asked the Minister for Agriculture and Fisheries whether he has made any representations to the EEC regarding the exclusion of the full value of mortgage repayments from the £1,800 per labour unit figure when establishing the income level of development farmers under the farm modernisation scheme.
Ceisteanna—Questions. Oral Answers. - Farm Modernisation Scheme.
15.
Directive 159/72 requires that development farms must be capable of yielding the comparable income after providing for a return on capital invested in the farm business. Following representations in the matter, the minimum levels of return on capital acceptable to the Commission where the capital is not borrowed are 2 per cent in the case of land and 5 per cent in the case of other capital and these rates are provided for in the farm modernisation scheme. Where the capital invested is borrowed, the actual interest, but not the capital element, of the repayments is charged against the farm business before the income figure is calculated.
Would the Minister not concede that a man who has the courage and self-confidence to purchase land or equipment and to enter into a mortgage should not be discouraged but should be actively encouraged and that at the present time a person engaged in a line of farming, whether suckling or store cattle, would find it hard to meet the repayments and still have an income of £1,800 a year?
I appreciate this. We tried very hard to get this income figure reduced but we failed. We wanted a lower income figure than £1,800 but we could not get it accepted in the EEC.
Would it not be possible for our Exchequer to supplement the farmers or to step in?
No. We cannot modify an EEC directive once it has been decided.
The Minister could not answer Deputy Leonard's question across the floor. He tried to do so. Would it not be possible to get a change in regard to the mortgage?
No. Capital is supposed to be adequately remunerated before arriving at this comparable income. That is what was agreed and decided after very long discussion where we tried to get all these things included, where we tried, in fact, to get an income figure much lower than £1,800 but could not get it accepted.
When you take into consideration the benefit that that type of man who circulates money, who is ambitious enough to purchase——
The Deputy does not have to convince me. I agree with him entirely. We tried very hard on this and over a long period. In fact, we held up the directive for a long time on this.
Does the Minister agree that this is a tax on improvements?
Of course, I agree.