of a scheme funded by our taxpayers. All Departments have an obligation to the taxpayer as well as to their own customers and clients. We have examined this Bill at ministerial and official level and believe it is a generous, practical Bill that balances the State's obligations to taxpayers and to beneficiaries of this scheme.
There are many other institutions in the State which would write off a certain amount of debt or arrears. That is common practice and former Members of this House have had arrears written off by banks.
To my knowledge the banks were never very generous to the small farmer, in whom I am interested.
I accept that.
The Department and the Legislature are being generous to the small farmer in this instance as all parties will appreciate.
I accept that but I wish to make the following three points. Consider the cohort of 98 landowners, and the 49 who have arrears in excess of €1 million. This is a substantial amount of money and it will be difficult for them to generate a loan from a bank irrespective of the asset value of their property. No bank manager here will touch them with a 40 ft. pole if they have arrears of €1 million.
It is not €1 million each. The total figure for the arrears of the 49 landowners is €1 million.
I apologise. It is a substantial amount of money and the farmers are in financial difficulty. I accept that a handful will not pay under any circumstances and there will always be people who believe they can receive everything for nothing. The majority of that cohort comprises people who are in difficulty with banks and they will need a greater window of opportunity than six months in which to address this.
Will the Minister of State commit to providing additional staffing resources in Farnham Street to ensure all outstanding issues relating to title can be resolved, and that this will be done within the six month window of opportunity? What will happen if someone is considering taking up this scheme but dies before having done so? By the time the documentation has been processed by a son, daughter, niece or nephew the window of opportunity could have disappeared. Both the Minister and I will have to deal with cases such as this. Will there be a mechanism to allow for a force majeure procedure or some flexibility in exceptional circumstances?
I have some experience of the Land Commission as I am a beneficiary. I appreciate the work it did during the years. There are difficulties in respect of titles and an example of this is a section of my former holding transferred in 1971. When the recipient went to get deeds dealt with for a site for his daughter the process was complex. It is only when one has a personal experience such as this that one realises the difficulties that can occur.
Deputy Naughten and I are merely seeking to ensure there will be some understanding and flexibility. We would rather have it across the board but if that cannot be achieved, it should apply in cases — similar to that to which Deputy Naughten referred — where a sudden death has occurred and there is a genuine difficulty. The cheapest place people can get money is building societies which will not release money until they are certain that the deeds are correct.
We are fortunate that we have highly competent staff in the relevant lands division in Cavan. The staff numbers are adequate——
They are not adequate to deal with it.
The Deputy should allow the Minister of State to speak.
There will be no delay on our part. The necessary and adequate resources will be available within the Department to facilitate people availing of this scheme.
With regard to Deputy Naughten's point, I cannot be prescriptive on the issue of sudden death during the operation of this scheme. Perhaps we will return to this issue and I will give the Deputy a more considered response. My initial view would be that the financial institutions with which the deceased person dealt would work with the successor or with the executor of the will in order that the scheme might be availed of. I will give a more considered response on that between now and Report Stage.
The answer, therefore, is no. The Minister of State will not provide any flexibility.
I do not know whether it is possible to legislate for those provisions. I will provide a more detailed answer in writing for the Deputy. I do not want to mislead anybody or to raise a false expectation that might be quoted if such an unfortunate incident were to occur.
Is the Minister of State certain he will be quoted? I have no doubt about it.
I want to be fair and accurate.
Amendment, by leave, withdrawn.
Amendment No. 5 not moved.
Question proposed: "That section 3 stand part of the Bill."
Section 3 deals with the scale of the discount to be provided. I will not delay on this issue. I know the Chairman ruled my amendment out of order. I ask the Minister of State to examine amendments Nos. 3 and 6. The idea is to create an incentive, remove the annuities and clear this issue up. A window of opportunity of only six months is provided, in which there will be significant arrears to be paid and amounts of money due. There needs to be flexibility or a tiered system for the provision of the discount. I suggested a 25% discount up to €6,000 and a 50% discount above this. I ask the Minister of State to seriously examine these specific elements prior to Report Stage. He made the point that it is a generous scheme, which will be acceptable for the majority of people. We want to ensure the 1,500 with arrears, particularly the 49 with total arrears of approximately €1 million, will also avail of this scheme. It is critically important to get rid of that cohort. We must examine this matter in order to deal with those issues. I ask the Minister of State to return on Report Stage with an amendment to section 3 along those lines.
I reiterate to the Deputy that we will not return with an amendment on Report Stage. The Deputy referred to some of the significant arrears of individuals. I do not know the individuals who have large arrears but the officials in the Department advise me that many of those with such arrears are from the bigger and better farming counties and not counties in which small-scale farming is practised.
I wish to return to this issue briefly.
I am wrapping this up now.
I dealt with someone in my constituency who had money stopped at departmental level. I am aware of some of the serious difficulties people experience. I urge the Minister of State to re-examine that situation between now and Report Stage. That is why I stated that money available for advertising campaigns should go to benefit those with serious difficulties.
To return to the point about information, the Department has a duty to notify annuitants, which is done in writing. The Department also has a duty to advertise the scheme generally and advise people that this will be last scheme of this nature. We will not spend money willy-nilly on a publicity campaign. I appreciate that Deputy Crawford was delayed in arriving at this meeting. I stated all Members of the Oireachtas, including the Deputy, who is my constituency colleague, will go on local radio and extol the virtues of this legislation.
Will the Minister of State allow him to do so?
I will debate the matter with the Minister of State at any time.
Question put and agreed to.
SECTION 4.
Amendment No. 6 not moved.
I move amendment No. 7:
In page 4, subsection (2), line 45, to delete paragraph (e).
This amendment is self-explanatory. It was tabled because, under the terms of the legislation, a hold can be placed on certain transactions if there are arrears. I accept the principle because it is a mechanism to ensure all arrears are cleared by any person who has outstanding arrears with the Department. The difficulty is with the term"lease". If a person is in financial difficulty and the Department and their bank are pursuing payment, this is one way to generate income. We all know that in a time when farm incomes are collapsing, it is difficult to generate income. Under this provision, the farmer cannot go through a formal lease because of his arrears. The provision prohibits a farmer from generating an income to make a return to the Department. In light of this and if the legislation is about addressing the issue of people in arrears trying to clear the slate, paragraph (e) should be removed from the section.
The issue considered by the Deputy is that the Department must ensure that any form of land transaction subject to a land purchase annuity, including the leasing of land, requires a certificate confirming that all annuity payments have been paid. The Department does not want and cannot create a loophole which would give rise to the possible avoidance of annuity arrears being discharged through use of leases. I cannot accept this amendment.
We should remember that a primary function of the legislation for those with remaining annuities is ensuring the annuities are kept updated. To exclude leases would allow more arrears to accumulate, with no incentive to pay. The section provides that the Registrar of Titles cannot register a transaction involving land subject to a land purchase annuity unless the transaction is submitted with a certificate confirming that no arrears are outstanding on the annuity. The only transaction not requiring a certificate is a change to joint tenancy between spouses, where either one was previously registered in sole name or where they were registered as tenants in common. This section is needed to act as a control measure to ensure people with annuity arrears pay them prior to disposing of their land.
I accept what the Minister of State said about the disposal of land. That is why I have an objection in the case of leases. A lease does not involve a disposal of land. Let us consider, for example, the case of a person aged 55 or 56 who has been struggling to keep his head above water for the previous ten years and who now sees that there is no future in farming. He probably receives a small single farm payment. Such a farmer who decides that the best course of action is to opt for the farm retirement scheme would find himself ineligible. The farm retirement scheme, together with the lease, would give him the income to make the payments to the Department. However, the Department is prohibiting such a farmer from generating the income to make the repayments. As a result, he will remain in farming and will retain the arrears and struggle to make some repayment whenever possible. The Minister of State is not giving such farmers the opportunity to address the arrears because of the stipulation outlined in the Bill. That is my difficulty with this matter. I presume that the Minister of State, given his knowledge of the agricultural scene, would agree that, in such circumstances, it makes financial sense for the Department to facilitate such a lease so that income is generated which can pay the arrears.
We are both seeking the same objective. How we achieve it is the issue. I would have no difficulty if the legislation was amended to include some mechanism which would provide that part of the income of such a lease had to be given to the Department. However, the Minister of State should at least give farmers the opportunity to generate income to allow them to make repayments. He is prohibiting such farmers, who have the potential to retire, from generating income in order that they could make their repayments and pay off their arrears.
What I stated was the advice available to us from the Attorney General's office. A lease is actually a disposal of possession. The Deputy mentioned that it may generate income to pay off the banks. The Department is a creditor also.
I did not mention the banks. It was the Department of which I spoke.
I accept that. I thought the Deputy did mention the banks. The reality is that a lease is a disposal of possession. The advice available to us is firmly what I stated in myearlier reply.
How should we advise the farmers to whom I refer?
I do not know how they can avail of the scheme.
The difficulty is that the practicality of what the Minister of State is proposing and the legal side are two different matters. We both have the same objective but we differ on how to resolve matters.
If a person can generate income, he or she can raise funds. If the arrears to the Department are paid off, then there is no legal obstacle to the lease.
I presume the Minister of State will negotiate with all of these banks.
I will not say that. I do not know how one could address it legally otherwise.
I spent a good deal of time dealing with applicants to the EU pension scheme. If we are to make it as easy as possible, the Minister of State must be reasonable. Unless the scheme is crystal clear, with all the i's dotted and t's crossed, the officials in the Department of Agriculture and Food claiming to be the custodians of the European Union will not allow that scheme to go through. It is naive to suggest that one could get a bank loan on the basis of a scheme that has not even been sanctioned.
A farmer can let his land on an 11-month system without any difficulty. He can let it in a way that involves neither a commitment nor a guarantee to anybody. The person who takes it cannot take the tax benefit and obviously there will be a lower income from it as a result.
All we ask is that common sense would prevail if somebody can specifically show that he wants to opt for the EU retirement scheme, which is sponsored by the Department. If this lease issue is part of the legislation, that cannot happen. I ask the Minister of State to reconsider the matter. If such a person, who makes clear that he wants to opt for the EU pension scheme, can get that pension and can obtain a lease income from his or her land, he or she would surely in a better position to make the repayments to the Land Commission than would otherwise be the case.
I reiterate the advice available to us but we can check back again with the Office of the Attorney General.
The Minister of State can return to the matter on Report Stage.
If there were some individuals affected, their number would be small. It is not a general application. I can come back to the Deputies on Report Stage. With regard to an issue of this nature, however, where there is leasing, disposal of possession, etc., we are involved in legal areas where we would want to be concise in what we say is possible. We can have this matter investigated further and we will deal with it on Report Stage.
Most of the people concerned are those in the 55 to 65 age bracket who obtained land in the 1970s and early 1980s. There is potential for at least some of those people to opt to take early retirement and we should not close it off.
Amendment, by leave, withdrawn.
Question proposed: "That section 4 stand part of the Bill."
Amendment No. 6 which relates to section 4 was incorrectly printed. The section deals with offsetting payments. I would like to discuss sections 4 and 6 together.
Amendment No. 6 is out of order.
I am referring to section 6.
We will first dispose of section 4, on which amendment No. 6 has been ruled out of order.
The Chairman is not listening. He cannot argue that we are unduly delaying the committee. I stated on two separate occasions that amendment No. 6 was incorrectly printed. I oppose sections 4 and 6 of the Bill and would like both to be discussed together, if possible, in order to speed up the work of the committee.
That is fine.
I flagged my objections to both sections on Committee Stage and requested the Minister of State to return on Report Stage with specific details. Unfortunately, he indicated that he will not do so. These two elements of the Bill are critically important and they provide the Minister with exceptional powers to invoke repayments from third parties. If a farmer has arrears this time next year, the Department can take the money from the single farm payment due to him or her or can obtain access to his or her dairy cheque. As already stated, many of the 49 farmers have significant financial difficulties, which is why they are in arrears with the Land Commission. Many of them are also in arrears with the banks. I asked the Minister to come forward on Committee Stage with specific provisions to ensure these sections would not be abused and that protections for landowners would be included.
I accepted the word of the Minister on Second Stage that her objective was to target people who were not prepared to pay their arrears despite having resources available to them. There is a small number of such individuals and I have no difficulty in principle with the Department pursuing them for arrears. However, I have major difficulties with the targeting of family men whose backs are to the wall because of bank debts and who are waiting on the single farm payment to come through to make repayments to the bank. When the payments come through, the Department claws back some of it for the payment of arrears. I asked for protections to be put in place to allow for a balanced system. Sadly, however, that has not happened. Will the Minister of State respond to this matter and give an indication that he is prepared to address this matter and ensure that the system cannot be abused?
The set-off powers in section 4 of the Bill are designed to ensure farmers who retain their annuity maintain payments thereafter. I have an obligation to the Exchequer and to those who have discharged their annuities in the past to ensure that ongoing financial obligations are met on time. Therefore, I cannot accede to the Deputy's amendment.
The section provides that the Department may withhold payments due to an annuitant where the annuity is in arrears. At present, where a person is in arrears with his or her annuity, the Department makes every effort to secure payment of that annuity. One of the principal means of securing payment is to agree to set off the annuity against other payments made to the individual by the Department. However, some individuals have refused to co-operate with the Department. In the light of such experience, we have included this provision to remove any uncertainty.
I advise that after the buy-out scheme is closed, the Department intends to manage any outstanding annuities actively. As part of this process the Department intends to set off arrears in the event that annuitants fail actively to show an intention to comply with their ongoing obligations to the Department. I echo the opening remarks of the Minister in her Second Stage address to the Seanad and the Dáil and assure the committee that prior to any set off being applied, it is intended to consult fully the individuals concerned. The Department will have due and full regard to the financial affairs of those people and their ability to pay.
The Deputy also outlined his objections to section 6. Should I respond to his comments?
Yes.
The powers set out in section 6 do not place the Department of Agriculture and Food in a better position than any other creditor. It will be necessary for an application to be made to the appropriate court of competent jurisdiction to obtain the relief provided for in the Bill — for example, a garnishee order as provided in the section. The Department is unable to redirect payments due from third parties who might owe money to an annuitant without first making application to court. I again stress that we must put measures in place to ensure that farmers who retain their annuities maintain payments thereafter. We have an obligation to the Exchequer and to taxpayers to ensure that ongoing financial obligations are met. Therefore, I cannot accede to this amendment.
We hope there will be no defaulters but if there some, the numbers will be very small. Our colleagues on the Committee of Public Accounts have often referred to the large numbers of defaults and arrears in the annuities sector. To be fair, with the generous buy-out scheme in 1993 and this new scheme, we are giving people, particularly those who may have experienced financial difficulties in the past, the opportunity to get matters finalised, up-to-date and into order. There is a balance to be struck between our obligations as legislators to the taxpayer and the Department's obligations to its own customers and clients.
I accept that the Committee of Public Accounts has discussed this issue in the past but it has also highlighted much more serious issues recently. Neither I nor Deputy Naughten are here to support people who want to blackguard the system.
I was not suggesting that.
However, we are concerned that the issue be dealt with as reasonably as possible. Some of the measures, in section 4 particularly, are among the most draconian in the State. No longer is the single payment just a means towards an income. In many cases, it is the sole income of farmers and the total means by which a family must live. That is why we are so angry and anxious about the method being used to collect arrears. I have already had representations from people where the clawback has been used against their income and it is a serious matter.
How many participants in the Land Commission payments scheme have had their arrears collected by debt collectors?
In the past £330,000 was collected under that system.
I presume that was at a cost of 20% or more of the total collected.
The correct figure for collection costs is approximately 7%.
Is that figure of 7% correct?
That is my information.
The Land Commission must have much better debt collectors than some other organisations. My point is that the Minister of State should re-examine this proposal before the Bill is enacted.
It is the intention of the Department, as it would be of all Members of the Oireachtas, to consult the individuals concerned. It will have absolute and due regard to the financial affairs and the ability to pay of individuals in difficult circumstances. Single farm payments will not be withdrawn from a person who is making an effort to pay arrears, has consulted the Department and is not running away from his or her obligations. It is not the Department's intention to make life difficult for people who do their day's work and who want to fulfil their obligations.
The Department has during the years met and consulted people regularly. All of us, as public representatives, have interceded on behalf of individuals who outlined to us their circumstances and, subsequent to those intercessions, the Department has borne those circumstances in mind when making any decision regarding the reduction of payments and so forth. That position will continue and I emphasise again that the Department will have absolute regard to the respective financial affairs of individuals and their ability to pay.
There are two elements to this issue that I want to highlight. First, there is family sickness which can create major problems. I have dealt with one such case. Second, there is the issue of animal health where herds have been seriously damaged as a result of tuberculosis or other diseases. Such difficulties must be recognised.
The majority in arrears were encouraged to take on land. I got land from the Land Commission and tremendous pressure was put on others to take the land I received, regardless of whether they could afford it, to ensure that I did not get it. That is the reality. People were encouraged to take this land. They were pressurised and advised that they should do so because it represented a great opportunity. They then found themselves with land and paying loans at high interest rates. Some of them are not in arrears as a result of their wanting to be; they are in arrears because they were not able to manage otherwise.
I endorse Deputy Crawford's comments. I accept what the Minister of State has said and I have no difficulty with the legislation. My concern relates to the fact that what he said and what is contained in the legislation are completely different. There is no protection, either in section 4 or section 6, along the lines to which he referred. I pleaded with him and the Minister on Second Stage to bring forward an amendment on Committee Stage that would provide the type of balance to which he refers and the type of protection required.
I have heard Ministers stating on numerous occasions that a fair and reasonable approach will be taken. I can give the Minister of State examples of different sections of his Department using a heavy hand. Powers were brought in and although it was never envisaged that they would be used in a particular mechanism, their presence led to them being utilised to put pressure on people. My difficulty with this is that a sledgehammer is being used to crack a nut.
I accept the Minister of State's point that criticism has come from the Committee of Public Accounts. The latter also criticised the Department of Justice, Equality and Law Reform on the issue of fine collection. However, the Minister for Justice, Equality and Law Reform will not put forward legislation for the attachment of earnings on the collection of fines. These decisions are to be taken by the courts and yet we are prepared to do it for section 4 of this Bill, which will not go through any court and in respect of which a balance will not be put in place. I have consistently stated in respect of both of these sections that protections should be provided. We will support the making of such provision. As they stand, the sections represent a blank cheque for anyone to use a heavy hand against individuals.
This legislation is ideal in the case of a small amount of arrears or if annuities are paid to date. If a person is in financial difficulties, the legislation is no use whatever. There is no discount on the arrears. Many are in difficulties, not only with the Department but also with the banks. They have bad credit ratings and they will not get money from banks to draw down loans. The legislation will not facilitate this. The objective of the legislation is to clear the slate on the issue of annuities but this is not being facilitated by eliminating those who have found themselves, through financial difficulty, with significant arrears. I accept that there are people who have merely not paid and that these individuals must be dealt with. The provisions allow for this but they also allow for a heavy hand to be used against those who are heavily in debt to banks and other financial institutions. The Minister of State is not providing any protection in this regard.
I do not accept that the legislation provides for a heavy-handed approach to be used by the Department. The legislation should be seen in a positive light for the fact that it provides for a write-off and for a substantial reduction. In 1993, interest rates were over 10% and some were as high as 18%. At that time, the rates were reduced to 10%. At present, interest rates are thankfully mainly in single digits. This is a totally different economic and financial environment than in the 1990s, when approximately 13,000 people availed of the scheme. The reality is, as already stated, that people's assets are appreciating rapidly.
We wish to encourage people and to see the maximum participation in this scheme. We do not wish to see cases with people in difficulty and hardship and we would like to see everyone in a position to avail of the scheme. The Department will have absolute regard for the ability of people in difficulty to pay and for their overall financial affairs. We cannot have legislation that can be framed for the parameters of every individual. This legislation is compact, compartmentalised and as strong as it can be in terms of ensuring that people in difficult circumstances will have their cases dealt with as favourably as possible by the Department. The Department will not pursue defaulters in a random fashion. Ridiculous suggestions were made on Second Stage that the Department could intercept payments from third parties to defaulters. The Department is not judge and jury in such cases. If it had to pursue that route, which we hope it will not, the issue, as in any other case, would have to go before the courts.
Question put and declared carried.
Section 5 agreed to.
SECTION 6.
Question proposed: "That section 6 stand part of the Bill."
I oppose this section.
Question put and declared carried.
SECTION 7.
Question proposed: "That section 7 stand part of the Bill."
I have a query on this section. From reading the national newspapers, I know the Chairman has a similar query. It has to do with cow parks, which is one of the matters provided for in section 7. Can we put any provision in place to ensure we do not give a blank cheque, either to the trusts or the local authorities, to carry out development on these? Such parks are public amenities. They have not been developed to the benefit of local communities over the years to the extent that they should have been. The issue of title was probably part of the problem.
While the Minister of State may correct me if I am wrong, my understanding is that the trustees will be able to get absolute title, or the equivalent of absolute title, on these properties. These properties were in the possession of trustees for the purpose of holding them for local communities, mainly to graze cows. Should these properties come back into the possession of the local authorities? A considerable number are already in the possession of the local authority, but those that are not could come back under its control. If the property was then disposed of, it would have to go before the elected members of the local authority and one could ensure the community was protected.
Some say these cow parks should not be developed. It may be ideal to develop them for either residential or industrial use and the resources used to develop other community facilities. There needs to be flexibility to allow for this. The net beneficiaries of anything that happens to these cow parks should be the local communities themselves. Protection must be put in place to ensure it will not benefit individual trustees or local authorities. Perhaps the Minister of State would comment on these concerns.
The section inserts a new paragraph in section 30 of the Land Act 1950. The insertion provides that the Minister may transfer trust land, at the request of the trustees, to a third party, normally the user of the trust land. Previously, if trustees wished to transfer trust land, they required the consent of the Minister before all the legal and financial responsibilities were dealt with. The introduction of this provision will mean that trustees may request the Minister to transfer the land directly, thus relieving them of the burden of this transfer.
There are more than 300 trusts remaining, of which it is anticipated there are 200 where the trustees may seek to transfer the property to the users. It is believed the main beneficiaries of this proposal will be local sports clubs, in particular GAA clubs. The power to transfer is discretionary. Where it is believed the land will not be put to best use following a transfer, there is no obligation to comply with the trustees' request transfer. It should also be noted that the trust lands have already been paid for and the powers held by the Minister are residual and not controlling.
With regard to the Deputy's other point, which was raised on Second Stage by Deputy Brady in regard to cow parks and cow plots in County Meath, in particular, I reiterate what I said in the Dáil at the time. It was never the intention that cow parks no longer being used for their intended purpose and which were transferred to county councils should be sold off by councils to the highest bidder. The position in future will be that before a cow park is transferred to a county council, a specific commitment will be obtained from the council that the land will be used for sporting, recreational or other purposes for the benefit of the local community. In addition, they will not be sold on to generate income for a local authority.
In fairness to local authorities, in many instances they have been the trustee and have maintained and protected the cow parks down the years. Members of this committee and of the House in general agree with the use to which we want to put these valuable pieces of land.
There is an enormous number of cow plots in my county which are worth millions of euro. We all have experience of dealing with local authorities down the years when finances are tight. Many of these cow plots are in rural areas and will not be suitable for community facilities. The plots closest to villages or towns can be used for such facilities. Some of these plots in rural areas cover approximately 50 acres. I am concerned that the council will sell them to the highest bidder. In fairness, when the Land Commission disposed of a cow plot in my area, which caused much friction at the time, it disposed of it to small landholders.
A clause should be inserted in the legislation whereby many of these plots would be made available for sites for young couples at reduced rates, including young couples who may have had to emigrate from these small land holdings down the years and who now want to return to the country. There is no reason county councils cannot make these plots available for small schemes of ten or 20 houses given the sewerage facilities, Bord na Móna facilities and other types of facilities in place. These sites should be made available at a reduced rate for young couples to build houses. I am concerned that the county council may put them on the open market, which I would not tolerate. I know the Minister of State and members of this committee would not agree with that policy.
The Bill relates, by and large, to GAA properties. Deputy Naughten and the Chairman referred to the possible selling of properties by local authorities. The Department is not aware of county councils selling former trust properties for non-community use and if any members have concerns in that regard, I would appreciate it if they would contact the Department.
With regard to the Chairman's specific point on the sale of such land for sites for first-time buyers, returned emigrants or whatever, that particular proposal would be relevant to section 8 of the Irish Land Commission Dissolution Act 1992. If members of the committee or the House wish to put forward specific proposals to the Department on the future intentions of a local authority for such properties, we would like to hear about it. I reiterate that the public interest will be safeguarded, not the interests of a particular local authority to raise revenue for itself or the interests of any potential purchaser. The public interest will be protected.
Question put and agreed to.
Sections 8 to 11, inclusive, agreed to.
SECTION 12.
Question proposed: "That section 12 stand part of the Bill."
I wish to raise two issues. Section 12 is one of the broadest sections in the Bill, even though it is probably one of the shortest in regard to the repeal of various provisions. The first issue relates to the repeal of section 45 regarding people outside the European Union or the European economic area, with which I have no difficulty.
I flagged an issue on Second Stage and would ask the Department to consider it in the context of local authorities reviewing their county development plans. An increasing number move to rural areas who are not originally from those areas or are one step away from it, and they experience noxious fumes at different times of the year. Most of us pass no remarks on this because we have grown up with such fumes and are used to them. However, there must be some balance, especially in light of the nitrates directives and so on, because the next door neighbour of a farmer who is in severe difficulty and who may have a limited amount of land on which to spread slurry could be ringing the local authority every second day complaining about these noxious fumes.
The Minister of State should use his good offices to write to each local authority suggesting that when planning permission is being granted in a rural area, one of the conditions should state that people should be conscious of the normal ongoing farming practices in the community. This should be included as a standard condition of planning permission in rural areas. This would resolve the issue in future. Local authorities have done this in the past, specifically where a landowner has flagged an issue regarding limited lands to spread slurry. The Minister of State should write to local authorities in this context when they review their county development plans.
I wish to raise a final point. Under section 12, the Minister will remove the requirement that people obtain permission to lease or sublet lands, which is fair and reasonable. A constituent recently asked me about a difficulty she had with the Land Commission. This does not concern an isolated incident but involves something that happened on a number of occasions. A family of three sisters whose parents were deceased did not actively farm their land but set it on an 11-month lease. The Land Commission forcibly purchased the land because the sisters were not utilising it and it was distributed between two landowners, both of whom subsequently sublet it to the same tenant who had leased it from the three sisters. This was despite the fact that the new owners were not permitted to sublet the land.
This type of situation arose in the past and may only be of historical significance now. There was abuse of the powers of the Land Commission. Some were forced to sell their land because they were leasing it, yet the purchaser often leased it back to the original tenant. This was an abuse of the system and should not have been allowed to happen. I hope there will be no repeat under any mechanism that this Department or any other produces.
I support Deputy Naughten and the Chair on the serious issue of planning permission structures. Farmers sometimes provide a neighbour's child with a site on which to build. Through no fault of their own, these people may have to leave the area and sell the house to somebody else. When somebody else buys the house on the farmer's land, the planning becomes a major issue. We need to have it written into the planning permissions relating to rural houses that the planning is subject to the normal farming structures. I do not mean that there should be any abuse of farming structures, I am merely stating that the planning should conform to normal farming structures in an area.
The issue has become more serious. As Deputy Naughten pointed out, limits with regard to the nitrates directive will be in force from 1 January 2006. At present, local authorities are asking individuals to prove their right to sites in these areas and people must justify their rights. Equally, there must be a balance in the other direction. If somebody buys a property in a rural area and wants to live in it, they must be prepared to abide by normal, good farming practice.
The Department of Agriculture and Food has enough issues on its plate without becoming involved in the planning area. As a public representative, I concur with the views outlined by members. Perhaps the clerk will forward the extracts from these proceedings to the Department of the Environment, Heritage and Local Government for its consideration. We will not get into the planning area, which would bring us into the common law areas of tort, nuisance, etc. These are somewhat outside the remit of the Bill.
With regard to Deputy Naughten's comments about land being compulsorily acquired by the Land Commission, this has only a historical dimension now. The last land acquired was in approximately 1985. As the Deputy said, sections 3(2) and 3(4) of the land Act of 1928, section 6 of the Land Act 1946 and section 12 of the Land Act 1965 require Land Commission consent to subdivide, let or sublet an agricultural holding. We propose, in section 12(a), (c) and part of paragraph (d), that this requirement should cease. These measures were originally introduced to prevent the development of uneconomic holdings. However, time has shown that economic factors tend to lead to the consolidation of holdings, rather than, as evidenced by the increasing size of farms, to their continued subdivision. The removal of consent should take away some of the red tape and bureaucracy, resulting in reduced costs of conveyancing for every landowner. Section 12(b) repeals the provisions set out in section 28 of the 1931 Act, requiring the entire vesting order to be published in Iris Oifigiúil and is a consequential amendment on foot of section 8.
Section 12(d) repeals section 45 of the Land Act 1965. The latter was introduced prior to our membership of the European Union. It provides that non-qualified persons require the consent of the Land Commission to purchase agricultural land in this State. At the time of enactment, a non-qualified person was anyone other than an Irish citizen, an Irish company or someone habitually resident in the State. Since then, the definition has been expanded to concur with our European Union obligations. However, with continued European Union enlargement, coupled with the fact that consent is rarely, if ever, withheld, the provision appears to do little except increase paperwork and bureaucracy and give rise to unnecessary conveyancing costs. As a consequence, and in conjunction with Government policy on regulatory reform, I propose to remove the requirement for consent.
Question put and agreed to.
Section 13 agreed to.
Title agreed to.
Bill reported without amendment.
I thank the Minister of State and his officials for attending today's meeting and members for their constructive contributions and facilitating consideration of the Bill. I thank the clerk, the support staff, the editors and staff of the Debates Office and the technical staff for their kind assistance.