Agricultural Credit Bill, 1977: Second Stage.

I move: "That the Bill be now read a Second Time."

The purpose of the Bill is to consolidate the Agricultural Credit Acts, 1927 to 1975, and to make a number of substantive amendments in the existing legislation. Those Acts deal with the objects, constitution, functions and financing of the Agricultural Credit Corporation (ACC) and with the various charges which may be taken on land and other property as security for loans.

Before discussing the Bill I would like to review briefly the work of the ACC. The corporation were established in 1927 to cater for the special credit needs of agriculture, in particular to provide long-term credit which was not readily available from the commercial banks. For many years the level of ACC's business was modest because of the traditional reluctance of farmers to borrow, a reluctance which was due in part to the poor profits in agriculture and the uncertain market opportunities available.

The big change in investment came in the mid-sixties, reflecting the rapid improvement in the agricultural economy and the expectations generated by the prospect of entry into the European Economic Community. ACC themselves gave a considerable impetus to the demand for credit. During the past decade they conducted publicity campaigns in favour of greater investment in farming, they launched a highly successful deposits scheme to help finance their lending and they expanded their organisation to cope with a big increase in business. They established 35 district offices, staffed mainly with agricultural graduates, in order to bring their facilities within easy reach of customers and to maintain close contact with the diverse problems of farmers in the field.

ACC's lendings, which were only £5 million in 1965, increased to £25 million in 1972. They reached £35 million in 1973 and £85 million in 1976. Their lendings for 1977 are likely to rise to £105 million bringing total loans outstanding to £210 million.

The corporation give loans, including hire-purchase facilities, for any purpose which is considered of benefit to agriculture or horticulture, the main demands being for loans for purchase of livestock, land purchase and improvement, buildings and machinery, seeds, grain and fertiliser, working capital, debt funding and family settlements. As well as loans to farmers, accommodation is provided for firms in the agricultural processing industries such as creameries, meat factories and grain mills. Of the £105 million estimated lending in 1977, £90 million will go to farmers and £15 million to the processing industries. Repayment periods vary from one to two years for seasonal loans to 15 years or more for land purchase. Current rates of interest range from 8¾ per cent for seasonal loans payable within one year to 11½ per cent for term loans of ten years and over.

The authorised share capital of the ACC is £10 million all of which has been taken up by the Minister for Finance. They also have outstanding Exchequer loans amounting to £12.5 million and foreign loans totalling £32 million. During the past few years they have financed the bulk of their business through their deposits scheme and repayments on existing loans. The estimated intake of deposits in 1977 is £55 million which will bring the total amount on deposit with the ACC at the end of December to £175 million.

I now proceed to the Bill before the House. As I mentioned at the outset, it is largely a consolidating measure. As legislation is urgently required to increase that statutory limit to which the ACC may borrow, the Government decided to avail of the opportunity to bring up to date the existing legislation on agricultural credit which spans a period of almost 50 years and is dispersed over nine statutes. Most of those statutes now contain several amendments and many provisions are obsolete. In addition it has been decided to include some substantive amendments which I will explain shortly.

The Bill is divided into five parts. Part I—Preliminary and General— contains definitions and conventional provisions about charges on the Central Fund and the payment into the Exchequer of money paid to the Minister pursuant to the Bill. Part II is devoted to the corporation, their objects, powers, constitution and financing and the appointment and superannuation of staff. Part III deals with chattel mortgages taken by the ACC and recognised banks—in practice the bulk of licensed banks. It covers the registration of mortgages, the effect of mortgages in relation to the retention and disposal of stock, the seizure of stock under execution orders and the penalties for breaches of mortgage agreements. Part IV relates to charging provisions on land in respect of loans obtained from the corporation. These include special charging procedures in cases where, for example, land is subject to equitable claims or a prospective borrower is only a tenant for life, the circumstances in which ACC charges can get priority over equitable interests or other land charges, and the extent to which tenants for life and others with limited tenancies may charge their holdings for ACC loans. Part IV also contains provisions whereby the ACC can themselves make orders charging loans on land with the consent of the borrower. Part V contains provisions to facilitate and protect lending by the ACC to agricultural co-operative societies.

I will now refer to the main amendments to existing legislation which are included in the Bill. Sections 8 and 9, which deal with the objects of the corporation, provide for an extension of powers to enable the ACC to give credit facilities for the fisheries industry. It is not envisaged that ACC should compete with An Bord Iascaigh Mhara and other credit agencies in offering such facilities but rather to make provision for the future. The demand for credit for our developing fishery industry may increase to such an extent that it may become necessary to supplement the services of the existing credit agencies. In those circumstances, it would be desirable for the ACC to have the power to provide for the industry.

Section 11 increases the authorised share capital of the corporation to £20 million from the existing limit of £10 million. At present, however, it is not envisaged that the State would increase its investment in the corporation. They are not in need of any further State equity at the moment but it is desirable that the State should have the power to increase its investment if a situation arose in which the corporation unexpectedly found themselves unable to meet their commitments from their normal sources of finance. Section 12 and 14 provide for an increase in the maximum amount which may be borrowed by the corporation and guaranteed by the Minister for Finance. The new maximum of £350 million as against £220 million at present should meet ACC's requirements over the next three years.

Section 15 continues the existing provision under which the corporation may obtain a ministerial guarantee against losses in certain circumstances. Two changes are, however, being made. The ceiling on such guarantees —now £5 million—is increased to £10 million. Secondly, in order to simplify procedures, guarantees will in future be given by the Minister for Finance, instead of the Minister for Agriculture with the consent of the Minister for Finance. Section 23, which deals with the giving of chattel mortgages as security for loans, extends the existing arrangements so as to obviate the need for separate mortgages and separate registration where more than one loan is envisaged for the same borrower over a period. The definitions of both floating and specific chattel mortgages are being extended to permit a single charge to cover both a current advance and future advances.

Section 26 extends the period for registration of chattel mortgages in Circuit Court offices to one month from the existing period of 14 days which has been found to be inadequate. Section 37 contains a wider definition of permanent improvement purposes. There are at present a number of provisions in the Agricultural Credit Acts whereby persons with limited tenancies can charge as security for loans from ACC provided that such loans are obtained for permanent improvements purposes. As defined up to now such purposes are confined to improvements to land and buildings only, whereas other improvements, such as investment in extra livestock or machinery, may also be of permanent value to the land being charged. It has been decided therefore to extend the definition of permanent improvement purposes to include any purpose which will be or is intended to be of permanent or long-term benefit to the farm business conducted on the land. Section 39 and 42 enable the ACC to acquire priority rights over various equitable claims on the land. At present the corporation may avail of this facility only for loans up to a maximum of £10,000. To allow for changes in money values since that limit was fixed the ceiling is being raised to £25,000.

Section 47, which deals with the extent to which tenants for life may charge land for loans from the ACC, contains a new provision to facilitate lending to minor full owners where no trustees have been provided for in the original settlement. Up to now where the ACC were prepared to give a loan to such a person they were precluded from advancing the money to anybody except trustees appointed for the purpose by the courts. It is proposed that in such cases the ACC may, with the consent of the President of the High Court, nominate two suitable persons to receive the loan, such persons becoming trustees solely for the purpose of handling the loan in question. Section 48 contains the existing arrangements under which a personal representative of a deceased person may charge the land of deceased to secure an ACC loan. Under existing legislation the amount involved may not exceed £10,000. The ceiling is now being increased to £25,000 to take account of changes in money values.

Section 54 relates to charging orders whereby the ACC may, with the consent of the borrower, make orders charging the land of the borrower with money advanced by them, or liable to be paid by them on foot of a guarantee. There may be occasions where the ACC would be prepared to give loans which would be unsecured at the date of issue if they knew that, in the event of default in payment, they could proceed to make a charging order in arrear. It is desirable, therefore, to empower the ACC to make such orders in arrear in addition to their present power to make charging orders when the loan is being given. The section provides accordingly. The charging order would, of course, be made only with the consent of the borrower and would take effect only from the date on which it is made, not the date on which the loan was originally advanced. Any priority rights acquired by other lenders in the meantime would not, therefore, be upset.

The Schedule of enactments repealed lists the nine Agricultural Credit Acts which are being subsumed into this comprehensive Bill together with two provisions of the Agricultural Co-operative Societies (Debentures) Act, 1934. The effect of repealing these two provisions is to dispense with the existing requirement that agricultural co-operatives must have the prior consent of the Minister for Agriculture to the issue of debentures. It is considered that this requirement is no longer necessary and tends to duplicate investigations which the lending agencies undertake in any event to determine the credit-worthiness of the customer.

The various amendments to which I have briefly referred are necessarily of a technical nature and I will be glad to elaborate on them when we come to Committee Stage.

In conclusion, the financial provisions in this Bill recognise the prominent and successful role played by the ACC in agricultural development and are designed to enable them to cope with the likely demands on them for credit over the next few years. The changes proposed in the charging provisions are intended solely to simplify administration, leading to a more flexible charging system and more expeditious issue of loans. There is also the advantage that all the legislation on agricultural credit will now be available in a single statue.

Before I finish I would like to pay tribute to the directors and staff of the corporation for their dedication and enterprise in developing their organisation to its present impressive level. The aim must now be to consolidate their position following a period of very rapid expansion while continuing to provide a first-class service to Irish agriculture. I wish them every success. I commend the Bill for the approval of the House.

It goes almost without saying that my party will welcome, as my party has always done, any extension of the facilities available to the agricultural community. This is not a new attitude on our part. It has been part of our character and make-up for over 50 years. On any measures coming before the House designed to assist the agricultural industry we have always had quite a number of knowledgeable, expert and extremely dedicated Deputies willing to contribute to the debate. That will be the position on this Bill.

Given that history and that level of interest on the part of all Deputies in matters agricultural, it seems to me extraordinary that the Minister should come in here with a Bill consisting of 35 pages and 40 sections, possibly more, outside of the Schedule, having issued it a week beforehand without any explanatory memorandum. I do not want to use the word "discourtesy" because I do not think any discourtesy was intended but, of all the parliaments in the world, An Dáil has a higher number of Deputies with an agricultural background than has any other legislative assembly. We are predominantly an agricultural country. It is our major industry. A little thought in coming before the House with a Bill of this size, to facilitate those Deputies who are not actually rural by background but who recognise the importance of and the contribution made by agriculture to the economy, particularly the contribution made by the Agricultural Credit Corporation, would certainly have resulted in the issue of an explanatory memorandum. Such a memorandum would be extremely helpful. I agree the Minister's opening statement was of benefit to the House, but we should all have liked an explanatory memorandum which we would have been able to study before we came into the House.

We all appreciate the importance of agriculture to the economy. We all know the contribution it has made and we willingly agree that it should be subsidised. When we entered the EEC we could foresee the benefits to agriculture that our membership would bring. We foresaw that the quality of our exports could be improved after many years in the doldrums, by necessary injections of capital, expertise, knowledge, dedication and general support.

In the first four years of our EEC membership we had all these qualities devoted to the Department in an almost unknown way by the then Minister, Deputy Clinton. The faith of the farming community and the trust which they willingly placed in Deputy Clinton were realised because he had shoulders broad enough to take that responsibility to the conference tables of Europe where he fought hard for the rights of Irish farmers and for their advancement, which meant the advancement of the whole nation. At that time there was an element of doubt in the minds of farmers but after a short experience of Deputy Clinton's administration our farmers ceased to worry.

The great difference between farming in the 1970s and into the 1980s and in the previous 40 years can be best defined by the difference between television advertisements by the commercial banks in the past and those we have seen more recently, in the past two or three years. Earlier, such advertisements showed well-dressed customers stepping out of big cars in the streets of Dublin. That has changed and the people the banks' advertisements are now directed at are stepping from tractors in Ireland's fields. That is a clear recognition of agriculture as our most important industry and it shows that none of us is far removed from agriculture in some form, that we all have some dung on our boots. Of course in the future we will have our hills and shallow valleys but we will not be subjected to the massive depressions of countries with a less rural background.

The ACC are well positioned to help in the expansion of agriculture, and although it is clear to all why, it is significant that it is the Minister for Finance who is introducing this technical Bill. Deputies D'Arcy, Bruton and Donegan will have a lot to say later about the problems with which this technical Bill will confront the farmers. For my part, I should like to issue a warning vis-à-vis other lending institutions in the State. Some Deputies would suggest that they do not approve of commercial lending institutions and that they should be nationalised, and others would suggest that they can do no wrong. The commercial banks have rights as well as responsibilities.

The Bill indicates a clear understanding of the ACC. It extends the area in which they can lend and it raises lending limitations. It introduces new categories, for instance, fisheries, which I approve of because in a few years fisheries will be seen as a viable and valuable investment area. I do not disapprove of the proposal to allow the ACC to expand their lending functions in new and different types of projects and of increasing the amount they can lend, but I would issue a warning about the possibility of State and semi-State institutions of a banking nature entering areas which the private sector had considered to be their field. There may not necessarily be a conflict, and perhaps it is good that there should be an expansion of interests where the risk is high, but if we were to amalgamate all the State lending agencies into one institution they would form a formidable business for any individual to deal with. I am not disapproving of the IDA, Fóir Teoranta, the ICC and the ACC, but if we are to encourage them to enter the private sector to a larger degree, some form of discussion should be initiated between the banks and the Government in regard to the intentions of these institutions in the future.

The ACC were very necessary when they were established. They were lending money to farmers, large and small, who because of the lack of profitability in farming over almost half a century found it extremely difficult to borrow money from normal commercial sources. That has changed now. Farmers are now sought after as customers by the commercial banks but repayment by farmers in the future will not be so sure. A business approach has been adopted to farming and there is a very much greater risk and very much bigger investment in the hope of a much larger profit. The risk is greater and will become greater still in the future because of the prices at which land is changing hands. In some cases it is sold at over £2,000 an acre. I am not an agricultural economist but having done sums on the basis of yields in the dairy industry it is difficult to see how a profit can be made in some of the areas where land is fetching prices of this order.

The Minister has raised from £10 million to £20 million the issued capital of ACC. There is a section in the Bill which dictates that the number of directors on the board who shall be Minister's appointees will be in accordance with the amount of money held by the Minister. Up to now that has been 100 per cent and therefore the Minister nominated all the directors. I do not know if the Bill will change this but as a matter of curiosity perhaps the Minister will tell us if there will be any change in that regard.

On behalf of my party I welcome this Bill. I will always support anything that gives a better opportunity to provide credit for the agricultural community. They are certainly entitled to it.

I want to put on record here the part played by the ACC in the expansion of the agricultural industry over the past ten or 12 years. It is interesting to note that the amount lent by the ACC has increased from £5 million in 1965 to a projected £105 million in 1977. That is a remarkable increase. They have played a major part in the huge step forward in agriculture during that period. We must increase agricultural output if we are to survive and in order to advance and progress we must provide the where-withal. Credit must be available to the people engaged in our major industry. The amounts of money involved in agriculture are huge and improvements must be made if we are to benefit from our membership of the EEC and reach our potential in providing jobs.

I often think that Bills of this kind do not go far enough. In general, my experience of the ACC has been good but the small farmer very often finds it impossible to get credit from the ACC, though he has proved himself an excellent farmer. Because he has not got sufficient land to give a guarantee he finds a reluctance on the part of the ACC to give him a loan. He lacks the collateral to borrow the money he needs to make his enterprise viable. I would ask the ACC to consider that kind of person and to take into account his past record. Money should be available to enable people to improve their holdings and for the replacement and improvement of stock. It is my personal experience that even people with a sizeable amount of land sometimes find it hard to get recognition from the ACC.

I welcome the inclusion of the fishing industry because it will need huge financing in the years to come. I also welcome the fact that the ACC can lend money to co-operatives and meat factories and food processing establishments of all kinds. It cannot be emphasised enough that we must develop the potential for employment in this sector if we are to make any impact on our unemployment problem.

I welcome the statement in the Fianna Fáil manifesto that our produce should be processed at home. I take it to mean that it is lunacy for us to export live cattle and that money should be available to expand the meat industry and to establish new industries related to agriculture. They may be small industries but they will survive because they are the backbone of agriculture which is traditional in our rural society. I do not believe that private enterprise is capable of this type of operation but if it is prepared to undertake the job its efforts would be welcomed by me. I agree with Deputy Barry than an explanatory memorandum would have been helpful with a Bill of this size. At the same time I believe the Bill had to be introduced now.

The Minister should ensure that money is made available for the development of agriculture. There is no doubt that small farmers are capable of increasing their production if they are given credit. In the past, the ACC have been slow to give credit to small farmers. The ACC should consider all types of farming in relation to credit facilities. If farmers were given credit they would increase their herds and their land and thus create more employment.

I welcome the Bill and assure the Minister that my party will support it.

I welcome the Bill because it will go a long way towards consolidating the previous Bills. As the Minister rightly pointed out, the ACC came to life in the mid-sixties. Before that, they extended little credit and their approach to examining the creditworthiness of farmers was pathetic. They used to send confidential reports to the local Garda barracks and this stopped many farmers from applying for credit. The attitude of farmers at that time was that the ACC were the last straw. In the mid-sixties it was realised that a system of long-term payments was needed by farmers. At that time the banks changed their policies to suit the money market and farmers' overdrafts were called in for no apparent reason. In 1960, the then Minister for Agriculture saw that there was potential in farming and that the industry needed a system of finance that was in keeping with it. At that time there were also management changes in the ACC. They realised the needs of the farmer and opened branch offices throughout the country. They now have 35 branches and most of them are staffed by agricultural advisers. This was a wise decision because most farmers seeking loans considered the agricultural adviser to be their friend. An expansion in agriculture followed a £5 million loan in 1965. When I first came into this House the figure was only £1½ million. In 1965, the upgrading of ACC had begun. This year it is expected that their loans will total £200 million.

The one-year loan scheme for fertilisers and grain has been a great boon to farmers. Many grain merchants charge double interest for six months' credit but the one-year loan scheme has helped farmers to buy their supplies at the keenest prices. There is a great difference between the list price and what one can bargain for because a merchant must get in a certain amount of cash in spring time due to the amount of credit he has to obtain from financial institutions.

I am glad the family settlements have been reintroduced in the agreements with the ACC. They were introduced in the sixties but were withdrawn some years later and nothing was given for family settlements. That was a mistake. Very often members of a family, a mother, father or sister must be settled when a farm is taken over by a young man. It is only right that they should receive a reasonable weekly income. In Denmark, Sweden and other countries, when a father or mother hand over a holding to a son it is done on a financial basis. The Minister has told us that of the £105 million estimated lending of the ACC in 1977, £90 million will go to farmers and £15 million to the processing industries. That looks good on paper but many of the meat processing industries are in a position to get money from the ordinary banking institutions. It is my view that the £15 million is allocated to very few industries. I am aware that it has gone to companies that have been involved in processing for many years and have had good facilities with banks. The ACC should examine the question of loans to the processing industry particularly if there is a danger that farmers will be left short. The situation is different in relation to the co-ops. Because they are run by farmers it is only natural that they should approach the ACC for money.

The Minister has told us that the Bill deals with chattel mortgages taken by the ACC and recognised banks. If we are to expand long-term leasing of land that is necessary. The person without land or a farmer's son will now be given an opportunity of going into farming with a chance of having land for a reasonable number of years. Unless he has the money to purchase the land he will not have great security and for that reason such chattel mortgages are necessary. They are based on a farmer's ability and credit-worthiness. In view of the high cost of land the chances of such young men getting involved in agriculture are poor unless through the system of leasing for a number of years. This provision will be of great assistance to the people in the west because it takes some time to get title in order there. More than 60 per cent of the land in that province is owned by people of 55 years of age and upwards and this provision will be of great benefit to those who succeed such people.

The ACC have done more than the Land Commission in getting farmers up to economic status. In many cases the banks did not give assistance to the farmers at the same rate the ACC did. The ACC gave an opportunity to small farmers to buy land and improve their holding without having to wait for the Land Commission to divide a farm. The fact that the ACC make money available to farmers to improve their holdings means that the process of division is speeded up. Farmers welcome the fact that when they obtain a long-term loan from the ACC they are not compelled to make the first repayment for a long period. That gives them an opportunity of getting some profit on the money they have invested in the farm. We all know that it takes some time to get any return from an investment in agriculture and the ACC recognise that also. They know the needs of the agricultural community. This Bill covers the likely demands for agricultural credit over the next few years.

The ACC have been setting a pattern for lending procedures to agriculture. They have staffed their offices with agricultural advisers mainly. The main banks have been following suit. They have taken on quite a number of agricultural graduates to advise them and to advise farmers getting loans from the banks. The ACC have been the pace-setters in the field of credit to agriculture. They have come a long way since the early 1960s. This Bill provides the money for the ACC who will set a headline for agriculture over the next few years.

I welcome this Bill. We have come a long way since the time when the present Taoiseach as Minister for Finance refused to guarantee that he would provide a sum of £1.6 million if it was not forthcoming from other sources. He change his tune between Question Time and a question on the adjournment and gave that guarantee. At that time, we were talking about figures like £1 million and £1.6 million. Now much larger sums of money are involved.

Every praise should be given to the Agricultural Credit Corporation. They have many notable firsts to their credit. They were the first semi-State company to go out into the market and ask for investment. They have been extremely successful in this field, far more successful than their counterparts in the Industrial Credit Company. They were the first to decentralise and open offices for lending and borrowing and normal banking business in all the major towns. This has been a real success story.

They were the first to offer loan facilities to farmers on a spring to autumn basis for the purchase of seeds and fertilisers for cash. Therefore the farmer was the boss and he could go into the merchant and say: "I am here with cash. What is your lowest price?" That was a great move forward, and one on which we should congratulate the ACC. They were the first to offer long-term banking facilities with consequent lower repayments. They were the first to extend banking facilities to farmers without deposit of deeds for security. Deputy Crinion mentioned the 18 months moratorium. Under that scheme a farmer who got a loan from the ACC did not have to pay both principal and interest for the first 18 months. That enabled the farmer to get on his feet. He knew that for 18 months all he had to pay was the interest charge.

Some years ago the then Taoiseach and the then Minister for Finance said that loans must not be made unless the documents were deposited within three months. Happily that never came to pass. At that time, those gentlemen were described in private as a pair of welching bookmakers if they made the people do that. The House knows how long documents can lie in solicitors' offices before the business is finally signed, sealed and delivered. That is now water under the bridge and the customer who deals with the ACC knows that, on average, he will get a better deal with the ACC than with the commercial banks.

It is also worthy of note that the ACC were the first to lend money on chattel mortgage loans, thereby leaving the deeds of borrowers available for deposit elsewhere, and thereby increasing spectacularly the borrowing capacity of the company or the individual concerned. This was a very big step forward. I remember going in to a man—no names no pack drill —who was then the secretary of the ACC. He said to me: "Mr. Donegan, you know what will happen if you do not repay your chattel mortgage." I said: "I do. I go to jail." He said: "Yes, and so do I." It is of great benefit that we have the chattel mortgage situation as it is today.

There is still a reluctance on the part of some farmers and co-operatives to borrow money from the ACC even from spring to harvest. That is wrong. Perhaps it relates to the dreadful experiences during the Economic War. Those experiences should be set aside and our land should be farmed to its maximum capacity. The banks did not like the ACC going into their field and made their views known very clearly. In that climate the ACC had to expand.

There were occasions when the Minister for Finance of the time put the brake on and, after 18 months or so, realised he was wrong, took off the brake and pressed the accelerator. We do not want that stop-go policy in Irish agriculture. We must have a continuing process of increased production, and farmers must be allowed to increase their production in a very obvious profit situation. Continuity in lending is highly important. Putting the load where it should be, on the backs of the farmers, is highly important also.

There is only one man living today who went through the whole course. He was there when the ACC opened their first office and happily he is still with us. It is proper that I should recall that at this time. He served the ACC with honour and brilliance for 50 years. He is a striking example of the high quality of the staff of the ACC over that whole 50-year period. We wish him well, and many happy years.

This will not be the last time the Minister for Finance will have to come back to the House to amend this legislation. I look forward to the ACC expanding and expanding again and taking their place as one of the major finance houses of this State.

I will be very brief. I could not let this occasion pass without welcoming this Bill. Any farmer who would not welcome the Bill, which will co-ordinate the work of the ACC, and who would let it go without saying a few words in praise of what the ACC have done for Irish farming, is not worthy of the name farmer. Comments have been made here today about lending and borrowing. Some of us who started the co-operative movement in the western regions, where there was not much confidence, know we had to depend on the ACC to get going.

I remember going to the ACC looking for money for a co-operative and I was told we were not as credit-worthy as a private company. I had a little bother in trying to convince them we were. They said members of co-operatives were unpaid, while members of companies were paid; a man would take an interest in his company if his salary was at stake but, while committee members of co-operatives were bursting with enthusiasm in the initial stages, when management was appointed, and so on, quite naturally they lost interest because they were unpaid. Eventually we convinced them that was not so.

We got them interest in the co-operative movement. At that time co-operatives had a lean time in the west. Some of the commercial banks said they were great while the going was good. As Deputy Donegan said, there was a stop-go policy and the squeeze was put on very quickly. I am associated with co-operatives which would not be open today were it not for the ACC. Banks closed their accounts. You had these ups and downs and this is where the ACC have been a great addition to the farmer. I am glad that the Minister also stated that it may be necessary for the State to come in and that they can come in if necessary under this Bill to assist the ACC in providing a service which is very important to farmers.

Deputy Bermingham rightly mentioned the question of finance for small farmers which is very relevant in my area. I have always held that it is not the amount of security in land or money that a man has which should determine his eligibility for a loan. That is why I say it is very important that the ACC and all lending agencies should have—as they now have—qualified agricultural advisers to judge the ability of the man, not on the acreage he owns but on himself. In fairness to the ACC, from my experience, it did not matter if a man had not great security in land, if they thought he was a good man and doing a good job they would give him the money. This must be emphasised because you can get a man with a very small acreage who is a go-ahead type and will succeed whereas you can get a very wealthy man to whom you can give all the money in the country and he will let it go down the drain. Recently, all lenders are judging the man more on himself than on his security at the time he seeks the loan. I have had very close association with the ACC and I must give them credit for the fact that when you bring them somebody you think is a good man they are very sympathetic as regards loans.

The annual loan for fertilisers and seed is an excellent idea. An ambitious man can get the loan, pay it back and borrow again as mentioned by Deputy Crinion. This is a very big Bill and although the Minister did not issue a lengthy memorandum, he condensed it in his speech which covered all the main points. We can go into it section by section on Committee Stage. The Minister dealt with the principal items about which we wanted information. We are delighted that this Bill is brought in to consolidate the ACC. We know that the ACC will be there in the future to finance farmers and that they need not fear to borrow. All farmers fear borrowing for the simple reason that they had sad experience in the past. I am a little older than some Deputies here and I must say that the commercial banks came in when the going was good. When we were setting up marts these banks were vying with each other in putting money into them. But suddenly a bank squeeze came and people who had been prepared to get money and put it into bricks and mortar were in difficulty. We set up a committee to advise them to be careful where they spent their money. I was a member of that umbrella committee. When the banks put on the squeeze the ACC helped many people. That is why I say that without the ACC there would not be the same confidence among farmers. The banks are providing an ideal service but they might squeeze at a time when it would not suit the farmer. That is why every Deputy who has spoken so far has praised the ACC.

My association with the ACC was always in regard to borrowing money, not paying it back and I must give them due credit. We are on our feet now in the co-operative movement in the west but we were in the red for a long time and did now know when we would be closed down. We always had to go back to the ACC and every time we did so if we put up a pretty good case, even though it meant heavy borrowing, we got the money. It would be unfair if I did not make known the way the ACC treated the co-operative movement and the small farmers. I want them to continue in that way for the benefit of small farmers who want money to buy machinery. I have no doubt these people will continue to get money from the ACC as they are doing.

I refrain from repeating much of what Deputy Crinion said. I am very pleased at what the farmers are doing with the money they get from the ACC but I am not happy with the processing side of the business. I am not satisfied the processors of agricultural produce are efficient; if they were, they should be able to pay a better price to the producer and nothing would be exported on the hoof. I have very strong views on this. It is the Government's aim to process every bit of farm produce but farmers must be paid a competitive price for it. At present people can buy it on the hoof and process it abroad and this is what I am not happy about. As regards the use farmers are making of the money from ACC, this can be seen throughout the country. I welcome this Bill in a big way.

I also welcome the Bill. In doing so may I say that it would have been a great help if we had an explanatory document before us. However, we shall have another opportunity to discuss the various sections. The ACC have given farmers confidence and hope. Changes must be made to cater for future needs in order to streamline operations, to modernise them and make them attractive to prospective borrowers. The ACC have a very well qualified staff as far as agriculture is concerned, particularly at ground level. One of the farmer's greatest difficulties for many years was the lack of experienced and qualified staff to deal effectively with loans for different farm enterprises. This vacuum has now been filled by ACC. Their system of inspection on the farms gives them firsthand information when assessing the credibility of farmers. I compliment the staff both in the country and in the head office. In the country, because of their experience they can give valuable advice on how money should be borrowed. Their visits bring ACC right on to the farm and this is essential to-day. They adopt a very humane approach. The old conservative image of head office and the old civil service attitude have gone. It was not easy to borrow money at one time from the ACC. Now, even an ordinary farmer can telephone the head office and this is necessary. If he finds the going difficult, he can approach head office and that is as it should be.

One of the great steps forward in recent years has been cheque issuing at local level. This was necessary because the farmer borrowing money for any purpose could not afford a long delay before he received his cheque. Up to this all applications were made at local level, they were then transported to Dublin and processed there. Small problems then went into the melting pot and there were long delays before people finally received the go-ahead or their cheques for whatever they needed them for. This was red tape procedure. I am glad to see this has now ceased and that we have cheques issued from local offices where any farmer can get the necessary funds, no matter how big. The regional manager has authority to issue £40,000, the county officer £20,000 and an area officer £10,000. This indicates the amount of authority that was handed down from the top to those actually working in the field with the farmers. They can now process the applications and issue cheques up to those amounts if they consider the particular farmers are creditworthy.

I am rather disappointed at some of the provision in the Bill. We should have passbooks in the ACC for depositors. I always believed this was necessary during my time as director of ACC. I am prepared to accept that the larger depositors are well catered for. Small depositors, whether they be farmers or other people in our towns throughout the country, who are prepared to avail of the Government guarantee and the attractive interest rates, should be issued with passbooks by the ACC. This would attract more savings which would substantially increase the funds of the ACC.

The ACC should be allowed operate current account facilities. This is a very big step which I believe will have to be taken by the ACC during the next few years. The Minister will receive great opposition to this measure from the commercial banks. There is lots of room for the ACC with current account facilities and also for commercial banks with current account facilities. I believe that great benefits can be obtained from current account facilities in many cases where large sums of money in current accounts are not being used and no interest is being paid on them. I believe this is the more lucrative area as far as the commercial banks are concerned. The ACC should be given the same benefits because they are now in competition with the commercial banks. The Government are the biggest shareholders but they do not help with interest rates or they do not help with money. The ACC have to go on the open market when they require money. They must buy their funds on the money market or in deposits. I believe they should be given the same benefits as the commercial banks in relation to current account facilities.

We always live in the shadow of a bank strike. I believe the bitter experience of 1970 and, to a lesser degree the experience of 1976, has not yet diminished. Severe scars were left in many areas. A lot of innocent people had to suffer. It is essential, from a national point of view, that an alternative banking system be made available for farmers and for other sections of the community in the event of a bank strike. The ACC are now in the process of providing a network of offices throughout the country which will enable them to offer an alternative banking system to all sectors of the community.

During the 1976 bank strike the ACC were widely used by firms for their deposits or for obtaining money to pay staff in their factories or firms backed up by guaranteed cheques and for a variety of other purposes. Everybody realises the risk of holding large sums of money on business premises or in private houses. People are inclined to lodge money outside the country in the absence of an alternative system. This happened during both bank strikes when money was lodged in England and Northern Ireland. Large sums of this money did not return to the country. That is another reason why an alternative should be available when a bank strike occurs so that other sections of the community, apart from farmers, who deposit large sums of money, would have an alternative banking system.

It is absolutely essential when the ACC are engaged in building premises all over the country that they provide facilities in them for safes, the same as commercial banks, and that they have facilities to carry out current transactions. I will welcome the day when the Minister comes back with such proposals to the Dáil. Current account facilities would give greater profitability which would in turn find its way back to the production lines on farms and put the ACC on a competitive basis with other money lending institutions. Cheaper funds would then be available for the future development of agriculture.

I believe the development of our small farms needs immediate attention. The greatest impact can be made here by the proper investment of money on the production side. Deputy Bermingham said he was slightly disappointed with the operations of ACC with regard to small farmers. My experience has been directly the opposite. If it were not for the ACC over the past ten to 12 years our small farmers would have been in a very difficult position because they had not the capacity to borrow. Any bank manager will look at the capacity of that man to borrow money. Things might be difficult in the case of small farmer, with 40 to 50 acres and family commitments, walking into a bank manager and asking for a loan of £10,000 or £15,000. Such a man had no hope of obtaining that loan. Things might be different today.

The ACC have set the headlines as far as the small farmer section of the community are concerned. They have given those people the necessary credit during the past ten years. There is need for investment in that area. The time has come when assessment of the potential development of small farmers working on very low incomes under the farm modernisation scheme must be looked at. When these plans are ready there must be no delay in providing the money for their implementation. These are plans that are backed up by grants from the EEC. I trust that the farm retirement scheme, too, gets off the ground at the next review. It is then that the ACC will be needed to provide money, first, for capital investment and, secondly, for the purchase of land in order to make these small holdings viable.

Production enterprises on small farms would result in much benefit to the whole economy. Sooner or later the interest rates applicable to small farmers in respect of borrowings will have to be subsidised in some way. At the moment interest rates are favourable but in so far as the ACC and the commercial banks are concerned we need only think back one year when interest rates were at levels of 14, 15, 16 and in some cases 17½ per cent. It would seem that interest rates are on the climb again in England so it is reasonable to assume that whatever happens there in this respect will happen here also within a short time. Small farmers cannot afford high rates of interest. It has always been my opinion that small farmers requiring large amounts of capital, whether that capital be for the purchase of land or for capital investment in housing, the latter being non-productive, should be able to borrow on a long-term basis and also at rates that are static.

It is only right that the ACC should be in the position of being able to vary their interest rates. I recall, from my experience on the board, a sum of £30 million being on loan at rates of 6 or 7 per cent. The people who had that money were aware that if they re-applied to the ACC their interest rates might be changed. Consequently, if they needed more money they would borrow from the commercial banks. However, that interest rate had to be carried by the borrowers who came afterwards. I am glad that the ACC have taken the necessary step in this regard. At any rate, the small farmer cannot afford the sort of interest rates that applied in, say the second half of 1976.

I would draw the Minister's attention to sections 27 and 28 which deal with the question of a chattel mortgage. I am not satisfied with the terms in this regard but I understand that there will be an opportunity later for tabling amendments.

Yes, on Committee Stage.

In the meantime I would ask the Minister to bear in mind the iniquitous situation which provides for the buying of cattle on a chattel mortgage. Rather, permission to borrow should be based, first, on the confidence of the prospective borrower, secondly, on the trust that the corporation place in him and, thirdly on his farming record. In addition there is the point which embraces all of these, that is, the man's credit-worthiness. Consequently, I am suggesting that the provision in this regard be watered down. It is not good enough that a person who wishes to sell, say, six or seven cattle out of a number that have been purchased by way of a chattel mortgage, must give seven days notice of his intention to the ACC. In general I cannot find much wrong with the Bill but this specific provision is objectionable. Borrowers must be capable of being trusted.

An area officer can have up to 600 files relating to farmers in his area. This gives some idea of the amount of work involved both for the officer and for his staff. Of the people on his books up to 250 might have loans on a chattel mortgage basis. It is not difficult to conceive of a situation in which the officer on the occasion of a sale in his area would have up to 50 applications for sanction to sell. A huge amount of time would be involved, first, in examining the applications and, secondly, in giving the necessary authority. One can think of a situation in which a person would buy 80 cattle. That would involve big money as the animals would cost about £400 each. If the occasion arose that he wished to sell 20 of those cattle, he should be able to go ahead and, perhaps, replace them with 20 more. Some cattle fatten quicker than others. In any case, a person in such a situation should not have to go to his local ACC office each time he wished to sell off some of the cattle. This situation complicates matters not only for the farmer but for the local officer and for the ACC.

The Minister said that the changing provisions are intended solely to simplify administration, thereby leading to a more flexible charging system and to a more expeditious issuing of loans. How can the Minister reconcile that sentence with the provision in respect of a chattel mortgage? Instead of the section simplifying matters it is complicating them.

Is that section not dealing with the seizure of stock rather than with the making of loans?

I would not agree. Section 27 (3) reads that:

If the mortgagor under a specific chattel mortgage—

(a) sells or otherwise transfer the ownership or possession of stock which is the subject of the mortgage without having given to the mortgagee at least 7 days' previous notice in writing of his intention to effect the sale or transfer....

In other words, he must go through the ACC before effecting any change in his stock. Is that clear to the Minister?

Yes, but it is not the making of loans that is dealt with.

That may be so but it concerns the operation involved in the granting of loans. It has been stated here that farmers are going to the ACC in large numbers to borrow the full cost of manures, seeds and so on, on a one-year basis. The bulk of this money is unsecured. I accept that there is a risk of security in this but that is not the only area in which there is risk. If a man borrows to buy, say, manure, he will apply the manure to the ground. Subsequently, a crop is sown and in due course the grain is sent to the merchant. There is no guarantee of the repaying of the money borrowed. There should be the same flexibility in respect of the buying of cattle by way of chattel mortgage.

I welcome the section relating to the charges on deeds. It is difficult to follow the text of the Bill and apply it accordingly. This was a bottleneck in ACC over a number of years. At one time they were very conscious about securities. That has been relaxed and this section will relax it even more. People applied for loans. Although the loans were granted, they had to get a bridging loan. There was a snag there. The bridging loan was given at 1 per cent or 2 per cent higher than the loan rate. This meant that the farmer had to use the bridging loan and pay a higher rate of interest until such time as the full charge was put on his deeds.

As we all know, these deeds get seriously bogged down in solicitors' offices. If there is any snag, no matter how small, it can be a very slow process to have the charge put on the deeds. I have known cases where it took as long as a year to put the charge on the deeds. That unfortunate farmer had to pay the extra 2 per cent on the bridging loan instead of starting to make his repayments on the loan proper. Therefore, I welcome this section, which I hope will relieve this bottleneck.

I accept that if deeds are not in order the ACC have to be careful about handing out loans. In the majority of cases these will be reasonably in order. It should take only about a three month period to put a loan through the registration office and get the charge put on the deeds.

I want to praise the ACC for the development loan scheme which has a one year moratorium. This was a good and sound move so far as lending money to farmers was concerned. If a farmer borrowed from other people, he would suddenly realise that the six month period had passed and he would have to repay the money borrowed. This new scheme which can be attached to the farm modernisation scheme is one of the best ever introduced. This scheme has been "flying" over the last year.

The corporation are asking for an increase of the amount of money they can borrow at one time from £220,000 to £350,000. This is very significant and indicates the growth expected over the next few years. The corporation are becoming one of the most powerful institutions in the State. From time to time people complain about the way semi-State bodies are run. From my experience in ACC I can assure the House that there is no laxity as far as the staff there are concerned and there is a very good working atmosphere. In my view this must benefit agriculture.

I hope the Minister and the Department will continue with the expansion and development of the ACC across the country, with particular reference to the local offices in most major towns. This policy is vital to the needs of agriculture. The ACC have 45 offices—I am subject to correction on that figure—across the country. The Minister should give every encouragement for the development of this corporation. I look forward to the day when he comes back to the Dáil for current account facilities for the Agricultural Credit Corporation. He will then put them in a very sound position, thereby benefiting the farming community and the country as a whole.

As the Minister stated in his opening remarks, this Bill is designed to consolidate the Agricultural Credit Acts, 1927 to 1975, and rightly so. We live in an era of quick and decisive change. Our greatest single national industry must be geared to meet the challenge of the future. The ACC will have to play their full role in advancing the needs of the agricultural community if they are to make the real impact on Europe that many people expect. Therefore, I welcome the opportunity to make a few comments on the Bill.

I was disappointed that greater emphasis had not been laid on the role of the small farmer in Irish society and his ability to play his part in the furtherance of our greatest export industry. I was also disappointed that some effort had not been made to ensure that the small farmer received preferential treatment by way of loans to enable him to consolidate his holding and provide a more viable holding for himself and his family. In my view there is need for something of that nature to be done. There is need to make secure as many farming families as possible because of the contribution they can make to society and to our export industry. It must be remembered that agriculture is our greatest export industry because of the availability of raw materials from our soil. Other industries have made a great impact on our economy in recent years, but agriculture has presented us with our greatest opportunity for many years. This is because of our entry into Europe and because of our access to a market of millions of people, something which was denied to the farming community in the past. I would like to see decisions being taken now that would ensure that the small farmer is given every opportunity to play a greater role in agricultural production.

It is often said that agriculture is only a secondary industry. When one remembers the amount earned from agricultural exports in recent years, one realises that this industry must be geared and modernised in every way possible to meet the challenges of the future. We all know that the farming community have come a long way in recent years and that new market outlets have been responsible for that. Everybody knows agriculture is an industry which must face the challenge of the future and be prepared to overcome many obstacles.

We should remember the situation which existed here in 1974 when there was a crisis in agriculture. I was disappointed on that occasion to see that the Agricultural Credit Corporation made special efforts to collect the instalments which were due by borrowers. They did not take into consideration the crisis situation then and many small farmers went by the board in 1974 when they were unable to meet their commitments. Their inability in 1974 has prevented many of them from getting further loans in order to make progress. A second chance must be given to ambitious farmers who want to carry out a programme defined by themselves in conjunction with the local agricultural officer. It is gratifying to know that so many people are involved in assisting the farmer to achieve the maximum return for the money borrowed. In the old days he had to depend on his ability. That situation has changed now, he can consult with his local agricultural adviser and they can work out a programme geared to obtain for the farmer a maximum return for the money borrowed that will enable him to meet his repayments as they become available. Unfortunately disease and crop failure and so on can prevent a farmer from meeting his commitments. Greater emphasis must be laid on giving a farmer who defaults another opportunity. From my experience in dealing with the ACC I know that sons of farmers who defaulted are still regarded as a risk. There is need for change. No son should be blamed because of his father's inability to meet his commitments. These areas are worthy of consideration.

Another area worthy of consideration is the marketing arrangements we have in this free sale area. Unfortunately, when a small farmer discovers that a patch of land is becoming available and feels that it is within his grasp to purchase the land he is outbid by a bigger farmer who has access to greater financial resources so the small farmer must go back to his original situation. He must remain an inviable unit of production because of his inability to compete with the bigger farmers. The time has come when price control will have to be introduced. As we all know, land prices in Ireland are the highest in Europe. Prices must be related to the production which can be secured from agriculture.

The Agricultural Credit Corporation have been of service. They have played their role in the agricultural industry and the greatest step that they took was their decision to devolve. The method of devolution on the part of the ACC was timely. This devolution came at a time when greater focus was being beamed on agriculture and the local office has been a wonderful asset to the agricultural community. It has personalised the method of borrowing. The official in the local office personally can get to know borrowers, their ability and their potential. The introduction of the local office was a useful exercise. After 50 years I hope that the ACC will continue to serve the community and I hope that at some future date efforts will be made to give preferential treatment to small farmers.

I too welcome this Bill. I particularly welcome the measure which increases the share capital from £10 million to £20 million. This is a valuable step. I also welcome the increase in borrowing powers which are guaranteed by the Minister from £220 million to £350 million. This is in keeping with the greater intensification in agriculture in all its many facets The other aspect which I identify in this Bill is the simplification of security. Traditionally one was only allowed to borrow up to the value of two-thirds of the value of the land held. This has been loosened to some extent in recent years, but certainly in this Bill I see a conscious effort to simplify the kinds of security required. I see increased emphasis on the project, on the man, on the management and on the enterprise. These are very welcome and timely measures in the development of the work of the ACC.

I welcome the provisions which allow for an expanded involvement in the whole area of agricultural business. In this day and age we have major quasi-industrial projects in processing and marketing and in co-operative development which offer the greatest job potential and I am very glad to see the Minister taking this measure in relation to the position of the ACC. They will in effect be able to cater for this kind of development adequately.

Deputy Barry sounded a word of caution about the ACC in relation to the banks. Traditionally the ACC have fulfilled the role for which they were originally established. If we consider why we have the ACC, we will identify that the ACC deal generally with the higher risk areas in agriculture. They have always been a stand-by for the farmer and grower in periods of depression, when the banks may be influenced by other factors outside the country or outside the Government policy of the day. I see the ACC as an instrument assisting the Government in achieving their policies. I also see the work of the ACC as a major factor in providing stability and in overcoming the stop-go policies which bedevilled agriculture for so many years. The ACC have on many occasions stimulated the banks to participate with the farming community and have in that sense had a very beneficial effect on the total availability of borrowing for the industry.

The ACC have played a major role in national policy. I join with the Minister for Finance in commending the ACC and the work which has been done over the years and on their development in relation to the needs of the farming community. The ACC have played a very major part in the structural development of agriculture. The ACC's policy in recent years has been to develop farms to the level of 100 acres. It is interesting to note that in a 1976 survey of 2,000 farms in which borrowing was done through the ACC, the average acreage of borrowers had risen to 66 acres, and the average of new loans indicated further expansion on average of 33 acres, bringing the sort of thing which is happening within the ACC in relation to farm size very close to the objectives.

From that survey it is self-evident that the ACC have had a major influence on the structural development of Irish farming. They have pioneered several measures, such as the special encouragement to family farm settlements for periods up to 25 years. Deputy D'Arcy has mentioned the one-year moratorium on development loan repayments. I join with him in commending this measure which emphasises the development-oriented approach of the ACC in recent years and the encouragement they have given in a phased way to commercial development and also to transitional farmers. I also commend the work done by the many agricultural graduates employed in the ACC and those who worked in conjunction with the ACC in achieving their targets.

Deputy Bermingham has said that he hopes Fianna Fáil are serious about their promises to support the maximum home processing of farm products. In this connection the measures here are very valuable. Firstly in relation to the development work of the ACC I want to see a new emphasis on intensification in agriculture, and this Bill will provide the basis for that. There is a need for greater output from existing farms and horticultural holdings, so intensification in agriculture must be matched by similar developments within the ACC. These are provided for in the Bill. The second major development I would like to see is that of agri-business. I welcome the provision in Part V to facilitate and protect lending by the ACC to agriculture and horticultural co-operatives. This would be a major development, and as an instrument in policy I would welcome greater involvement by these co-operatives in the development of intensive agriculture. This will involve both greater responsibility on the part of the people in the co-operatives and backing from the Government such as is being provided in this Bill through the provision and making available of the necessary capital to the people in the co-operatives. I also welcome the provision in sections 8 and 9 which extends the power to enable the ACC to give credit facilities to the fishery industry. This is a very viable measure and an area which we hope will help considerably in job creation, which all parties here support.

I want to see rapid development in the agri-business sector of the ACC to develop the processing, marketing and other intensive areas in agriculture. I want to see a comprehensive agri-business division, with broad staffing, in the ACC. I am aware that such a division has existed for the past few years. I would like to see its operation broadened and deepened to include broader staffing with specialists in dairy science, agriculture and other related disciplines. Finally, I would like to see a development parallel to the measure given in this Bill to provide for agri-business as the IDA provide for Irish industry. How that should be provided is a matter for further discussion.

I commend the Minister on this Bill and I welcome it.

I join with other speakers in welcoming this legislation. Particularly I welcome the fact that it is a consolidating Bill. The officials of the Department of Finance, the Minister and his predecessor are to be complimented on bringing forward legislation in this form. All who will be concerned with reading statutes will realise that amending legislation which does not consolidate makes life very difficult and probably costs a great deal of time, which is valuable, in offices throughout the country in going back on previous legislation. That is all costing money. The fact that the Government have brought forward a consolidating Bill on this occasion is something which should not be allowed to pass without a few complimentary words.

When one is bringing in new legislation, as I know from my experience in office, the temptation is to go for amending legislation because usually you can get that through the parliamentary draftsman's office more quickly than you can if you go for consolidating legislation. This is one of the problems we are always encountering, because the Government are under pressure at all times to provide legislation fast and if they go for consolidation they are not able to do that. One of the reasons the Government have been able to produce consolidating legislation on this occasion is that the number of new measures being implemented in this Bill is not so very great. The major part of the Bill is really just re-enacting existing legislation.

The Agricultural Credit Corporation's story since the passing of the Agricultural Credit Act in 1961 has been one of the success stories of Irish agriculture. Their regional office and the development of a generally expansionist attitude to farming and farm credit has had an immense effect on agriculture. The traditional attitude on the land of owing no man anything was one which did not allow agricultural progress to take place and did not allow the same business-like approach to be applied to agriculture as should be applied in other areas of the economy. That is no longer the case. Farmers now realise that if they are to expand and get the maximum return from their land they must be prepared to borrow, and borrow significant amounts of money. It is fair to say that in the owner-occupancy type of agriculture we have here, where the farmer who is working the land owns it and has security for his loan. the availability of credit is rarely a problem, because any lending institution is aware that they have the ultimate sanction in order to get their money back. Therefore if the farmer comes up with a reasonable proposal he should not have too much difficulty in obtaining credit. However, it is very important that the credit be in a form that takes proper account of the nature of farming business. The problems of the farming business are not the same as those of other businesses. The commercial banks, who are the competitors of the ACC, in the policies that they are adopting in relation to the application of term loans through agriculture are not taking account of the peculiar problems that face farmers. To tell a farmer that he must extinguish entirely all his indebtedness on a particular day, as is the case with a term loan, and then start afresh with a completely new loan after that day, does not take account of the nature of an agricultural business. It is not like a business where there is a period when one is selling everything and, having sold it, can afford to pay off all debts entirely and get into the black. Agriculture is a continuing process and at no time can it be said that the farmer is in a position to extinguish all his debts. I do not believe that the ACC would in any sense act in an unsympathetic manner, but it is important that the commercial banks should have a look at their policy in this regard.

Another very welcome aspect of the development of the ACC has been the fact that a very substantial proportion of their total finance is coming from deposits from the members of the Irish community, including a substantial number of farmers. Therefore the need for Exchequer loans and foreign borrowing, neither of which is the most desirable way of financing agricultural expansion, is significantly reduced by the fact that the ACC seek to attract money on deposit from the community, from members of the community who realise that not only are they guaranteed a good return on their money by the Agricultural Credit Corporation but they are also, as the ACC themselves tell us, contributing significantly to the development of our major industry. That is something in which we, as a people, should take considerable pride, that the members of our public have that degree of confidence in agriculture.

There are a few small points I should like to pass on to in relation to the text of the Bill. Section 14 refers to guarantees and the various requirements imposed on the Minister in respect of laying the particulars of each guarantee before this House. This is a matter I have had occasion to raise in respect of guarantees given by the Minister to another State body. I shall not go into that on this occasion. However, it is important we should ensure that full particulars of the guarantee, setting out all the details, are laid before the House and that the provisions of this section are complied with in full. We must realise that in the event of these guarantees having to be used a very significant, contingent liability would fall on the Exchequer and on the taxpayers whom we, as Members of this House, represent. I should like to ask the Minister for Finance for some indication of his general view about guarantees and the amount of money for which he is presently contingently liable. Is he satisfied that the overall liability of the Government in respect of guarantees —taking into account all the various State bodies, not just the ACC—incorporates adequate monitoring of this money and that we are able to take account of the currency in which this money is to be repaid? Obviously it would be undesirable if there was to be an imbalance in favour of currencies which were rising in value by comparison with ours. Therefore it is important not merely to consider the total amount of money being guaranteed but also the currency in which the contingent liability would fall to be met.

Section 19 states that the chief officer's salary cannot be increased without the consent of the Minister for the Public Service. This seems to be a fairly standard provision in respect of all Bills coming into the House in respect of any body. Obviously the Minister for the Public Service, whoever he may be, is anxious to make sure that these public servants are not able to jump the queue in respect of salary increases in comparison with their counterparts elsewhere. I would just ask the Minister—and here I am not speaking with any great knowledge of the matter—is there a danger of discrimination if the salary of the chief officer is specifically controlled but that those of perhaps his assistants or other people in the same organisation are not so controlled?

For example, could a situation arise in which a person who was second in command could be earning more than the man who is at the top, the most responsible public servant in a particular organisation? I have no evidence to suggest that this has happened in respect of the Agricultural Credit Corporation, but I did hear some time ago that it had happened in respect of another State body. Perhaps the Minister would confirm or allay my fears in this matter and indicate what is his general policy. I am sure he would agree that it would be undesirable if, by virtue of stringent statutory control on the chief officer's salary, his was allowed fall behind those of his subordinates. This would be more likely to occur in a body which, while technically a State body, was a commercial one, which had a greater degree of reliance on attracting specialist personnel from the outside business area, bringing them into the organisation and passing them out again later on when their expertise was no longer necessary. To get that type of person obviously one would need to offer the going market salary rate regardless of any requirements laid down by the Minister for the Public Service. In that sort of organisation it could happen that in order to attract a particular man one would have to offer him more than his chief officer in the organisation. That would not be desirable. Certainly we should be aware of its implications and I would ask the Minister for a statement in relation to that issue.

I said earlier I did not think that the provision for security for loans to agriculture constituted a big problem because most farmers who would be borrowing would own their land. But there are some farmers for whom this might be a problem, young farmers setting up who perhaps did not own very much land, who might be operating a particular unit—say, a pig unit on their father's farm. They might not be able to offer the bank or the Agricultural Credit Corporation the sort of security necessary. I would draw the Minister's attention—and perhaps this is a matter he might wish to discuss with the Minister for Agriculture—to a provision which exists in Holland where there is an agricultural loans guarantee fund; and I understand a similar provision obtains in Sweden, where the Government will underwrite or guarantee the loan taken out by the farmer. I understand that 10 per cent of the loans given to farmers by agricultural banks in Holland are underwritten by such a guarantee. Obviously not all loans are guaranteed by the Government but there is no question of opening the sluice gates to uncontrolled demand by credit institutions for guarantees from the Government. But a selective policy has been adopted in Holland to guarantee farmers who might otherwise be unable to get a loan and who are facilitated in that manner. I would ask the Minister to have a look at that provision. It may not be necessary here; perhaps there would have been more agitation than there has been about it if it was a real problem. However, it is one to which the Minister's attention should be drawn.

There is another provision the Minister might examine also which is referred to in the report of the task force on agricultural credit which reported in Canada some years ago. They suggested there should be two forms of credit institutions, one catering for the commercial farmer, who can be treated in the same manner as any borrower—this is basically what the Agricultural Credit Corporation are doing—and another specialist institution catering for the small farmer, a small farmers' bank, which would be able to take account of the needs of the small farmer, to take account also of the social dimension of credit policy in respect of the small farmer. We must realise that if we are to maintain a proper population balance here and a sufficient number of people in rural areas, strictly commercial considerations cannot be applied to credit for small farmers. Account must be taken of the overriding, national objectives, which are not strictly economic, in encouraging development on small farms. Possibly there is a case for some form of specialist credit institution to deal with small farmers' needs.