Land Bond Bill, 1980: Second Stage.

Minister of State at the Department of Agriculture (Mr. Hussey)

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

The purpose of this short Bill is to raise the limit on the amount of land bonds which may be created to pay for lands acquired by the Land Commission.

Land Bonds are actually created by the Minister for Finance, by means of annual orders to meet the commission's requirements. The most recent order was made on 22 January 1980 for an amount of £1¾ million bonds, bringing the total created to date under all land bond orders since 1934 to £80 million, the maximum amount permitted by existing legislation. Statutory authority must, therefore, be provided now for the supply of further land bonds. The proposal is to raise the statutory limit from £80 million to £105 million.

Land bonds as a medium of payment for lands acquired by the Land Commission have been used for over half a century and the system has been continued by successive Governments. To date a total of 1.35 million acres has been acquired for bonds in the interests of the country's deserving small farmers.

I am, of course, aware that some Deputies on both sides of the House are on record as advocating that the system of payment of purchase moneys in land bonds should be discontinued altogether. This is a view with which I have some sympathy, since land bonds—especially the earlier issues—have not always fared too well on the stock market. In times of inflation this is the fate of fixed interest securities in general.

However, being realistic, we cannot lose sight of the fact that the alternative to bonds would be a massive cash provision which would have to be funded by way of increased taxation or by further borrowing. As the House will appreciate this is something which the present Government could not contemplate at this time.

Last year, lands acquired for land bonds amounted to about 10,000 acres out of the total of some 24,000 acres from all sources coming into the hands of the Land Commission in 1979. At the present time, proceedings are in progress for the acquisition of some 40,000 acres, the purchase prices for which will be payable in the land bonds. These figures speak for themselves and fully demostrate the need for the present Bill.

I should like to conclude by stressing that the Bill before the House is essentially an interim measure. Since taking office in December last, the Minister has given considerable thought to future land policy, proposals for which the Minister is at present examining in conjunction with his colleagues in Government.

Pending the introduction of the new policy measures, the Minister intends to ensure that the Land Commission will continue to look after the interests of the small farmer who needs additional land to put him on a viable basis, and it is in that spirit that I commend this Bill to the House and ask Deputies to give it as speedy a passage as possible.

Mr. D'Arcy

Since I came into the House in 1977 one Bill was moved as far as land bonds are concerned and there was a wide ranging debate on it at that time. There have been numerous Bills, as the Minister stated, over the past 50 years dealing with the provision of land bonds for the acquisition of land. After half a century land bonds have completely outdated themselves. As a nation, if we continue to provide land bonds for the purchase of land we will slowly grind to a halt the acquisition of land by the Land Commission.

I remember some of the debate which took place in 1978. The Minister was warned at that time that the use of land bonds to purchase land should be discontinued and that the Department and the Land Commission should come up with alternative proposals. To my knowledge nothing has happened. In the Official Report of 14 June 1978 at column 1071 the then Minister stated:

As I have said, I hope to put proposals before the Government before the end of the year and subsequently to bring legislation before the House.

This was legislation to try to discourage larger farmers from continuing to buy land. At the end of 1978 there was no Bill although we were threatened with one on at least four or five occasions in that year. The end of 1979 came but no Bill. The Minister of State, Deputy Hussey, was in the Department at the time. We now have two new men, Deputy MacSharry and Deputy Allen, and are again being threatened with a Bill. Unfortunately, while land bonds are available there will be no Bill. The Minister for Agriculture stated that he will be presenting the Bill in the near future. What is the near future? We are losing valuable time. We were promised a Bill in 1978 and in 1979 and now we are promised one in 1980. I should like to ask the Minister when can we expect it? It is very relevant to this debate.

We in this party are totally opposed to the Bill and to the issue of any further land bonds because we believe, and have stated before, that the purpose of the new Bill is to raise funds for the Land Commission to enable them to acquire further land for distribution among our small farmers. Over the years land bonds failed miserably to hold their value. In practically all issues they have fallen below par. I should like to bring to the Minister's attention an article which appeared in the Farmers Journal of 14 April which is headed the “Great Land Bond Fraud”. Land bonds are a fraud. There is no doubt about that. I never understood why, with the present court system, the Land Commission have been allowed to purchase land with land bonds. The Minister knows as well as I do that in a great number of cases land bonds have gone as low as half their actual value. If that is not a fraud nothing is. I feel very sorry for people who have given land to the Land Commission and who have been paid for it in bonds. I know that a certain portion of it is now being paid for in cash.

If the Minister and the Department officials read this article they will see clearly the amount of research which was put into it and I thank them for the information. It only illustrates the fraud that land bonds are. We intend to oppose the Bill in an effort to bring home to the Minister and the Department the need for change in this area. They can only be described as a system of compulsory payment that will result in a loss to the people to whom they are issued. It was stated in the Farmers Journal that approximately half the land bonds issued in the past 50 years have devalued to the extent of 50 per cent. Would any other section of the community accept such a situation? Would industry accept it? Would the commerical world accept it? No, they would not. Farmers who have to sell land to the Land Commission have been accepting it for the past 50 years.

There are now three Ministers in the Department of Agriculture. We have a new set-up as far as the overall situation is concerned in AnCOT and the time has come to bring about a new system. While these bonds are available no real attempt will be made to change the system. I should also like to bring to the Minister's attention the kind of people the Land Commission will approach to purchase land. In many cases they are dealing with widows. In some cases there are problem farms and in a few cases there are large estates. In several cases in County Wexford the Land Commission have stepped in and been present as observers at the public auction of farms. This has often put a stop to the sale of land. In some cases the transfer of land to the people who bought it has taken up to three years. The matter has to go through the Land Commission courts first and then through the civil courts. We cannot allow this situation to continue. I would like to see a situation where Land Commission officers could go to a particular farmer and say to him: "You have 100 acres of land to sell and we are now prepared to buy that land from you at x £s per acre." We do not want courts, problems or agitation. We want action. The Land Commission have failed to provide a solution to this problem. I know of at least two places in County Wexford where it has taken over three years before the unfortunate people were allowed collect the money for their land because of action taken by the Land Commission.

The Minister's predecessor threatened us with a Bill and the present Minister has also threatened us with one. I understand that the Bill is drafted. I believe before this Land Bond Bill is finalised the Minister should at least give some indication of the proposals he has for the acquisition of land by the Land Commission. The Minister for Agriculture said on the last occasion that he was loathe to see the larger farmers buying land. What has the Minister in mind to discourage those people from buying land? Two years have passed since then but we have heard nothing further about it.

Speculators in my county, as well as in other counties throughout the country, have never had as good a time as they are having at the moment in the acquisition of land. They have no opposition and there are various reasons for this. The principal reason is that the Land Commission have no interest in purchasing more land. I have written on numerous occasions to the Minister pointing out where land was available in County Wexford. I have received replies saying that the policy has been changed and the Land Commission now consider it necessary to divide the land they have on hands before they purchase any further land. I have always claimed that the Land Commission have been keeping their land far too long but I am not prepared to accept that they should now be out of the land market.

Another reason why the speculators are having such a great time is that the majority of small farmers who need the land are unable to pay the very high interest rate on money borrowed to purchase such land. Large farmers have been able to step in in County Wexford and buy all the available land over the past year. The Minister of State in the House at the moment is in charge of the purchase of land. Is he prepared to come up with any new idea?

The new issue of land bonds will bring in a fairly large sum of money and it looks to me as though this situation will last for another two years. The Land Commission will be buying land with land bonds during the next two years. The people are not prepared to sell their land to the Land Commission. When I spoke recently to a man who has land to sell he told me he wanted to avoid the Land Commission. When I asked him why, he said that they would pay him in land bonds. I know the Land Commission are paying in cash for some land. The man who wishes to sell privately still has to go to the Land Commission for their approval. The man I was talking to said he was prepared to sell his land for a lower price because he was afraid of agitation in the area as a result of which the Land Commission would step in and buy the land.

I believe that as people become more and more aware of the value of land and of the bad value of land bonds, they will not be prepared to sell land to the Land Commission. How long will the present situation continue? The Government have been in power for nearly three years and they have had every opportunity to make some change in this position. The Land Commission, during the past one-and-a-half years, have been selling land to farmers for cash. I am prepared to accept that this is coming in slowly but we should be told this. The Minister should be able to tell us that in a period of two or three years they hope to be able to buy all land for cash. This would be very acceptable to the people who are prepared to sell their land and I also believe it would be acceptable to the people who are prepared to buy the land.

I know the interest rates on money borrowed to purchase land are extremely high at the moment and put small farmers in a very difficult position. They cannot afford to pay up to 22 per cent interest on money borrowed to buy land. Land is still retaining its price at about £2,400 an acre. The majority of farmers would have to borrow approximately 90 per cent to 95 per cent of the money they need to purchase land.

The Land Commission should work in co-operation with the ACC. Subsidised loans should be made available to small farmers to enable them to buy land from the Land Commission or on the open market. Those subsidised loans would help those people very much. The ACC have the expertise and have an office in almost every provincial town in Ireland. They have the management and the money. It is a semi-State body controlled by the Minister for Finance. Taking all this into consideration they are the appropriate authority to take over this function. The Agricultural Credit Corporation are giving a great service and they would be interested in this area, and the disposal of any subsidised moneys should be done through a semi Government organisation.

In the second last paragraph of his speech the Minister referred to future land policy:

...the Minister has given considerable thought to future land policy, proposals for which the Minister is at present examining in conjunction with his colleagues in Government.

This has been used on numerous occasions since June 1978 to get different Bills through. I am greatly disappointed with the attitude of the Government in relation to land purchase. Future land policy is very much tied up in this new Bill. The previous Minister for Agriculture, Deputy Gibbons, claimed before he left office that the Bill was ready. If that is so it should not take this Minister who has been in office since before Christmas so long to examine the Bill and bring it before the House. This Bill should be circulated before we finalise this Land Bond Bill so that we can ascertain its contents. As farmers become better organised the Land Commission will find it more difficult to purchase land with land bonds. This system should be discontinued. I am totally opposed to this Bill which tries to increase the time during which land bonds will be continued.

Mr. Bermingham

The more important problem facing the agricultural community relates to the area of land structure. I am disappointed, to say the least, that this Bill has been brought before the House. An interdepartmental report on land structure was commissioned by the previous Minister and it had some top class recommendations. We were told in the manifesto and by the Minister that land structure would be finally tackled. It has been the Fianna Fáil election cry down through the years that they will restructure the land and place as many people as possible on the land. The last Minister, Deputy Gibbons, gave an undertaking that land structure would now be tackled and that certain measures would be introduced to curb speculators purchasing land. The Land Commission have not acquired land for the last 12 months and this promise has been given as a reason for that.

The Minister talked about land that was acquired last year and what will be acquired now. Has the Minister started investigations into the acquisition of land this year? I know that a few farms were acquired very quickly for political reasons and one was acquired where there was no real need for acquisition as that land had to be given out to farmers who would not normally qualify for Land Commission holdings. That is a known fact and I can furnish proof if necessary.

I am opposed to the Land Bond Bill for several reasons. With the present situation in regard to land bonds and the interest rate, people being offered land over 15 to a 20 year period at £300 net are not small people who would be entitled to land, because such people are unable to pay for it. I doubt if the Government are serious about tackling the land structure problem, although that is their alleged policy, because there is very little to prove that that has ever been the policy of Fianna Fáil.

The report commissioned by the Government recommended certain things and down the years we all fell into the trap of blaming the Land Commission for everything. They have many faults, but unless the Government provide the money for them to do the job properly there is no point in blaming them for not doing it. I understand that millions of pounds have come into the agricultural sector over the last few years from EEC funds. If that is so it is the duty of the Government to ensure that some of that money is used for land restructuring. That money should be available free of interest for the purchase of land by the small man. If we do not do that we are not making a serious attempt to help to place small farmers in a viable position. So far, everything done by us and by the EEC in relation to land has favoured the larger farmer. Every day it is becoming less possible for the small man to survive. Surely it is not too much to ask if this money is available from the EEC for all sorts of schemes such as the farm modernisation scheme, which the smaller farmer cannot avail of because of the way it is structured by the EEC, that a good proportion of this money should be available to place as many people as possible on an economic farm. I am beginning to doubt if ever a Land Structure Bill will come before the House. I am beginning to think that all the talk by Fianna Fáil about placing as many people as possible on the land is all electioneering and eyewash. We have been hearing that from Fianna Fáil since I was a little boy, but there has never been any serious attempt made to provide the finance necessary to bring about such a situation.

Various Ministers have come back from EEC meetings expressing much delight at the moneys being pumped into this country; but what has happened is that the bulk of those moneys have gone to the big farmers, to the ranchers and the speculators who have been buying up land. There has not been any serious attempt on our part at EEC level to ensure that a good proportion of those moneys are utilised in the area of land structure which is the most important aspect of Irish agriculture today and which is a life-or-death issue so far as the future of our economy is concerned. By making viable the smaller agricultural units we will prevent thousands from having to join the dole queues. Unfortunately, though, there is not any such attempt being made by the Government.

When account is taken of the input into lands acquired by the Land Commission in respect of administration and of such work as fencing and so on, the commission find it necessary when the land is distributed to charge rents in the region of £300 to £400 per acre. That might be all right for some one who has a huge area of land and who could work the extra land without becoming involved in any extra cost but is a huge imposition for a man who is setting himself up in farming and it is not attractive in terms of the return from land. Very often the Land Commission find out that people are not able to take land because of these excess rents. I am not blaming the commission for this situation. It is easy for us to use them as a scapegoat, to say that they have not always been as efficient as they might have been or that they did not acquire lands which should have been acquired, but the blame rests with this House and in particular with the Minister for Agriculture and with his predecessor who was removed recently from office.

We would not be justified in saying to the Land Commission that they had available to them sufficient moneys to do as they wished because that has not been the case. They have never had the kind of money that was necessary to do the kind of job they should have been doing. Since the foundation of the State there has been much talk about the land belonging to the people, but all of that talk has been merely pie in the sky. Successive Cabinets, and particularly Fianna Fáil Cabinets who were the ones who talked most in this regard, failed continually to devise ways and means of providing sufficient moneys for the Land Commission. Apart from the proceeds from land bonds the commission are not financed in any other way. It is time, therefore, that we were prepared to say honestly whether we believe in the policy of placing people on the land. Immediately after their return to office Fianna Fáil had before them a report from the inter-departmental committee and they have been considering that report since despite the many assurances from the previous Minister that the relevant legislation was with the draftsman. What has happened to that Bill?

Having regard to the escalation in land prices it will not be long before the £300 rent to which I referred will be £500 or even £600. This will mean that those people whom we are supposed to be putting into an area of viability in agriculture will be worse off than ever.

I have said always that the benefits which accrued to this country from our membership of the EEC were not properly utilised. Surely the Government had a duty to ensure that the majority of these moneys did not go to the larger farmers and to the speculators. We should have tackled the question of the small farmer but apparently we were frightened by some people in Europe who were saying that the day of the small farmer was over and that in order to survive we must have huge units. Has the Minister made any approach to the EEC on the question of how we might be funded in respect of this area of land structure? If we are not prepared to tackle the question of land structure we must not pretend to be serious about the redistribution and restructuring of farms or about ensuring a basic standard of living for small farmers. Fianna Fáil have been able always to find the necessary moneys for the implementation of any scheme about which they were serious. They introduced certain schemes with which I disagreed and which cost more money, probably, than a scheme for the distribution of land would cost.

We had a report from the inter-departmental committee which was set up by the previous Government. It was available to the Fianna Fáil Government when they took office, or very shortly afterwards. That is almost three years ago, and they have made no move that I can see in this area. The report recommended an upper acreage limit. Will they implement that? If they say they are serious about a land structure policy, let them be serious about it. If they are not serious about it, let them say that it cannot be done.

The Minister knows the problem in his own area. He knows the problem all over the country. He knows the problem in the west of Ireland. I agree the problem is greater in the west but it is a problem across the length and breadth of the country. People who are real agriculturalists, who are real farmers, and who want to increase their holdings have no chance of doing so. They have proved beyond doubt that they are capable of farming in a magnificent manner. I know one man who has less than 35 acres and he has made an excellent living for himself and his family. He built a new house and educated his children. Anyone who says he is not a capable farmer is not being serious. What are the chances of that man ever getting a holding on which he could increase his output? His problem is insurmountable. A man with 300, 400 or 500 acres can add to his farm because he can pay interest rates to the bank. He has cash available and he has an easy method of getting a loan.

International speculators have come here and are working farms in a higgledy-piggledy way. The Minister knows them well. In Kerry, 15 farms were bought by a speculator. This type of thing is happening because we have no land structure policy, and because Fianna Fáil are sitting on the report they got after the last election. They are afraid to make decisions because they want to sit on both sides of the fence. They have had sufficient time to bring in a Bill and, if they do not do so, they are ratting on the small farmers. They should tell us which side of the fence they are on. At election times they try to give the impression that they are on the side of the small farmers. A previous Minister for Agriculture commissioned that report and would have acted on it. The Government have the report but the action necessary to implement it is not being provided by the Minister.

I do not know why the previous Minister for Agriculture was removed from office. That is not relevant to this Bill but he informed this House that a Bill would be before the Government and enacted before the end of last year. There is no sign of it. Being the suspicious man I am, I now believe that there will be no Bill or, if there is a Bill, it will be a farce. Fianna Fáil people have told me that they do not intend to have an upper acreage limit even though it is recommended in the report by people who were not tied by political considerations and who believed it was necessary if we were to do what we claimed we wanted to do.

It appears to me that the introduction of the Bill now before the House is an indication that the other Bill will not be introduced for the present. It is regrettable that this present Bill had to be introduced. If people are prepared to sell land to the Land Commission, it is not fair to pay them in land bonds. On many occasions people have not been able to sell those bonds at market value. Old people who would be delighted to sell land to the best advantage of their neighbours are discouraged from doing so by the fact that they cannot get the market value for their land under that system.

Because of the inflated price of land, because of the activities of the big farmers and the speculators I mentioned, and because of the interest on the land bonds, it is impossible for small farmers to make their repayments. The Minister may ask where will we get the money, but I have never known a time when you could get all the money you wanted. It is possible to get money if the Minister is really committed to do the job he was elected to do. If not, he should tell us that he is not. He should be honest enough to say it is not on.

I do not want the Minister to tell me how much land was divided this year, that year, or the other year. This party have been committed to solving the land problem in Ireland since their foundation, as were all the parties, and as are my own party who like to believe that we follow in the tradition of Michael Davitt. There is no use in our trying to bluff one another. I do not want the Minister to say: "You did this in such and such a year." I want him to declare that he is in favour of a proper land structure policy which will make land available to people with the know-how who are willing to work it and willing to produce more than is being produced on the land at present and to make it economic for them to do so without being crippled with rates and rents. If he is prepared to do that and if the Government are prepared to back him there are many ways to get the necessary finance. Frequently we are told about the millions of pounds coming into the agricultural industry from EEC sources. I have said before that the most important area in agriculture is the employment of people on the land. The Government should be prepared to negotiate with the EEC and they should commit to the area of land structure a very hefty proportion of the finances that are available for other things. It appears to me that not one penny of European funds is going to the most important area to ensure that families can be maintained on economic holdings. There has been much talk about this matter since the time of Parnell. All governments have paid lip-service to the job but little progress has been made. Fianna Fáil have made the greatest hullabaloo about this kind of activity but this Government are failing more miserably than any government since the foundation of the State.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): The Land Commission were established to take over tenanted land from the landlords and to vest it in the tenants and also to divide untenanted land. The latter comprised large tracts of land. By and large that job was done by the Land Commission under Acts prior to 1923 and also under the Acts of 1923 and 1933. Subsequent to that, the Land Commission were charged with the duty of providing additional land for uneconomic holdings in order to allow the holders to remain on the land, to make a decent living and to provide for their families.

Some people think that the job the Land Commission were established to do has been done and that the commission should be wound down. The Department of Finance have held that opinion for some time and they have been trying to exert pressure in one way or another to have the Land Commission abolished. I do not think that the work of the Land Commission is done. I believe there is much work for them to do if we are to achieve one of the social objectives of the Constitution, namely, to settle as many people as possible on the land.

There are very many smallholdings. Statistics show there are 41,000 holdings between five acres and 15 acres and there are 57,000 holdings between 15 acres and 30 acres. I suggest to this House that those 98,000 holdings are uneconomic and that the landowners require more land. There are 56,000 holders with farms between 30 acres and 50 acres and a large proportion of those farms are uneconomic and should be increased.

In those circumstances I was alarmed to find that since Fianna Fáil came back to power they have been busy in running down the Land Commission, in getting ready to wind down the commission. I can best illustrate that by giving three sets of figures in regard to what are known as section 40 notices. A section 40 notice commences the acquisition of land. In the period May-October 1977 a total of 118 such notices were served, the figure for the period May-October 1978 was 197 but in May-October 1979 only 22 such notices were served I say that is striking evidence of a calculated decision by the Government to wind down the Land Commission and to bring their acquisition operations to a halt. I have reason to believe that both Ministers for Agriculture—certainly Deputy Gibbons—took control of the issue of section 40 notices and that all directions for the issue of the notices were given through the Minister's office. That meant the Minister had control over the acquisition of land.

I want to go on record as saying that the decision of the Government to refuse to make smallholdings viable is an unsound policy from the social and economic points of view. It is unsound socially because the result is that although the overall population is increasing the population of rural Ireland is decreasing. Land is passing out of the reach of the small farmer. It is passing out of the reach of the industrious smallholder who is making good use of the land he has but who requires more land to make his holding viable and to give him a decent living. He is being driven out of rural Ireland. He is being forced to sell his small farm which is bought up perhaps by a businessman who will run the farm on a part-time basis or by a hobby farmer who is not all that interested in whether the land produces the maximum and who is satisfied to see it appreciating in capital value or else it is bought by a large farmer who has enough land already. The result is that a full-time farmer and his family have to leave the land. That is socially unsound and it is to be deplored. From an economic point of view it is an unsound policy because a man who is farming 45 to 50 acres and who must get a living for himself and his family will produce more from that land than a person working a 150- to 200-acre holding, because the man on the bigger farm has not the incentive to work land with the maximum efficiency.

That is the position under this Fianna Fáil Government. The Minister of State has told us that the Land Commission are concentrating their efforts on dividing land on hand. That is the explanation he gave us for failure to acquire more land. He said the Land Commission have 74,000 acres of lettable land on hand. That is not a lot of land. It is not something the Land Commission should be ashamed of because when that land has been examined holding by holding it will be found that some of it is being retained because it is not advisable to divide it until the Land Commission get control of adjoining land in one or two years. There are other reasons why this land is not being divided. It would be about two years of work for the Land Commission to divide 74,000 acres. If the Minister makes inquiries he will find that some of the land is being held as a matter of policy until a further block of land can be got in the immediate neighbourhood in order to achieve a better job of rearrangement.

Fianna Fáil Governments have been yielding too lightly to the Minister for Finance and the policy of his Department. When I took over the Land Commission in 1973 I found that the outdoor staff, the inspectors, had fallen in numbers and there were 20 vacancies. Notwithstanding the recession and the ban on civil service recruitment, I was able to persuade my colleagues in the Government that this was one sector in the civil service where numbers should be kept up. The 20 vacancies were filled and we were able to get on with the job. Now, after three years of Fianna Fáil back in office, the vacancies are there again and the Minister has simply told us he is looking for staff.

Since this regime took over again, one of their Ministers for Agriculture made the point that the proper way to control land purchase is through some means other than relying on the Land Commission. He said he had in hands a Bill that would do this, making it impossible for people who do not need land to get hold of it and ensuring that small people in need of land would be facilitated. We have not seen that Bill, and I do not believe such legislation could be made to work because there will be ways and means to get around it.

That was first stated in 1978 by the Minister for Agriculture. The Bill has not been produced and the Land Commission's acquisition section has come to a standstill with the result that about 100,000 small farmers whose holdings should be brought up to viable sizes are not getting land, and the land is passing into wrong hands. Instead of the status quo being preserved, big farmers have engaged in a “snatch and grab” campaign and land has been passing into the hands of speculators and people who do not need it.

As I have said, the Minister for Agriculture two-and-a-half years ago served notice that he would bring in a measure to make it difficult for people who do not need land to acquire it, and that would make it easier for the small farmer to get land. As I have said, this has encouraged the speculators and those who do not engage seriously in farming to get land. If the Minister for Finance were to say in September that he intended to increase the price of whiskey by 20p a glass in the February budget, what would happen? He would not get a penny of the extra tax on whiskey the following year because every merchant who could afford to stockpile would beat the budget.

That is the effect of the talk by the Minister for Agriculture about his famous Bill to restructure land. It has encouraged speculators and others who do not need land to get their hands on it while they can. Therefore, this Government and their Ministers for Agriculture have a lot to answer for. They have brought the activities of the Land Commission to a standstill and the Department of Agriculture have taken control of the issue of section 40 notices.

Even Fianna Fáil backbenchers now tend to regard the 1977 manifesto as a joke. It is a cynical joke and no part of it is more cynical than the promises held out to the small farmers in regard to the restructuring of land. Dealing with land policy, the Fianna Fáil manifesto stated:

Fianna Fáil will establish a Land Development Authority responsible for structural reform and the implementation of the EEC Farm Retirement and Farm Modernisation Schemes. Fiscal disincentives will be introduced to ensure that purchasers of land farm the land to its known potential.

Under Fianna Fáil the Land Development Authority will introduce a system of long term leasing to assist young farmers in acquiring land, and to facilitate retiring farmers who do not wish to sell outright. Farmers in the scheme will be eligible for Social Welfare and Health Benefits. Fianna Fáil will set up a Farm Inheritance Counselling Service to inform farmers of the benefits of early inheritance insurance for early retirement.

Was ever such a cynical joke printed, calculated to mislead small farmers? Where is the land development authority which was promised? We have never heard of it. The only thing the Government did was to bring a halt to the only authority available to protect small farmers from the wolves. I refer to the Land Commission.

Fianna Fáil promised to update the farm retirement scheme and the farm modernisation scheme and all they have done in regard to the latter scheme is to refuse to bring it up to date in line with inflation. If Fianna Fáil had not attacked the farm retirement scheme when they were in opposition it would have been much more successful. Many people are now enjoying the benefit of that scheme and are very glad they participated in it, but many others were frightened and discouraged by Fianna Fáil and other agencies.

What became of the promise that fiscal disincentives would be introduced to ensure that purchasers of land farmed the land to its known potential? Where are the incentives? Where is the scheme of long-term leasing to assist young farmers in acquiring land and to facilitate retiring farmers who do not wish to sell outright? The promise that farmers in the scheme would be eligible for social welfare and health benefits played on the wishes of the farmers who had been led to believe that while participating in the farm retirement scheme they would be getting the old age pension and other benefits. That was the promise; where is the performance?

Fianna Fáil promised to set up a farm inheritance counselling service to inform farmers of the benefits of early inheritance. All they have done is to refuse to implement the promise of the National Coalition Government to keep the threshold for inheritance tax in line with inflation.

The Minister tells us that 40,000 acres are in the machine, which is an easy way of describing the process of acquiring land. The machine begins with the section 40 notice and ends with the vesting of the farm in the Land Commission. According to the Minister's speech, 40,000 acres have been bought. One gets the impression that £25 million worth of land bonds is a lot of money but my mathematicians tell me that at £1,000 per acre it would buy 25,000 acres of land. That is substantially less than the Land Commission would be expected to acquire in one year. Everybody knows that land cannot be bought for £1,000 per acre. If we double the figure to £2,000 per acre, £25 million worth of land bonds would buy only 12,500 acres. We know it is unlikely that the land will average out at £2,000 an acre. These £25,000 million worth of land bonds will buy approximately 10,000 acres. That is what it all boils down to. We find that the Minister for Agriculture and the Land Commission have 40,000 acres of land in the machine. What will the Minister do? The answer is obvious. The Minister has decided that the Land Commission must go, or at least the Minister for Finance, who is obsessed by one sort of craze or another against rural Ireland, because most of the peculiar ideas emanating from the Department of Finance are aimed against rural areas, at such things as the local improvement schemes and so on. I appeal to the Minister, who represents one of the areas most concerned in land division and restructuring, to bring pressure to bear on those concerned to ensure that, until such time as another scheme is implemented which will protect the small farmer, the Land Commission will continue to operate, that section 40 notices are served and that farms are acquired and divided.

Of course, land bonds are not a desirable means of paying for land because very often they do not maintain their value, and they have got a very bad name. During my time as Minister for Lands bonds were introduced bearing interest at, I think, 16 per cent and 15¾ per cent. These bonds have stood up fairly well. Of course, they will be attacked now by the increase in interest rates and bang they will go. The best and only fair way of paying for land is by cash, but that does not mean that small farmers are to be thrown completely to the wolves. There is here a huge social and economic problem which the Government are not treating seriously and this is causing irrepreparable damage to almost 100,000 small farmers. I have disregarded completely the 40,000 or so farmers with acreages between one and five but between five acres and 50 there are 100,000. At the upper end I suppose one could scale off a good few, but that is the size of the problem.

Since this Government came back into power the brakes have been put on so effectively that the machine is grinding to a halt, and that is an appropriate description for the acquisition operations of the Land Commission. The farmers who need the land are seeing it passing out of their reach into the hands of people who do not want it unless as an investment, a hobby or as a means of increasing their existing acreage beyond a reasonable size. That is something I deplore, something about which I would appeal to the Government to re-think seriously because, unless they do, they will be late. It is not an answer for the Minister to say that the land is being divided and that is why it is not being acquired. Those two operations should proceed simultaneously, and if the Minister has not sufficient staff he should recruit more.

I asked a question of the Minister the other day regarding the Land Commission office for Cavan and Monaghan. I was told that for a short time in 1976 the staff there was eight and now it is down to five. Of course I was told that they were looking for staff. That has been the policy of this Government, the policy imposed on them by the Department of Finance. In my opinion the Department of Finance has no social conscience, nor has it any concern for rural problems. If this policy is continued any further it will be beyond arrest. Indeed, the social directive of the Constitution which says that as many of our people as possible should be settled on the land in economic comfort and so on is being ignored.

Mr. Hegarty

I share the views of the previous speaker in regard to land bonds. I have a thing about them, I always thought they constituted a sort of State-sponsored piracy, particularly when very often one is dealing with elderly people who may need the money very badly. It is tough on these people to be more or less told: "We are taking over your farm". Indeed, for many such people that can be a matter of extreme shock. But, to add insult to injury, they are being told that they will be given a bundle of papers that will realise X amount in interest but which they discover, when it comes to buying something, can be of very doubtful value.

In the history of land bonds we are talking of about 19 issues, some of which are down to 40 per cent and others worth less than 60 per cent of their original value. My source of information is this week's Farmers Journal where it is said that none of the bonds has held its value. This is proof that the farmer is not getting value for the farm he has to give up. The reasonable thing to do in the case of the person who for some reason is unable to farm as he should—I have seen cases where that could be debated; the criterion seemed to be that they were childless couples—is to offer the full market value for the farm and where possible allow him to remain in the home. Instead of dragging their feet, as the Land Commission seem to be doing regarding the purchase of land, they now have a golden opportunity to acquire land.

As one can read in the newspapers, land buying has come to a halt practically. Cash is no longer readily available for land purchase and land is not commanding the extraordinary prices it made for some years. It is a good time for the Land Commission as genuine purchasers to come in and help make farms viable. In this way the Land Commission provide an excellent service. In the present farming climate when prices of commodities have levelled out and we can no longer look for big increases, viability is the operative word and the only hope of survival that the small man has is to get an acreage sufficient for him to be able to carry out his business effectively. Tillage farming needs sufficent acreage to justify investment in it and the purchase of equipment. The dairy farmer also needs sufficient land to maintain a reasonable herd.

The Government and the Minister should be looking at this area of farming now. They should forget about land bonds and rather think of purchasing farms coming on the market at the market price and allocating this land to deserving smallholders. The money for speculation in the market place is not available now; the price of land has dropped considerably and there is no excuse; it is a matter of putting up the money and buying the land. It is not giving something for nothing—a point I have made before here. We are actually demanding from the farmer the full price to be repaid in rent. Perhaps in the west and similar places we are helping him out but in the eastern part of the country the purchaser is being asked to pay back to the Land Commission the full going price.

I think Deputy Bermingham pointed out that even this is becoming an insuperable burden and where this is so the State has a function. If, when it comes to housing loans from local authorities we help certain categories of people to buy their houses there is certainly a good case for subsidising this rent especially when a young farmer with very little land is acquiring a substantial acreage compared with what he has already. I have made appeals to the Minister by letter in this regard but to date I have not been successful. Incidentally, in fairness, the Minister of State takes the trouble of replying to us and we compliment him on that. This cannot be said of all his colleagues. I am particularly anxious to see something done where the Land Commission take over indifferent land, poor land and where because of inability to buy well or because of competition may have to pay more than the market value for land where a good deal of reclamation would be necessary. Such lands should be made available at the right price.

Speaking for my own area, we were told that the Land Commission are now concentrating on allocation. I hope that even this is true because I thought for a while that they were joining in the speculation, competing with other speculators in renting land for very substantial figures for the growing of sugar beet or some such purpose and that they had gone into the 11-months system. Certainly, for some years in my own area they had farms on hand. I know one case where at the time of acquisition there was an excellent farmhouse and farm buildings and a fine farm. Now, the farmhouse is in a shambles and the farmyard, as far as I can see, has been taken over by somebody who I think has no right to be there but cannot be got out of it. Nothing has been done to correct that situation. Shortly after acquisition a local smallholder approached the Land Commission and offered to exchange his own farm for a portion of this farm with the houses and buildings which was an excellent business proposition but the Land Commission did not act on it. That sort of thing does not help the Land Commission or their performance on the ground.

Now more than ever the commission have a very important function because this economy will be relying more and more on farming to get out of its present difficulties which are worsening day by day. We will be depending on viable farmers to produce goods at the right price, as they must do under EEC conditions, and deal with higher costs. They will have no hope of doing this unless each of them has at his disposal adequate acreage. The land is there in every parish in the hands of the Land Commission and there is quite an amount of land that can be acquired at market price if cash is paid for it. Now is their time to move in with real money, not with paper, and make it known to all that they are in the business of buying land at commercial prices for cash. I guarantee that plenty of land will be willingly offered because many people who have no other plans would like to see their farms go to make a number of small farmers viable but they are scared—and it is a genuine fear—that they will not get money— usually they are elderly people and that is what they need—but paper. This becomes more difficult if they have relatives to whom they would like to dispose of some of their goods.

With land bonds we are offering them only paper at interest rates which could not be called attractive. I am convinced the ordinary farmer is anxious to become viable. The farm modernisation scheme is geared to that type of farmer. Other farmers are called transitional farmers. Deputy Fitzpatrick told us there were 98,000 farmers with farms under 30 acres and 56,000 in the 30-50 acre bracket. We are trying to build farms to at least 50 acres because to qualify for the optimum EEC grants farmers will need to have 50-acre farms.

I appeal to the Minister to reconsider this idea of land bonds and to adopt a new system in the Land Commission by making a substantial sum of money available. This money should be freely available to any government because it is a practical proposition. It is not money down the drain. It would be very easy for a government to convince a financial institution, national or international, of the worthiness of a scheme to buy land to make farmers viable. As I said, as a nation we will be depending heavily on these farmers.

We would also be doing another service to the nation. We would be eliminating the hand-outs given to farmers who are unable to make a living from their small holdings. This needs a lot of brave thinking and courage but in my view it is well worthwhile for the Minister to give up this idea of land bonds once and for all and to pay cash, like any other customer, for land. Why should the State be different from any other purchaser? The State should have money to pay like everybody else. Why should the State get the title deeds of a farm without paying cash? If a private individual went to an auctioneer with this type of arrangement he would be very quickly shown the door. I am amazed we allowed this system to continue. I spoke about this when the Coalition were in power but I did not get very far. I am completely opposed to land bonds and always have been.

At present I do not believe there is anybody else in the market for land because of the clamp-down by lending institutions on the buying of land. Some young people who borrowed from commercial agencies to buy land find themselves in great difficulties because of the high interest rates, which have become even more savage in the last few days. It is up to the Land Commission to buy the land that is available at present which can be bought at very realistic prices. All over Europe land is being made available to help to make farmers viable. When very small farmers are acquiring what would be for them a substantial portion of land from the Land Commission, we should give them subsidised loans. When the Land Commission looked for suitable customers they experienced some difficulties because of distance. This matter should be looked at again. We are talking about an average of one-and-a-half miles——

An Leas-Cheann Comhairle

This does not arise on this Bill.

Mr. Hegarty

With modern equipment that should no longer be a problem. I know from experience that if the extra land is two or three miles away it can be handled efficiently. To sum up, I appeal to the Minister to forget about land bonds, to pay for the land, to subsidise the rents where necessary, and to get into the business of buying land now.

Mr. O'Toole

I cannot but express disappointment at the fact that I find myself discussing the further extension of the land bond system. As has been said by previous speakers, it is a system which, having served its purpose, has now become outdated. One could question the whole morality of the order from the word go, but it seems that for some time it had certain advantages and benefits accrued from the use of the system. Today and for some years past these benefits have been diminishing and we have long reached the point of diminishing returns so far as the use of the system is concerned.

At the moment the system is inoperable. The expectations of many people were raised by promises made of a development authority and so on. It was implied that this authority would replace the Land Commission. It was implied that people directly involved in land acquisition on both sides would be given what could be said to be a fair deal. This promise has not materialised and we are left at the moment in a vacuum in that the activities of the Land Commission have diminished over the past 18 months or two years. I know this from my own experience.

I come from a constituency where down the years the Land Commission were looked upon as an agency with enormous power, an agency of great importance, because not only did they serve to acquire and redistribute land but in doing so they also served a very important social function. The Land Commission are to be thanked for the way in which they went about their business in order to make better the lot of the small farmer in the west. With the escalating cost of land and with the powers which the Land Commission had and still have, that role of benefactor in many cases turned into a role in which they were seen to be handing out penalties.

If, particularly in recent years, it was found that a small farmer was absent from his farm through social pressures, such as the pressure of unemployment, and had to emigrate, as was the case in the west on many occasions, or was not using his land to the degree which was said to be necessary, compulsory acquisition was executed by the Land Commission. Unless the farmer gave up his land voluntarily he did not receive cash. In possibly 99.9 per cent of cases all farmers of this type fought the Land Commission in court and in nearly all cases ended up having to accept what was laid down by the court as being a reasonable figure.

Often because of the amount of money available to the Land Commission for land acquisition, the kind of price they were paying for land was not what today could be regarded as the going rate for land. Consequently, we had reluctance on the part of the farmers to part with their land and, as a result of that, damage was caused by the continued lack of land in the case of farmers who could till it and make full use of it as an asset.

The bonds system can be questioned. The State taking unto itself the right to acquire land compulsorily can be questioned simply because in most cases the small farmer—or the big farmer as was the case in the past—directly involved whose land was being acquired felt that he was not getting great value for his property.

The social aspect of the work of the Land Commission cannot and should not be forgotten. I have seen many instances where, through the prudent use of the powers the Land Commission had and have, they did succeed in improving the lot of the small farmers along the west coast by acquiring land and redistributing it in a manner which they felt was correct and within the terms of the powers that they had. The only clear-cut, sensible, rational and right way—I use the word "right" advisedly—to acquire land is to pay for it. I have no doubt that if a cash deal were entered into by the Land Commission or by any agency who might replace the Land Commission, as was promised in 1977, great areas of land would be released on to the marketplace and made available for possibly more go-ahead and younger farmers to use to its full potential.

One of the saddest aspects of our present position, in particular along the west coast, for any person travelling in that area is the amount of land which would seem to be lying fallow at the moment. If one inquires why such holdings would seem to be working below their full potential one finds out invariably that it is because the owner cannot hope to survive on that land and has had to take a job away from home, possibly abroad, and the land is left there.

I am not suggesting, and indeed I would oppose strenuously, the compulsory powers of any agency to walk in behind that man's back and acquire his land because it is not being used by him to its full potential, without first of all getting his consent and secondly paying him what is his right, the market value, the going price of the day for that property. If this were done we would be making full use of our greatest national asset. The Land Commission could then acquire land at a much greater rate than they seem to be able to do now and they would be able to distribute that land to people who could use it to its full potential.

Any question of land has always been a very emotive subject in this House and this country. For historic reasons we are attached to land to a much greater degree than are citizens of any other country in western Europe because of the turmoil through which this country went due to different land policies being imposed on it down through the centuries. We have now had our independence for 60 years, during which time the Land Commission have been operating, in most cases acting responsibly and at all times within their terms of reference. However, the day has long passed when we should have this State agency involved in compulsory purchase powers, taking over properties for what amounts to an enforced loan system, a bond system. It is unlawful and wrong to allow this kind of imposition by a State agency on any individual. It is true, in particular of the present time, that there are many hundreds, possibly thousands, of small farmers who because of the size of their farms and the little hope of improving or expanding them would gladly give up their holdings if they felt that they are getting what they regard as a fair deal in exchange—and that is payment by cash for their land. The release of land through the system would in the very short term, I am quite convinced, more than pay for the input involved in cash terms by the State. This land would be redistributed to people who would use it to its full potential and it would be an asset to the nation as a whole.

As I said at the outset, it is a sad reflection on the Government that we are here today debating a further extension of a system which is patently unjust, and I use the word "unjust" in the moral sense. The Government know, as everyone in this country knows, that the only way of acquiring land at the moment is by paying for it in cash. I hope that the Minister, when replying, will give some indication when the Government might be prepared to fulfil their promise made in 1977 and, again, fulfil the moral obligation which I feel they have towards people who are prepared to give up their land and to people, on the other hand, who are prepared to accept this land when it is redistributed.

Mr. Bruton

I am very disappointed at the course which this debate has taken. It is worth recalling the last debate in this House on a Land Bond Bill—the Land Bond Bill of 1978—discussed here on Second Stage on 14 June 1978. The first contrast between the present debate and that one is that on that occasion the then Minister, Deputy Gibbons, thought it worth his while, at least, to come here himself and introduce the Bill. In the course of his introductory statement he dealt in a very detailed way with the various possibilities of restructuring our land policy and introducing new means of making sure that the land, which is our single greatest national resource, is used properly.

The fact that the then Minister spoke in the debate and that he canvassed a wide variety of options showed that he, at least, at that time, took this matter seriously. He concluded his statement on that occasion—and I am quoting from column 1071 of the Official Report of that date—by saying: "As I have said, I hope to put proposals before the Government before the end of the year —in relation to land policy as a whole—and subsequently to bring legislation before the House."

Since then, and in this debate, we can say that we can see a retreat under the new Minister from the policies which were being pursued in relation to land. The only reference we have by the present Minister on the question of land policy was in a very brief reply which he made to the debate on that subject at the Fianna Fáil Ard Fheis which I listened to on television. I remember very well his saying in February of this year that he at that time hoped in the near future to be putting proposals to his colleagues on the subject. Indeed, he used almost exactly the same words that his predecessor, Deputy Gibbons, had used over a year and a half previously when he said that he, in June 1978, hoped that he would be putting proposals to his colleagues within the reasonably near future or before the end of that year.

It would seem that in a year and a half there has been little or no progress in relation to land policy formulation under the present Government. The fact now that at the first opportunity when this matter could have been discussed in the House Deputy MacSharry did not think it worth his while, as did Deputy Gibbons on a Bill of precisely the same content, to come in here to the House to discuss the matter is, in my view, an indication of a downgrading of the importance of land policy as far as the activities and priorities of the Department of Agriculture are concerned. That is indeed very regrettable. There are vast acres of land here which are simply not being used to their potential, not in one part but in every part of the country. In every county in Ireland there are tracts of good land, or land which with modest improvement in drainage, removal of stones and so on could be brought to a very high level of production, which are simply not being used properly.

I had the privilege not long ago of visiting the part of County Leitrim where the McCartin brothers had done extensive land reclamation. On some of the most unpromising land in the country, perhaps the very worst—the drumlin soils of Leitrim—they have reclaimed that land and are achieving outputs of milk equal to those obtained in the Golden Vale, simply because they made the effort to use the land properly and put fertiliser and stock and reclamation into it. There are millions of acres of land throughout the country which could be used to a significant extent but are not being so used because of a bad land structure at present. The basic problem is that the people in control of the land in many cases have not the motivation or the skill to use it to the full. In many cases they are people who have other responsibilities which do not enable them to give to the management of the nation's single greatest resource the time which it must be given. If our land were treated in the same way as, for instance, a much less important national resource—the seabed—is being treated, a far greater urgency would be attached to land policy legislation than is being attached to it by the present Government.

The Government should realise that land, its use and what it can produce, are far more important than our seabed. It is far more important than whatever deposits of lead or zinc we have under our terra firma or seabed. The surface of the land can produce far more wealth than any of these things. Yet all the discussion about natural resources is about oil, zinc, lead and so on and there is no discussion about the utilisation of our most important asset, our land. The words used by a New Zealand visitor to this country approximately 20 years ago are still completely true today. He said that Irish land was producing almost as little as it could conceivably produce under Irish climatic conditions.

Some people may think there has been a dramatic improvement in land use since we entered the EEC. They hear about some farmers who have done very well and who have expanded their numbers, invested in buildings and so on. The urban perception of agriculture is that since we entered the EEC all farmers are doing very much better than they were before we entered. This picture—I support what I am saying by reference to the farm management survey—is not true. Whoever is to blame we are not doing very substantially better now than we did before entering the EEC.

There are fewer cattle on our land now than before we entered the EEC notwithstanding the most favourable circumstances we have ever had in our history for agricultural expansion between 1973 and 1978. Could anything be more disgraceful? While some farmers have seen their incomes improve during that period farmers in the west and small farmers have seen their incomes increase during the same period at far less a rate than the average rate for people in other occupations. The average income being derived from the land in the west in many cases does not exceed the amount that people can derive from the most basic and minimal of social benefits obtainable by those who are poorest in the country. People who are deriving that income from the land are in control of our greatest single national resource.

We must make sure that our land produces a lot better than it does at present. If we do not increase stock numbers and if the people who are nominally in control of our greatest national asset are not able to use it to earn a reasonable income for themselves let alone for the country we are in a serious situation. It is against that background of under-utilisation of our greatest resource that the retreat in respect of the urgency of land policy by the Government is most disquieting. The fact that we are no further on than when we last debated this subject in June 1978 in relation to the formulation of a land policy under this Government is nothing short of a disgrace. All the work that was necessary to be done to formulate such a land policy was done for them. They were presented in May 1978 with a comprehensive report on land policy. Since then they have not introduced legislation to give effect either to that report or to other measures of this nature. The fact that we are now contemplating a land bond Bill providing an additional £25 million for the purchase of land by land bonds clearly indicates that the Government intend to continue with existing policies and do not in the foreseeable future, certainly for the duration of the operation of this Bill, intend to do anything about bringing in new and better systems of land policy.

It has been stated by all commentators in the House and by every farming organisation that the present policy, of which land bonds are an integral part, is a failure and totally inappropriate to our present conditions. The evidence I have cited of our land not being properly used bears out that contention.

As regards the proposal in the Bill to provide £25 million more in land bonds for the purchase of land, it has been stated before but cannot be repeated often enough that land bonds are an immoral way of buying land. They are totally contrary to the provisions contained in the Constitution in relation to the protection of the right to private property. If these bonds were properly tested in the courts, particularly in the current climate of judicial interpretation of the Constitution as referenced in the recent court case in relation to married women where the applicability of the provisions of the Constitution has been significantly widened as far as the court is concerned, it would be found that land bonds are unconstitutional and discriminatory. The basis of the decision in the income tax case was that the provisions were discriminatory. Land bonds would be found to be unconstitutional on the same basis. They are discriminatory because this is the only situation where an asset is compulsorily acquired by the State without full compensation in cash being provided. For example, if the State acquires a building because it wishes to have space in a city area for the building of a new road or if it acquires land in an urban area for housing and it does so compulsorily the land owner is compensated in full in cash. However, if the State through the Land Commission, decide to buy agricultural land in a rural area for redistribution the land owner is not compensated in full in cash. He is given bonds which are not worth their cash value. That distinction between compulsory purchase in urban areas where people get the full cash value and compulsory purchase in rural areas where they do not get cash value is discriminatory and unconstitutional.

The Minister should seek advice from the Government law officer on this matter. If he has sought such advice, what was it? The question of whether land should be acquired from anybody by means of bonds was discussed in detail in the interdepartmental committee report on land structure reform presented to the Government in May 1978. This Bill is flying straight in the face of the advice given to the Government by an independent committee which reported on this subject as recently as May 1978. By going ahead with the introduction of land bonds they are showing that they do not accept the advice given to them by an expert committee on that occasion.

The membership of that committee consisted of Mr. Dowd, who was then Assistant Secretary at the Department of the Taoiseach, who acted as chairman; Professor Bob O'Connor, ESRI; Mr. Commins, An Foras Talúntais; Mr. McNamara, CAO, County Limerick; two officials of the Department of Agriculture, two officials of the Land Commission and two officials of the Department of Finance. All of those people are officials of the Government. None of them could be described as raving radicals or people who would be considered to be unsympathetic to the needs of Government to act responsibly as far as finance is concerned, particularly the people from the Department of Finance. Their considered opinion, delivered to the Government in paragraph 11.5 of that report, was:

We are of the opinion that the use of Land Bonds as a payment medium for lands purchased or acquired for land structural reform purposes is no longer justified and should be discontinued.

That was the advice given to the Government in May 1978. Now, two years later, the Government come in with a Bill to give us £25 million more in land bonds after receiving that advice from an independent body well qualified to advise them.

The committee described land bonds in a very fair fashion. They said on page 86 of that report:

Land Bonds amount to a forced loan without guarantee of repayment date.

Instead of getting money for the purchase of land the Land Commission find out what the real cash value of the land is and then offer the person the same figure in land bonds. For every £100 that a person's land is worth those bonds are worth about £90. The person who sells his land is getting the equivalent of at least 10 per cent less than the actual cash value of his property. There is no guarantee about any time when those bonds will be redeemed at their full value. There is no provision in the Bill which says either the rate of interest at which those bonds will be issued or the date at which the new issue of bonds will be redeemed.

The committee also said:

In the future situation, we envisage that all lands coming into the hands of the agency will be disposed of on a cash basis.

The committee made it absolutely clear that they were of the opinion that the purchase of land by land bonds should have been stopped there and then. In defiance of that independent advice by a body set up for the purpose the Government in this Bill are going ahead to prolong for a still longer period this iniquitous system of the payment for land by land bonds.

I consider that land bonds are totally immoral and unfair. Practically everybody in the country owns some property, whether it is a house or a car. This country attaches considerable importance to the right of people to own some property and to seek to own more by the result of their efforts. The idea that the State can come along and force a person to sell his property to the State is something most of us would find very difficult to accept in the first place, but we recognise that there are circumstances when the State must have the right to compulsorily acquire property from anyone. It is to add insult to injury that not only should the Government come along and compulsorily acquire property from anybody but that they should also acquire it by means of a fraudulent system which does not give the person the cash value of his property.

The Minister tells us that it would cost a tremendous amount of money if the Government were to pay cash for the land being acquired instead of paying it by land bonds. It would cost a considerable amount of money but the Minister will recollect that the provisions of the report, in relation to land policy, envisaged that the Government would cease using the compulsory acquisition of land as their main means of controlling the land market. If the land policy system were to be reformed along the lines contained in this report there would be very little need for the compulsory purchase of land and it would cost very little to ensure that in all cases where land has to be compulsorily acquired cash is paid. I believe that disposes of the argument put forward by the Minister. If he was prepared to accept the other recommendations contained in the inter-departmental committee report there would not be any need for the substantial amount of money which the Minister says is necessary to purchase land by cash.

What exactly do the Land Commission and the Government intend to do with the land they acquire by using the £25 million worth of land bonds? I draw the attention of the House to another recommendation of the committee on land policy when they said:

We now further recommend that the initiation of new land acquisition activities by the Land Commission should cease forthwith and the Land Commission should disengage themselves to the fullest degree possible from the acquisition cases at present being processed.

Obviously the Government have again decided to disregard that recommendation made to them. The committee went on to say:

In so far as the Land Commission have land on their hands the land should be divided in line with the criteria outlined by them in relation to their proposed register of priority entitlements to land.

They also said:

We recommend that whatever measures are necessary be taken to ensure that, in the main the selection of allottees and the resale terms be based on the criteria we have set out in Chapter seven for inclusion in the proposed Register of Priority Entitlement Land Applicants.

The criteria set out were that anyone getting land should be working to a specific, documented farm plan, should be keeping records, should be a fulltime farmer or, if a part-time farmer, should only have a part-time job taken on for part of the year on a temporary basis. Land should not be given to people with permanent pensionable jobs outside agriculture. We should ensure that the land given out will be used substantially better than it was being used by the previous owner. In many cases where the Land Commission have given out land, the land is used in a worse way than when it was used under the previous owner. In many cases also within a short time after land has been distributed by the Land Commission at considerable public expense it is redistributed on the 11-month system by the person who got the land from the Land Commission.

I know of a case in the west where not so long ago three single working ladies owned land which they farmed part-time. There was considerable agitation in the area by local people who felt that these ladies should not have the land. The land was taken over by the Land Commission and they were paid in land bonds. Every £100 they received in land bonds would now be worth £80. The land was divided and given to men who also were part-time farmers. Could we have anything more ridiculous than to take land off people because they were part-time and then to give it out to people who also had other jobs? These ladies came to the conclusion that the land was taken from them because they were women and part-time, even though it could be given out to men who were part-time because it was felt that in farming part-time men were better than part-time women so far as farming is concerned. I do not accept that. The day when brawn was the guiding criterion in working the land has long since passed and women are able to work the land as well as men. The idea that public money should have been used to almost confiscate the land from these ladies on the grounds that they were part-time and then to give it to part-time farming men is totally unjust. Public money should not be used, whether in cash or in land bonds, for that sort of thing.

Would the Minister make a clear statement on what criteria will be used by the Land Commission in giving out land? Will they use the criteria that existed for years, whereby it was considered that 45 adjusted acres was the target acreage and that anybody who had more than that would not get any land? It was all related to this magical figure of 45 adjusted acres. That policy existed for the last 20 years. Will that be the policy or will it be the policy in this report of the interdepartmental committee on land structure reform which sets out detailed proposals which do not restrict the matter to acreage but are based on whether or not, on their record or planning, people are capable of working the land properly regardless of the acreage?

There is nothing in the Minister's speech which sets out what policy will be pursued in relation to the allocation of land. The Minister says that it will be acquired almost as if people should know without being told what it will be acquired for and what sort of people will get it. Everybody realises that the criterion of the 45 acres which was appropriate 20 years ago is not appropriate now. In modern farming, with the onset of mechanisation and with the standard of living which can be expected by people if they leave agriculture, an acreage level which was acceptable 20 years ago is out of date now. There is a growing situation now, because people are getting married younger, where a farm must support two families. There are many cases where the father of a family is 50 years old with a wife and a number of young children and the son to whom the farm is being left is 25, married with a number of children, and both families have to be supported by the farm. To say that two families can be supported fulltime on a farm of 45 acres is rediculous, although that apparently is the policy the Land Commission are pursuing in relation to the distribution of land. There is no feasible level of intensity in agriculture that would enable a reasonable income to be derived from a farm of 45 acres for two families. The policy should be to distribute the land to people who will make substantially better use of it than the previous owner.

At the moment when the Land Commission acquire land they are under pressure from local interests, and the only way that a Land Commission official can get out with his scalp intact is to divide the land and give a little bit to everyone. The person who is a road ganger gets a bit of land, the fulltime farmer gets a bit and the fellow with a job 20 miles away gets a bit: they are all treated the same regardless of their capabilities. The official does not want to be on bad terms with any of the people so the land is divided equally regardless of whether it will be properly used or not. In many cases within a few years the land is set on the 11-month system and the man who should have got all the land in the first instance, because he would have made proper use of it, finds himself taking the land on the 11-month system from the other people. The situation is back to square one. The farm is not properly used because the man cannot invest in it since he only has it on an 11-month basis.

The whole idea behind the compulsory acquisition and distribution of land seems to be that the Land Commission treat it as if the land was a social good where they give out little bits of it to everyone to keep everyone happy. That is not the proper purpose of the land policy, which should be to make sure that the land is used properly and is producing the maximum amount to give employment and income. Land should not be used as a means of rewarding deserving people because they were good in the past and it should not be given out just to keep everybody happy. Land should be given on the basis that it will be used properly but we have not had from any Minister an unambiguous statement that that will be the policy followed by the Land Commission in distributing land. Neither has there been any mention of any such policy by the Minister today when he is asking us to agree to the provision of an extra £25 million for purchasing land. He has not seen fit to tell us effectively how the money will be used. We should insist on a clear statement from the Minister in this regard and if such a statement is not forthcoming in reply to the Second Stage, I shall press him again on the matter on Committee Stage and, if necessary, on Report Stage.

We must bear in mind that by far the largest proportion of land changing hands in any years is by way of transfers within families. Only 0.3 per cent of the land changing hands is sold in the market place. Unfortunately, in many cases the transfers are much too late. There are many farmers who do not inherit the farms on which they have been working until they are as old as 45. This happens because a father who may be 80 may be afraid to pass on his farm to his son because of not trusting the son not to send him to the county home. Consequently, the son does not inherit the farm until the father dies. In such a case the son is not likely to be married because he could not be sure of the father passing the farm to him eventually and, therefore, had not the confidence in himself to be able to support a wife and family. The result of this situation has been that in many parts of rural Ireland men did not marry. The supposedly loving fathers were either too mean or too untrusting to hand over the land or, alternatively, the son had not won the confidence of the father to a sufficient degree to encourage the father to hand over the farm and to be confident that, having handed it over, he would not be sent to the county home in the event of disagreeing with the son later. This situation is a very sad commentary on family relations in what is supposed to be the most Christian of societies. In addition, there is the problem that the older generation have not enough confidence in the younger generation in regard to the working of the land. This is a sad state of affairs and one which goes much deeper than simply considerations of agriculture. It is something that affects the whole structure of the community in rural Ireland.

I do not claim to understand the situation fully but it is most unfortunate that people can misunderstand and distrust members of their families with whom they have lived for many years to the extent that they are not prepared to transfer land to them.

A step towards rectifying this situation of late transfers was taken by the previous Government when they introduced the farm retirement scheme. That was a very attractive scheme. It still is attractive in many ways but it is not being sold by this Government to the degree to which it should be sold. One fault I find with that scheme is that the pensions have been indexed to the cost of living whereas other pensions have been indexed to general incomes in the community. The result of this situation is that pensions under the farm retirement scheme have increased by about 60 per cent since the scheme was introduced, whereas old age pensions in that time have increased by about 115 per cent. The pension payable under the farm retirement scheme should have been increased to the same extent as pensions payable to any other category of pensioners. I know that the letter of the law has been adhered to because at the time at which the last pension rate was set—about a year ago—the 60 per cent figure reflected approximately the increase in the rate of the cost of living from the time that that pension had been introduced but it was not related in any way to pensions being paid to other people. This is unfair since pensioners in either category have similar expenses. Therefore, the terms of the scheme should be amended in a way that would ensure that the pension will be linked to the old age pension rather than being linked to the cost of living which is not an adequate criterion to which to relate the level of pensions.

There is a need also to devise legal arrangements which would encourage the transfer of land from older farmers to younger farmers. Share farming is a concept that should be pushed very hard. Already, in a number of parts of the country, there have been legal arrangements in this regard between fathers and sons, between uncles and nephews and between people who are not blood relations. Under these arrangements the younger farmer works on the farm in conjunction with the older farmer. Perhaps the younger farmer will provide the stock and there is a sharing of profits between him and the older person though the younger farmer will do most of the work. The great merit in this sort of arrangement is that there is no possibility of the younger farmer sending the older one to a county home since the older one retains the ownership of the land and there are provisions usually which ensure that the older person is maintained properly in his own home. But the younger farmer has certain assurances also that the older farmer will not break the agreement and give the land to someone else. The Minister should draw a number of model farm partnership agreements on those lines, envisaging the various problems which could arise in different systems of farming where different types of agreements would be appropriate. Having drawn up these model leases to encourage the transfer of land from older to younger farmers, the Government should provide a financial incentive, perhaps a cash payment, to the older farmer to enter into such an agreement. If he entered into an agreement which would comply with broadly derived characteristics, such as I have mentioned, the money would be paid.

The Minister might say: "If this idea of share partnership between younger and older farmers as a means of transferring land from the older to the younger farmer is such a good idea, why is it not going ahead?" The only way it could go ahead would be if two people thought it up on their own and went to a solicitor who was some sort of a genius and knew all the different possibilities and problems that could arise and had a ready-made agreement which he handed to them and said: "Here is your agreement. Sign it here and the job is done." We all know, without any disrespect to the other branch of the legal profession from the one of which I am a member, that solicitors have not got this sort of agreement waiting on the shelf to be handed to farmers, because there is no demand for it.

The first man who goes into the office will come up against a blank wall in getting effective assistance towards entering into an agreement. The only way in which this blank wall can be broken down is for the Government to take the initiative and do the legal work, and come up with a variety of model share farming agreements. They could then say to the solicitors: "The work has been done for you. Interview your clients and, if they want to change some of the terms, you can change them. Basically we have done most of the work for you and, if you can get them to agree to terms of an agreement along these lines, we will give a cash grant to the older farmer to encourage him to enter into the agreement." That would have a tremendous effect in getting some of the land better used.

Deputy O'Toole mentioned some other cases in which this could be done. All over the west of Ireland, acres and acres of land are owned by people living in England, America or Dublin, or in some other way distanced from the land. They have it set and are getting the minimum income they could possibly get. They are getting grazing or letting money from it. In some case they probably have not got it set and they are getting nothing at all for it. Admittedly it is costing them nothing, because many of them do not pay rates. If they are in any way normal, they would like to get something from it, but there is no way they can do that. If they let it on the 11-months system they will not get an income.

If there are one, two or three progressive young farmers in a parish in which there is absentee owned land they should be offered the possibility of entering into some sort of agreement to enable them to get a far more substantial income from the land. By virtue of the land being properly used, as it would be by a young farmer who was assured that the agreement would last for a considerable period, he would get a substantial income. If he could enter into an agreement with three or four absentee landlords, as we will call them for the sake of description, the production of that land would be increased tremendously. The income derived by the local farmer and by the absentee landlord would be improved substantially, and the production and the employment in the food processing industries as a result of the increased production would be substantially improved. To get this sort of thing going the Government must take an initiative and say: "We will offer a tax incentive to the absentee landlord and to the younger farmer to enter into this sort of agreement. We will provide a model agreement to assist in this type of transfer." Obviously the model agreement for a young farmer entering into an agreement with three or four absentee landlords in his area would be different from the type of model agreement I described earlier which would be between a father and a son, or an uncle and a nephew, because the eventualities which would arise would be different. The Land Commission have the resources and the legal expertise to draw up agreements to suit that situation too, and that is what they should do.

Some people have great faith in the idea of long-term leasing of land. Personally I do not believe long-term leases are the answer. They may be the answer in some cases. I started out from a position in which I was very much in favour of them, but there would be problems about the repossession of land by the landlord at the end of the period. The outgoing tenant would have made improvements to the land and would not want to leave it. Political pressure would build up on the part of tenants who did not wish to give the landlord the right to repossess. This would be so great that the landlord could lose the right to repossess and if it were thought once that the landlord could lose the right to repossess, he would never let it in the first place. The only way in which long-term leasing of land will get going is if castiron guarantees are given that, at the end of the lease period, the landlord will definitely get the land back.

There would be political difficulties in giving the type of castiron guarantees which would be necessary to get long-term leasing really going. I do not think it is the answer the inter-departmental committee thought it would be. The type of share agreement I envisage, where both parties would share in some sense in the management and in the profit, rather than one party receiving a fixed rent regardless of what happened, would have an attraction which long-term leasing would not have. The fact that they were sharing the profits would create a community of interest between the two partners which would be such that the problems of the termination of the lease would not be as acute as they would be under a long-term leasing system.

Therefore, I urge the Minister to press ahead with share farming arrangements along the lines that I have mentioned. We in the Fine Gael Party are working on a policy on this matter. If the Government do not do it pretty quickly, we will come up with a policy. I put the Minister of State on warning that, if he does not come up with a land policy pretty quickly, we will do it for him, and we will do it much more quickly than his Government's record of inactivity since they took office would indicate. Perhaps I should not give the Minister of State that warning, but I am giving it to him in the interests of the country.

I believe that there are votes in this. If a policy is produced on land structures, and if it is seen to be a fair one, and one which will use our land properly, votes will be won on such a policy. If the Minister's party do not do it quickly, we will do it. The fact that they have introduced this Bill suggests that they have no intention of doing it with any speed. They have that warning now. If they do not do it, something to their disadvantage will occur.

I should like to raise with the Minister the question of the division of commonages. I think the figure is that there are 50,000 hectares or about 150,000 acres of land which are held in commonage. Whether there are three, four or five owners, common land is never used properly. Nobody has an interest in fertilising it. If you fertilise part of it, there is no guarantee that stock owned by somebody else will not eat all the grass in the area you fertilised. It is not divided and nobody ever fertilises it. Nobody ever reseeds it. It gets very badly run down and is never used properly.

It is also very dangerous from a disease point of view. Herds are mixing, some of which have disease and some of which do not, with the result that the disease spreads from the diseased herds to the clear herds. When the cattle from the clear herds which have been mixing with diseased cattle are brought back to their own farms at the end of the season, they mix with clear cattle and the disease spreads still further. From the point of view of utilisation and animal disease, commonage is a bad thing. Action must be taken by the Government to divide the commonages.

I should like to ask the Minister if he would consider removing the present provision in the law whereby one commonage holder has the right to veto an arrangement for the division of a commonage. If one person objects to a voluntary agreement for the division of the commonage that is the end of the matter. The commonage cannot be divided. There should be a provision to ensure that where a substantial majority of commonage holders want to divide, simply by forming that majority and by agreeing to the matter they should be able to enforce a scheme of division of the commonage. I am thinking of something on the lines of a group water scheme system. At present the only way commonages are divided is when the Land Commission acquire them. We should not have a situation where the Land Commission have to get involved bureaucratically by becoming the owner of the commonage and dividing it. It would be far better if the people themselves could divide it. If we could change the law to remove the unanimity rule that exists and if we set out certain criteria to be used for the division of commonages, a considerable amount of land would be used properly.

I regret that this Bill has been introduced. We should have a Bill introducing substantive reforms with regard to land policy. This Bill is a prolongation of the existing system, in particular a prolongation of the land bond system of land acquisition. In my view this is nothing more than the legalised expropriation of land from people who justly own it.

Minister of State at the Department of Agriculture (Mr. Hussey)

I should like to thank Deputies opposite for their contributions. When I introduced the Bill I did not go into great detail in relation to general land policy because I felt this was not the time for that. The Bill is a simple one, merely increasing land bonds from £80 million to £105 million.

Many things have been said here in relation to land policy in general. As I said earlier, land bonds have been used by the Land Commission as a medium of payment for lands acquired by them for more than 50 years. A total of 1,350,000 acres have been acquired and paid for by the Land Commission under this system. This is a considerable area of land which has been made available to small farmers to enable them to increase their holdings and to bring them up to a viable standard. I wonder if the Land Commission could have achieved this if we did not have this system of land bonds, distasteful though the system may appear to some people. The alternative would be a massive cash provision funded by borrowing and increased taxation and this is something the Government could not contemplate. When one considers the prices obtained for land in recent years one can visualise the huge allocation of money that would be required by the Land Commission if they were to pay in cash. Other services such as health, social welfare, housing and so on would have to suffer. Taxes would have to be increased. I wonder if the PAYE sector would agree to this? Would the people who protested last year and this year with regard to increased taxation accept this as a solution to the problem? I doubt it very much.

The £25 million proposed in the Bill is estimated to be adequate to pay for such land as the Land Commission with their present staff resources will be in a position to acquire in the next two years. The question of how the future land settlement programme is to be financed obviously is one of the many issues which the Government will have to consider before deciding on the policy to be adopted.

Deputy Bruton referred to the allocation of land. With regard to this matter, priority will be given to deserving, progressive small farmers. It is only right that land usage should be the main criterion in the allocation of land. As Deputies know, too often in the past land has been given to people who made very bad use of it. Those of us who have an interest in land know this is the situation. Many of the people who were given land let it in a short time and allowed it to get into a bad state. We should not allow this to happen again when land is so valuable. It has been stated that land is our main resource and our most important asset and it is only right that usage of the land should be the main criterion in allocating it.

I hope so. As far as I remember, the 1965 Act took about two years to go through the House. I hope this one will not take so long but, of course, it will depend considerably on the amount of support that will be given by Deputy Bruton and his colleagues. I am sure we can rely on the Deputy giving us his full support in getting the measure through the House as quickly as possible.

The Land Commission have been in existence for 100 years and nobody denies the value of the work done by them. The problems to be faced today are not the same as those with which the commission have had to grapple in the past. Clearly there is a need to re-think our approach to land restructuring and to formulating a policy tailored to the needs of the change situation. That is the aim of the proposals before the Government.

The £25 million being sought under this Bill is necessary. It will help us to pay for the lands we propose to purchase during the next two years. If further funds become necessary at any time —Opposition speakers have said that the amount now being sought is not sufficient—we will have to come before the House again for more money. I hope it will be accepted that the £25 million we are now looking for is adequate.

The Dáil divided: Tá, 58; Níl, 26.

Tá

Ahern, Bertie.
Barrett, Sylvester.
Brady, Gerard.
Brady, Vincent.
Briscoe, Ben.
Browne, Seán.
Burke, Raphael P.
Callanan, John.
Calleary, Seán.
Cogan, Barry.
Colley, George.
Collins, Gerard.
Conaghan, Hugh.
Connolly, Gerard.
Crinion, Brendan.
Daly, Brendan.
Doherty, Seán.
Farrell, Joe.
Faulkner, Pádraig.
Fitzgerald, Gene.
Fitzsimons, James N.
Flynn, Pádraig.
Fox, Christopher J.
Gallagher, James.
Haughey, Charles J.
Herbert, Michael.
Hussey, Thomas.
Keegan, Seán.
Kenneally, William.
Killeen, Tim.
Killilea, Mark.
Lawlor, Liam.
Lemass, Eileen.
Lenihan, Brian.
Leonard, Jimmy.
Leonard, Tom.
Leyden, Terry.
Lynch, Jack.
McEllistrim, Thomas.
MacSharry, Ray.
Meaney, Tom.
Moore, Seán.
Morley, P.J.
Murphy, Ciarán P.
Nolan, Tom.
Noonan, Michael.
O'Connor, Timothy C.
O'Hanlon, Rory.
O'Kennedy, Michael.
O'Leary, John.
O'Malley, Desmond.
Power, Paddy.
Reynolds, Albert.
Smith, Michael.
Walsh, Joe.
Wilson, John P.
Woods, Michael J.
Wyse, Pearse.

Níl

Barry, Peter.
Begley, Michael.
Belton, Luke.
Bermingham, Joseph.
Bruton, John.
Burke, Joan.
Cluskey, Frank.
Collins, Edward.
Corish, Brendan.
Cosgrave, Michael J.
Creed, Donal.
Crotty, Kieran.
D'Arcy, Michael J.
Deasy, Martin A.
Desmond, Barry.
Fitzpatrick, Tom (Cavan-Monaghan).
Gilhawley, Eugene.
Griffin, Brendan.
Hegarty, Paddy.
Keating, Michael.
Kenny, Enda.
L'Estrange, Gerry.
O'Brien, Fergus.
O'Toole, Paddy.
Pattison, Séamus.
White, James.

Question declared carried.

Tá, Deputies Moore and Briscoe: Níl, Deputies L'Estrange and B. Desmond.

Agreed to take Committee Stage on Wednesday, 23 April, 1980.

Dáil Éireann díospóireacht - Tuesday, 15 Apr 1980

Land Bond Bill, 1980: Second Stage.

Tá

Níl

Dáil Éireann díospóireacht -
Tuesday, 15 Apr 1980