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Dáil Éireann díospóireacht -
Thursday, 20 Nov 1980

Vol. 324 No. 6

Supplementary Estimates 1980. - Vote 39: Agriculture (Resumed).

Debate resumed on the following motion:
That a supplementary sum not exceeding £39,783,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1980, for the salaries and expenses of the Office of the Minister for Agriculture, including certain services administered by that Office, and for payment of certain subsidies and sundry grants-in-aid."
—(Minister for Agriculture).

Before Question Time I was asking how we could ensure that those young people who are going into farming have the best possible education. It is recognised that in the past those who entered agriculture did not have such a good standard of education in technical and other areas. Deputy D'Arcy felt we needed more agricultural colleges but I expressed the view that the existing system at primary and second level should be used to ensure that the standard of agricultural education was enhanced. With the involvement of the advisory services and local agricultural instructors it should be possible to introduce some scheme in the immediate future. The winter farm schools and the efforts of ACOT are a help but, obviously, more must be done. The Minister should, as far as possible, make the necessary funds available.

Deputy Bruton belittled the interest subsidy announced earlier this year. While it is clear that more has to be done in that area Deputy Bruton should have suggested a different scheme rather than belittle the one that has been introduced. I should like to categorise the areas where the Government will be giving help because there are essential differences between the categories of farmers who are in financial difficulty. I regard the farmer who is carrying out essential building and land improvement in the first category of importance. The scale of that type of development in the last six or seven years has been enormous by any standards. The amount of money expended in providing winter facilities and in land improvement was such that we can carry greater livestock numbers and house them in the winter. In spite of the economic climate and other pressures we are poised, because of that phenomenal development, to carry greater stocks. That will be of enormous benefit to the farming community and the country.

The second category I should like to refer to are the farmers who purchase land to enlarge their holdings, particularly small and medium sized holdings. Unfortunately, where such land adjoined them farmers paid more than the value for the land. They got help from the financial institutions, particularly the banks who must share part of the responsibility for the excessive amounts paid for such land and for setting up unnecessary competition. Help must be given to that area. In some instances borrowings reached limits of £1,000 per cow in the dairy sector and up to £500 per acre for other farming enterprises. The repayments on loans of that order are not within the capacity of many farmers. Therefore, farmers welcome the restructuring of loans that is taking place. Inevitably, there will be a small percentage of farmers, even with the restructuring, who will not be saved from the pressures that exist with the result that the amount of debt will increase. Special help is needed in such cases because many of those farmers acted on the advice of local instructors and successive Governments in carrying out major developments. It is because they were the pioneers in such work that any disaster which affects them would have the effect of discouraging others who have not improved their holdings.

The third category I should like to refer to are those who are big in farming already and who made an effort to enlarge their holdings. It is not easy to expect any Government in the climate that exists at present to carry the can in such situations. I am not saying that I would rule out such people completely but they would not be as high on my priority list as the other categories I referred to. When referring to prices and the efforts being made in Brussels to market our agricultural produce generally I mentioned that it is hard for the public generally to reconcile certain facts about the world scene. It is hard for the average person to reconcile the fact that there are mountains of this-and-that in Europe with the fact that a quarter of the world's population is hungry and that 17,000,000 children will die of hunger in the next five years, if existing conditions continue.

The food aid programme for the Commission to be worked out in Brussels must give scope for the transfer of some of those resources to countries who need them although, admittedly, the best solution is for those countries to develop themselves. In recent times North African countries, Libya, Tunisia and Morocco, have made significant sales. Here I wish to pay tribute to the Purcell brothers of County Tipperary for what they have done this year in establishing markets for store and beef categories in Libya and Tunisia. They helped very considerably in keeping the price of cattle up all during this year. While the numbers of exports of live stores are controversial, there are two shades of opinion on it. In all the experience we have here, it is necessary to safeguard the prices by having a percentage of our cattle exported live. It is very important that we maintain this in future. It is important, too, that the sales of those cattle do not reach any more than the necessary levels, in order to maintain healthy competition with the processing units.

I want to welcome a statement by the Minister although it is not dealt with in the Estimate. I anticipate the same degree of leniency from the Ceann Comhairle as seemed to be apparent in earlier discussions. I welcome the statement by the Minister that the White Paper on land policy is about to be circulated. This is an area which comes under the Department of Agriculture and it is awaited with some degree of hope and expectancy by many people. The existing Land Commission evolved from a series of land Acts at the end of the last century which were updated and strengthened at five or six different periods up to about 1965. They cover tenant land purchase, compulsory acquisition, land restructuring programmes, controlled sub-division and a farm retirement scheme, to mention a few. There is no doubt that in many areas the Land Commission have made a significant contribution; equally it is necessary for the future that it be restructured and brought up to date so that it may deal more effectively with the land problems that are there. The task is formidable. There are no easy solutions. Sixty five per cent of our holdings are under 50 acres. Twenty three per cent of farmers are over 65 years. About half the holdings in the country are fragmented and are concentrated in the west and north west. Up to 50,000 farmers have no direct heirs.

I could give other statistics but those are enough to indicate the task that lies before a rejuvenated Land Commission, which will tackle them in the future. It is clear that all these problems cannot be solved by a State agency, only a small percentage of land comes on the open market each year. About 92 per cent of land holdings transfers take place within the family or extended family. We have to accept that it is extremely difficult to devise a national strategy for land use, for fragmentation, poor farm soil, and to have a policy that will be sensitive to regional needs. We hope that the discussions which will take place on the White Paper will be helpful in evolving a system which can tackle the problems I have already mentioned. It is clear that a curb is necessary to prevent bigger farmers from buying more land. Proposals in this regard, if they are effective, will be welcome.

One of the areas that should be tackled more vigorously by the Commission is fragmented holdings, even where there is no land for sale. We all know of clusters of houses with fragmented holdings and individual farmers with land which is totally mixed. The Commission should involve itself more in encouraging farmers, wherever possible, to consolidate their holdings. Macra na Feirme and other interested groups should also help farmers to extract the maximum potential from their land. Anybody who understands agriculture knows that that is only possible if all the land is together.

I would like to see a better division of commonages. They are a prime example of under-productive blocks of land.

The Deputy is really leaning on the Chair now.

I will leave it at that. I should like to thank you, a Leas-Cheann Comhairle, for your leniency which I half anticipated on the basis of earlier performance.

I should like to recap on a few of the things I have said. In spite of the economic climate, enough good work is being done and we have sufficient intelligent farmers to reap the benefits of earlier efforts. A formidable task faces the Minister, the Government and the European Commission if they are to help the agricultural sector and ensure that it surmounts the present difficulties.

This is not a time for looking back. The Government should act quickly and not allow a situation to develop where farmers feel it is necessary to mount a campaign of the kind some individuals in the farming organisations are advocating. The farmers would not win, the Government would not win, and the country would not win. Any scope in the area of releasing funds extracted from agriculture, or in the battle for price increases, should be availed of with speed.

It is clear from what I have said that a slowing down in agricultural expansion is not acceptable to the farmers, or the processing units which would be under-utilised and would become much more expensive to run with a consequent job risk, or to the trade unions who obviously have a direct interest in job security and new job potential. In spite of the difficulties we can have an orderly and balanced expansion oriented towards the areas where the best advantage lies.

The farming organisations should not get involved in a debate about the national understanding. In consultation with the trade unions they should pay what they can afford to the people who work for them and provide services, and not endanger the relationship between the farming and the non-farming sector. The country is too small to play one section against the other. I appreciate the pressures on the farming leadership and on farmers. Statistics show that one-third of our farmers earn less than £2,000 a year. There is no denying that there are problems which have to be sorted out. I doubt that they will be sorted out by entering into a debate on whether the terms of the national understanding should be implemented.

I suppose talk of doom and gloom is inevitable in certain circles. It is fundamental for us to find out where the advantages are and to build on what has been done already. Farming has known ups and downs before, and we must ensure that the vast bulk of our people engaged in the agricultural industry ride through the storms and are poised to take advantage of the good prospects for the future. Deputies on all sides of the House should be committed to suggesting ways and means for making that possible. That collective will on the part of Deputies and the Government will be matched by the farming community in the resilience and the resourcefulness which traditionally they have shown in the past, and we will be ready to march forward when the recession is over.

I often wonder whether all the repetitious speeches made in this House have any effect on the problems which confront us. This is a Supplementary Estimate for £39,783,000. In introducing this Estimate the Minister realises quite clearly the level of the problems facing the farming community. My remarks today will be in the context of the western farmer, the smaller farmer who has been neglected down through the years, and who is not of as much concern to the bigger organisations as he should be.

Yesterday this city witnessed a demonstration by the young farmers of Ireland. Many thousand of them travelled to Dublin from all parts of the country to show their dissatisfaction and discontent about Government inaction in the agricultural sector. These are the young men and women of the future. They hold the agricultural reins in their hands, as it were, and from their display yesterday it is obvious that the enthusiasm and fire which they showed when they took over their various holdings of land have been dimmed and deadened by Government inactivity and by the factual situation which confronts them.

The Government's apparent inability to grapple with the agricultural problems for the benefit of the entire community is weighing very heavily upon their minds. The method by which they displayed their discontent and dissatisfaction yesterday is to be commended. There was not an ugly incident in it. If many of these young people were brought to different parts of this city they would see poverty of a different kind and they would probably realise that they are not alone in the scale of problems confronting them.

If our agricultural problems are to be sorted out political decisions must be taken in co-operation with the different bodies and the farmers themselves. Political decisions can be taken very quickly, but sometimes they take many years. Last week in the Minister's speech on the intervention problem he said:

Because of the Community's budgetary situation and financial constraints, this permission was not forthcoming and I felt it necessary to take urgent alternative action to support the market.

That is a very well-written phrase and it is quite common in speeches by various Ministers down through the years. It is also fair to say that because of this country's budgetary situation and financial constraints the Taoiseach and the Minister were not very anxious to remove the resource tax or the rates levy over £40 valuation in the early part of the year. Even though the budgetary situation and financial constraints were there, when it became politically necessary to make the decision it was made overnight. Extra money will have to be borrowed or found somewhere else to cater for the concession given to farmers with valuations between £40 and £60.

It is perfectly in order to speak about airports and huge industrial development work and other works of that nature, but if we have not got adequate numbers of livestock and if the farmer is not doing what he should be doing, the whole community will suffer.

A problem facing agriculture is the lack of adequate markets. It is pointless for a farmer in the west to buy an animal at £42 a hundredweight, keep it for six months and then sell it for £30 a hundredweight. That is not the way to run a business, and unless there are incentives to the farmer to keep the necessary livestock, including a decent market, we will not have the numbers of livestock that we require nor the resultant spin-offs throughout the community. It might be in the Minister's interests to call all the interested marketing bodies together, the co-ops, the farmers, the factories, the processors and so on to look at the possibility of forming a semi-State organisation such as Bord Bainne to draw up an intensive marketing programme that will ensure that if a farmer buys an animal there will be an increased price for it when it is resold. It is disheartening and discouraging for a farmer to have to buy animals with borrowed money, on which he is paying a high rate of interest, and to find having looked after the animal for a considerable time, that because of a slump in the market prices and the lack of a guaranteed market the animal must be sold at the price at which he bought it or at a reduced price.

Subhead A3 of the Estimate relates to travelling and incidental expenses of £975,000. The people in the veterinary offices throughout the country have been waiting for travelling expenses for up to 14 months. Although these expenses will eventually come, they are operating out of their own pockets. That is something that the Minister should deal with.

I was interested to hear Deputy Smith refer to the White Paper on agriculture because the Land Commission are not mentioned in this subhead even though they are of major importance particularly to western farmers who have fragmented holdings. It is necessary to give a decent level of finance to the Land Commission. In the west all of the estates on hands in the Land Commission have been scheduled for division. This means that Land Commissioners and inspectors have not got the amount of work to do in division that they could have had, had they been given sufficient money to buy more land.

Government speakers mentioned that we did not suggest alternative progressive policies. I will make a few suggestions. In relation to the sheep subsidy payment the Minister could go back to Brussels and say that all of the disadvantaged areas for this purpose should be classified as being hill areas. At the moment there are different levels of payment because of the classification of different areas in the one county. It is ludicrous to have in an area clasified as being totally disadvantaged different rates of payment. It would be in the interests of sheep farmers and of the Minister if something could be done to ensure that in an area classified as being disadvantaged, sheep subsidy payments will be as for a hill area, thereby enabling farmers there to qualify for the highest level of sheep subsidy payment.

In relation to cattle headage payments, the Minister announced that there was to be an increase. An additional £8,432 million is now being sought under this subhead to finance the increased grants. The cattle headage payments are important to western Ireland. An area classified as a disadvantaged area for the purpose of this payment is obviously disadvantaged. All of County Mayo is included in the disadvantaged areas scheme, yet people who are unfortunate enough to have a land valuation of over £40 must pay £17.46 rateable valuation per £, which is very much over the national average and is almost twice what has to be paid in County Meath, taking into account the quality and structure of the land concerned.

The cost of administering the cattle headage payment scheme in the disadvantaged areas this year is estimated at £1.08 million, a sizeable sum. The Minister understands the problems associated with cattle headage payments. In reply to Parliamentary Question No. 405 of 21 October the Minister supplied detailed and interesting information about cattle headage payments. In County Cavan 1,037 applications were received and the number of inspectors was five; in County Clare there were 6,559 applications and the number of inspectors was 14; in County Cork the number of applications was 4,925 with 12 inspectors. It varied between 847 applications in County Limerick with three inspectors to 898 applications for Longford with six inspectors, to 15,480 applications for County Mayo with 31 inspectors.

There are a huge number of applications from County Mayo and this indicates the inherent problems that Mayo farmers face. With 31 inspectors to cover that number of herds, if one inspector were to inspect ten herds per day, taking into account geographical location and the size of the herd, it would take two months. I have been informed that many farmers who apply for cattle headage payments are forced to sell their cattle before the inspection takes place. This was raised with the Minister and his predecessor and some concessions were made in relation to an area date for cattle headage inspections. If a farmer has his annual herd test in August he would be enabled to sell his cattle for up to 30 days afterwards, he does not have to pay for his annual test and he then waits for his cattle headage inspection. This may not come for two or two and a half months. In the meantime if he has no out-buildings his cattle will start to plough up the land to eat the grass and to consume winter fodder whether it is silage or hay. If there is a drop in the market and if a farmer does not have enough fodder to tide him over until prices rise he is forced to sell his cattle at the market price. He runs an enormous risk of losing heavily while waiting for a cattle headage inspection which may not take place for two and a half months. I know that the Minister brought in inspectors from outside areas to help in disadantaged areas and that was a welcome innovation. I am sure the Minister will agree that it is too long to wait from September for two and a half months if at the end a farmer is forced to sell his cattle at whatever price he can get at the market.

The farmer must pay for his test and when he calls a vet and if the market price drops the increase given in the cattle headage unit payments will not be of much advantage to him. The Minister could take up with his counterparts in Europe the fact that the cattle headage payment scheme should be changed to a headage payment scheme and give a decent incentive to a farmer to keep an increased number of animals from his previous year's application. It is based on a unit idea at present. If one has to keep calves from birth and rear them it takes care, time and money. If a proper incentive were given to increase the number of animals not alone would one have the same number of applications for the headage grant but there would be greater encouragement to keep a higher number of animals. It could be operated on an averaged out basis over the past three years but either way a decent incentive should be given for every animal kept over and above last year's application.

The Minister should consider consulting with the vets and send around inspectors with them at the time of the annual inspection because all the information necessary for headage application is taken down at the annual test by the vet. It would save time from the farmer's point of view in not having to round up herds from fragmented holdings. It would save administration to some extent. I am not sure what problems might arise from that but it is a suggestion that bears some consideration in the light of complaints by farmers that no matter what concessions the Minister may give the headage inspection takes place too late.

In County Mayo, which has the largest number of applications, this is a constant source of complaint. Farmers feel the cattle headage inspections should be carried out at an earlier date than they are at present. It would eliminate the need for having to keep an animal for six months if one were to go on a head basis. The system of cow calving in the west is not as sophisticated as we would like and often calves do not arrive until March or April. If they are to be kept for six months to qualify for a unit allocation under the scheme they must be kept out until August or September. I hope the Minister bears my sugestion in mind.

I was glad to note that the Minister mentioned that the EEC were giving permission to allow into intervention the eight-rib cut. That is a welcome innovation because it allows one to go to the continental market as well as to the British one. I hope it will benefit the farmers.

In relation to the winter fodder scheme for £600,000 I have had discussions with people in co-ops from the west in relation to the nitrogen subsidy. A certain amount of nitrogen was bought but due to the very adverse conditions a lot of it was not spread and is still lodged in barns and sheds on many farms. It is not the Minister's fault that the weather was as bad as it was. The initial reaction to the announcement of the scheme was favourable because conditions were so bad at that time that farmers were willing to grasp any straw that came their way. I do not know if it will be as successful next year if it is re-introduced. It was a method of moving more nitrogen out of NET than might have been moved in the normal way.

The decision to abolish the lime subsidy last year was not a favourable one, particularly for western farmers. It is ironic to think that the nitrogen scheme was introduced to bring about a certain improvement and yet it is well known that the basic inadequacy of all soil in the west is lime. The Minister should consider re-introducing this subsidy either in conjunction with the winter fodder scheme or on its own. The type of soil that comprises many western farms is such that when nitrogen is spread to any significant degree it requires a further dressing of a different fertiliser the following spring. That will force the farmers to buy extra fertiliser and whether that is good or bad has also to be borne in mind.

Another source of complaint from young farmers who inherit or are lucky enough to be able to purchase holdings, or get them from the Land Commission, is that they find it difficult to get sufficient money to reclaim, fertilise, stock their holdings and so on. The Minister should give serious consideration to that. Particularly in relation to disadvantaged areas the Minister should look at the situation regarding long-term low interest loans for small farmers who would not have the capacity to borrow that larger farmers would have. If a young farmer was to buy 20 acres at £1,000 an acre, which he probably would not get, at an interest rate of 20 per cent he would have to make a profit of £200 an acre to pay the interest. That does not take into account the fact that he would have to re-stock, fence and secure that holding in every possible way.

Low interest, long-term loans for smaller farmers in disadvantaged areas would be a very worthwhile innovation by the Minister. Deputy Smith mentioned the problem of communal division. I am not going to stray too deeply into it because, a Cheann Comhairle, I know your ruling on this matter, but it could be taken in the context of aids to farmers in certain less favoured areas.

That would be stretching it a bit. However, I will let the Deputy make the point.

He is a reasonable Deputy.

In relation to commonages and certain less favoured areas, it is an accepted fact that the use of commonages at the moment is not at all what it could be were they divided. The legal complications that arise where objections occur are something else that I trust the Minister will have looked into in his White Paper on agriculture or in some other context because that tends to slow up for many years potential development by young farmers. The proven quality of land in many commonages that have been divided speaks for itself, and even though the amount of commonage in some counties might not be great, in my county it is enormous and it merits very serious consideration and swift action from the Minister.

In the context of the very high loss of sheep in wintertime by hill farmers, at the base of many of the hills or mountains usually there are vast acreages of commonages and it might be in the interest of the Minister to look at the possibility of the creation of some sort of very large paddocks or holding pens that would enable these hill farmers to bring their sheep down in wintertime and feed them with resultant benefit from the decreased mortality rate. On a western hill the mortality rate among sheep in a severe winter is extremely high. Had the farmers the facility to bring these sheep down and hold them at much lower level in commonage divided by either the Land Commission or the Department themselves, that would be another innovation that would be to their benefit.

The North Connacht Farmers Co-Op Society produced a document which I understand they sent to the Minister in relation to County Mayo to which they compared a region in France. The report speaks for itself and I hope that the Minister will act on it. In western Ireland we had for the last four or five years a very significant increase in the number of farmers who went into milk production because of the incentives there. However, due to the enormous costs in farming and the prices they get for their produce, over 200 of them have gone out of production in the last 18 months. This is a very unwelcome trend and it should be looked at very seriously with a view to encouraging these people to go back into milk production if at all possible. I know that I am speaking in the context of milk mountains on account of very large production in other parts of the country, but it might be a proper incentive for the smaller milk producers if all of the levies imposed upon milk production were abolished in disadvantaged areas. A disadvantaged area must be recognised as such. With the advent of Greece and Portugal into the EEC the regional fund for development of disadvantaged areas might not be as great for this country in the years ahead as it was in the past.

Regarding disease eradication, the Minister made his hopeful prediction that TB would be eradicated inside five or six years. We all have to strive for this and the Minister is confident that with herd-owner co-operation this could be abolished in that time. With the very stringent regulations being laid down by the EEC and with the urgent necessity for this country to comply with those regulations, it is fair to say that from an effective point of view the 30-day test would be more adequate to bring about that situation. However, in practical terms the many complaints received in relation to the 30-day test would suggest that a 60-day test would be more appropriate, particularly for the western countries.

The amount of money spent on disease eradication in this country over the last 20 years must be enormous and I fail to understand how disease has not been wiped out. Somebody must have received that money and what is going on now should have taken place ten years ago or even earlier when money was worth its real value and probably would have had a much greater impact on the disease eradication programme than we have seen up to now.

Directive 161 on the farm retirement scheme, has caused enormous complications in western Ireland. If my memory is correct, one of the statements on the farm retirement scheme booklet was that development farmers did not qualify for land under the retirement scheme. Whether it is true or not, this has had the effect that many potential development farmers do not want to be classified as development because they fear that if land is available for allocation and division in their area they might not get it due to this directive.

Also if land comes on the market for division under the farm retirement scheme the fact that it must be recommended for division by the agricultural instructors is something else that has caused trouble. I understand that a list of potential applicants is circulated to the county committee or to the agricultural instructors in question and by the application of various mathematical equations a situation is reached where one or other person acquires or is allocated the portion of land concerned. Presumably this would be to bring the person into development status. I find that agricultural instructors are reluctant to do this because the tendency is that many people who use agricultural instructors for advice are the ones who naturally would have the greatest case, whereas if proper incentives were available for others to use the agricultural instructors also the land might go to a person who got advice from an agricultural instructor whereas he might not be the person most eligible to acquire that portion of land. The Minister should look at the situation again in the context of the allocation of land acquired or made available under the farm retirement scheme on the basis of it being divided by the Land Commission and not on the absolute recommendations made by agricultural instructors just because they are available to do it. This causes difficulty in rural Ireland. There should also be some amendment to the directive to allow farmers to acquire a payment for handing the land over to their sons.

There is no money in this Supplementary Estimate for that directive.

There could be an amendment to it which might help some farmers.

The Deputy will have to find another time to raise it.

I am proposing an amendment to it so that money will be granted to the son and to the farmer the same as is done in France and is contained in the submission sent to the Minister by some farmers on that particular issue. This is worth bearing in mind.

A lot of those matters should be kept for the general Estimate. We are dealing with land division, farmers' retirement schemes and everything else, matters which are not in this Supplementary Estimate.

I do not agree with the suckler scheme. I cannot see it being a success in the west of Ireland. It has created an extra structure within the Department. HEOs and other posts have had to be created for the operation of this scheme. There is a certain unease among farmers about the operation of the scheme. They would prefer something simpler with a greater incentive. Their experience of suckling calves in the west has not lead to a very favourable reaction to this scheme and I cannot see it being a success.

There is need to do something to encourage small farmers to continue in agriculture. It is not easy for a person who is forced to draw unemployment assistance to rear a family and make any profit from a small holding in the west of Ireland. Deputy Smith gave figures in relation to the size of holdings and the social implications of the people who are farming them. It is important to take a look at the small farmer incentive scheme, for which there is a very small allocation in the Supplementary Estimate. Many of the small farmers who cannot get into the farm modernisation scheme should be given some other incentive. It might be a good thing to reintroduce a small farmers' incentive scheme so that after a period of a few years they might be able, by decent production and honest effort, to have acquired a comparable income, or to have some other development qualification which would enable them to be classified in the farm modernisation scheme so that they can move on to a higher level of grant assistance.

I presume that under this Supplementary Estimate money will be spent by the Department in conjunction with the £300 million allocated by the EEC for the stimulation of agricultural development in the west. Many people get carried away by that large sum of money but they do not realise that it is to be spread over a ten year period over 12 counties, which means an allocation of £2,500,000 per county. There is not a Member in the House who could not point to where that £2,500,000 could be spent in any area. The money for forestry development——

The Deputy is finding a lot of new subheads which are not in the Supplementary Estimate. He has dealt with the west of Ireland in a big way and most of the matters he has raised are not in this Supplementary Estimate. He is getting tremendous latitude but he should not overdo it.

I thank you for giving it to me. The demonstration yesterday outside the gates of Leinster House indicates the very serious dissatisfaction of thousands of young farmers all over the country with the agricultural situation. It behoves the Minister and his advisers in the Department to take the suggestions offered to them to heart and to attempt to offer encouragement and hope to, in particular, the young farmers who are finding it very difficult to take a step forward in agriculture because of the situation which they are presented with every day.

I welcome the opportunity to discuss this Estimate. We welcome any additional expenditure allocated to the agricultural sector, particularly in the bad times they are having. I have never seen such a lack of confidence by the farming community in their future. As Deputy Kenny stated, the demonstration outside the gates of Leinster House yesterday afternoon is an indication of the despair felt by the young people engaged in agriculture. I have rarely seen such vigour in a demonstration. We have demonstrations almost every day in the week outside the gates of Leinster House when the Dáil is sitting. Most of them lack conviction because they are by way-out groups looking for ridiculous if not impossible things. Yesterday's demonstration showed a very strong feeling of dissatisfaction and it deserves a response. The Minister for Agriculture is expected to show that response.

The state of depression in the agricultural industry has to be rectified. There has to be an injection of more money into agriculture. While the money in the Supplementary Estimate is very welcome it is only peanuts compared with what is needed to rectify the grave problem which confronts us. Agriculture is our main industry and enough people do not face up to that fact. For far too long we have accepted a bias among the urban population where their rural brethren are concerned. This bias and lack of understanding must come to an end. Everybody must realise that there should be complete interdependence between the urban and rural sectors. All politicians have a duty to educate both sides to realise that one cannot survive without the other. I am often very annoyed to hear the unfair criticism made of the farming community by people who actually depend on them for their employment and a decent standard of living.

While I welcome the Supplementary Estimate, it is not sufficient. Everybody in the country, urban and rural, should face up to the fact that it is not sufficient.

At the moment we need a huge injection of finance into agriculture. If agriculture slides down the slope, so will the general standard of living, and incomes and the numbers of unemployed will dramatically increase. Everything will suffer. We must make a concerted effort to see that the lack of confidence is removed and a forward-looking plan of campaign is adopted. This forward-looking plan of campaign has not been adopted by the Government. So many of their pre-election promises have not been implemented. We have actually seen a 50 per cent decrease in the standard of living of the farming community over the past two years. This is an unacceptable state of affairs.

Any industry, whether it is agricultural or manufacturing, depends for its future on its raw materials, to latent resources. In recent years, the Government have handled that sector of the farming industry in a most inept manner. In 1980 when the agricultural industry should be in a state of prosperity, it is in a state of despair. For the first time in over ten years the raw material of that industry — herd numbers — has dropped to an alarming figure of less than seven million. While this situation continues, the future of agriculture must remain bleak. Positive steps must be taken by the Minister and the Government to redress that situation immediately.

We have reached a rather pathetic state where we are exporting our raw material on a massive scale and that deficiency cannot be replenished in the immediate future. Steps must be taken to have an organised plan of campaign for the future of agriculture. What we have seen is a completely disorganised plan of campaign. It is most disturbing to see vast numbers of our cattle herds being exported on the hoof.

I come from the constituency of Waterford, the main port for the export of live cattle. In recent months we have seen a most retrograde step, that is, massive numbers of cattle being exported. Last week something like 10,000 cattle left the port of Waterford. That is good for the port authorities because they get shipping fees, but that is an insignificant factor. The fact that we are losing as many as 10,000 cattle a week is something that should cause alarm in all sectors of the community, particularly in Government circles and in the Department of Agriculture.

Have we a plan? Are we destined to export this basic raw material? Are we destined to have tens of thousands of people unemployed because we are not able to harness our resources? The Minister made play of the fact that he was worried about the decrease in the herd numbers. We are all worried about this but unless something is done to stop this trend there will be a very bleak future for agriculture and for employment.

I understand estimates have been drawn up for 1981 and, as a result of the reduction in the herd numbers, there will be 150,000 fewer cattle slaughtered for processing here next year. I am told that 200 cattle slaughtered represent one job in the meat processing industry. When we do a simple calculation we see that that will result in a loss of 1,200 jobs in the meat processing trade in 1981 and if we take into account associated and ancillary industries, the job losses will be considerably greater.

This is an area where Fianna Fáil promised so much in their 1977 manifesto. They promised to provide many extra jobs in the food processing industry but we have seen the reverse. The figures I quoted must give cause for alarm not only in the farming community but in every sector of the community. In particular, this should alarm the Minister. I would like him to tell us what he intends doing to arrest this decline and to stop the collapse of the meat processing industry and the reduction of jobs. I do not know why we have to adopt such a short-sighted policy. The obvious answer is that we have not diverted enough resources within the agricultural industry to meet the existing demands for processing. We are willing to make the fast buck. We think that by exporting we will keep our heads above water, but we cannot do that forever.

I was informed that a subsidy is paid for the export of these cattle. I would like the Minister to tell us what this subsidy is and why it cannot be diverted to a more productive use, such as financing meat processing plants or grant-aiding farmers who are facing tremendous problems and can barely pay their way. I was told that a subsidy of £22 to £24 a head is being paid for each beast exported. In other words, this is an incentive to export cattle. If that is true, I can only say that that type of incentive borders on being criminal because cattle should be processed here and work provided in the State. I want the Minister to tell us if this is correct. I do not see how there could be any justification, either on moral grounds or for financial reasons, for such a practice at a time when we should be doing all in our power to keep these cattle at home.

If this foreign market had not been available in the last few years many farmers would be in worse financial difficulties than they are at present, but exporting cattle is not a solution to the problem. A solution should be found within the State. The cattle should be processed here and badly needed jobs provided. What did the Fianna Fáil Party mean in their 1977 election manifesto by saying they were going to increase the number of jobs in the meat processing and allied industries? All I have seen in that sector are closures and reductions in staff and I would like to see that trend reversed.

The Minister referred specifically to the drop in farmers' incomes. We all know that has taken place. That drop in real terms amounted to 50 per cent over the past two years while other sectors of the community have seen a real increase in their earnings. What will the Government do to rectify this position? Can we continue at this rate? I say we cannot. There is a need for a huge injection of cash. There must be a diversion of our financial resources. Agriculture is our prime industry but if it cannot survive in a proper and organised manner, every other section of the community will suffer. I am very concerned for those farmers who were advised to borrow large sums of money in recent years but who find now that they cannot meet their repayments. Consequently, some of them are forced to sell off their cattle. They would be selling beef cattle in any event but they are now having to sell off their cows in order to pay their debts and to care for their families. This situation is not good enough. Some means must be found of reducing the burden of repayments for those people who borrowed extensively on the advice of the banks and of other parties on the basis that the agricultural boom of the middle-seventies would continue through the eighties and beyond. The money which these people borrowed at between 9 and 10 per cent some five years ago is now costing up to 18 per cent in interest and has cost up to 21 per cent in recent times especially in respect of loans got from the ACC. Money that can be raised abroad at reduced interest rates, such as the £50 million that was announced recently to alleviate the farming crises, should be used for the purpose of a restructuring of those loans that were obtained during the past six or seven years rather than for the issuing of new loans.

I do not believe that there will be a sufficient number of farmers interested in taking up that £50 million. I say this on the basis of the lack of confidence that exists among the farming community. They are not prepared to invest. The same applies to business people. They have been caught in the past so far as interest rates were concerned and are bound to be very cautious about becoming involved in a similar situation again. Money that is being obtained at a rate of about 13½ per cent should be used to restructure the loans that are crippling progressive farmers. And one of the worst aspects of the present crisis is that many of the best and very young farmers are the ones who are suffering most as a result of these high interest rates. The situation is very bad for those people who bought land at about £3,000 per acre, for those who bought tractors and other equipment and for those who built extensive outhouses and beef fattening units. Something must be done to help them out. The measures that have been announced by the Government are insufficient to deal with the problem. As the people who marched in Kildare Street yesterday said, farmers expect the Minister to make a clear statement of intent on the Government's position in relation to the devaluation of the Green £. Such devaluation would be one of several possible solutions to the problem.

The Chair has allowed the Deputy a lot of latitude. At least half the matters he has raised are not relevant to the Supplementary Estimate. If the Chair were applying the rules of the House, the Deputy would not be allowed stray at all from the business before us.

I am asking the Minister to spell out in his reply the solutions the Government have for the problems of the farming community.

The Deputy should realise that the Minister, too, would be out of order in replying to matters that were not relevant in the first place.

The gist of my argument is that, as stated in the Minister's contribution, there is an alarming trend in respect of cattle numbers and that that trend is downwards. Unless the situation is rectified, the whole structure of agriculture is threatened.

The Minister referred to the question of milk production and to the fact that there is a capital injection of an extra £1,450,000 under the heading of subsidies for milk and dairy products. Surely something more than this amount is needed. There has been no increase for dairy farmers for the past two years so far as milk prices are concerned whereas there have been big increases in the cost of inputs. In some cases these increases were of the order of 100 per cent but I would suggest that the overall average figure was of the order of 40 per cent. Is there any explanation for the price of 54p per gallon being paid to farmers in respect of milk while in countries such as Belgium and Holland the corresponding price being paid is in excess of 70p per gallon? This represents a tremendous difference. In addition farmers in these other countries are entitled to avail of support schemes. For example, they may avail of loans at interest rates of between 5 and 6 per cent. Is there any reason for similar rates not applying here? How can our farmers be expected to compete with the farmers in Europe on such unequal terms. Surely we cannot expect to have the same standard of living or the same output when we are working on such unequal terms. There should be low interest charges for productive types of farming. This is the type of incentive that is needed but which is not being provided. Our farmers are having to repay money at twice the rate at which they borrowed it six or seven years ago. If we are to bring about the increase in milk production that is so necessary we must provide the incentives and these can be in a number of different ways. One is in the area of prices. I have illustrated the inequity in this regard so far as our competitors are concerned.

Debate adjourned.
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