Before I moved the Adjournment of this debate I was referring to the Estimate for Agriculture against the background of the situation in that industry. I pointed out that in real terms agricultural earnings at the end of last year were 90 per cent of what they were in 1969. Last year there was an increase of .02 per cent while earnings in the economy increased by 50 per cent in that period. What can we do through our budgetary procedures, or by other means, to improve the situation in agriculture? Last week I pointed out that we can negotiate to the best of our ability for every reasonable increase that can be obtained for agricultural produce through the European Economic Community. It is a popular stand to debate for the protection of the CAP and as high a price as possible for produce for our farmers but the fact remains that there is a definite limit to the price increases we are likely to get in the foreseeable future because most of the products we are likely to sell are in surplus in the Community. It is very costly to dispose of those products. We must be realistic and accept that while we must do our best there is a limit to what we can get, 6 or 7 per cent this year. Such an increase will not mean very much to the average farmer. If we succeeded in getting more than that the Irish farmer who could be described as a small producer would only get a fraction of the benefit which will go to our competitors in Holland and the UK. We must remember that the average Irish herd is 13 cows and the average UK herd is 40 cows. The truth is that if we succeed in taking more money from the European budget for agricultural produce farmers in other countries will get more than those involved in the industry here. The situation will not improve very much for our farmers but at the same time the problem of the European budget will be aggravated. That must be recognised.
We must ask ourselves if we have been pursuing a policy of bashing everybody who questions the wisdom of the CAP or the British for their opposition to it instead of planning a realistic approach to the development of our agricultural industry at home. That was not done and there was no effort in the budgetary procedures of the last three or four years to provide anything for the improvement of that industry. It has been pointed out that the Estimate for agriculture amounts to £256 million and I believe that less than 30 per cent of that figure finds its way beyond the farm gate into the pockets of farmers for the development of agriculture or the improvement of farm incomes. Under the estimate £44 million is provided for salaries and £57 million for food subsidies. I am surprised that the House in passing the Agriculture Estimate annually has accepted as valid the insertion into that Estimate of the social cost of subsidising food. It does not have anything to do with agriculture and, in the interests of truth and justice to the agricultural community, that figure should be listed under a different heading. It is ridiculous to include it in that Estimate and try to pretend to farmers and other sectors that it is being spent on agriculture.
The Estimate also includes £1 million for international co-operation, payment to the world food programme, a comparatively small amount but it is not part of the Agriculture Estimate. It does not have anything to do with the development of that industry and does not give direct benefit to farmers. We would have a more honest presentation if such matters were not included in the Agriculture Estimate. The bulk of that money does not have anything to do with the agricultutral industry and is not being spent for the benefit of farmers. I do not like making an attack on the public sector because over the years I have seen the cream of the labour market being recruited into that service but it is questionable whether the fine people on the administrative staff of the Department of Agriculture are being properly utilised to the benefit of the agricultural industry. In my view their talents are not being utilised. If we arrived at a situation where we did not have that area of the Department, would the House in considering the development of the industry put that type of structure back? I do not believe the House would. The truth is that there is sufficient money in the Estimate to give to every full-time farmer a pension or income supplement in the region of £40 per week. If one takes out of that the 50,000 or 60,000 farmers who are viable and earning an acceptable income one would see that the remainder would be more than well catered for under the Estimate. The truth is that farmers are getting very little.
I acknowledge that the Government had not many options open to them, they had no way to turn. However, grants for farm development have been eliminated and the western drainage scheme is slowing down. Therefore, we must ask ourselves what the administrative officers who were involved in that work will be doing in the coming year. I recognise that the scaling down of the grants is a temporary measure but before that decision was taken certain sectors of the staff in the Department were an embarrassment to each other as they drove around the country or walked around offices with no apparent job to do. That is rarely said openly but it is the truth of the situation. If at any stage we find it necessary to reduce grants or withdraw schemes we should immediately make some revision either for useful occupation of the people involved or the removal of them, their cost and expenses from the Department.
In recent years in response to political pressure by groups there has been a building up of scheme after scheme in the Department of Agriculture. I can recall when the Estimate for that Department was a higher proportion of GDP, four times higher, than it is today. At that time any person familiar with the agricultural scene could list the number of schemes in operation for the benefit of farmers but there are so many schemes today that one would need a computer to keep track of them, the regulations involved and the administrative costs involved in the handing out of a few paltry pounds that is not doing much good for the agricultural industry. It should be remembered that two other Departments are linked to the Department of Agriculture. The Department of Lands costs £16 million annually — almost half of that figure goes for wages and expenses — and the Forestry Division costs £43 million annually. The three Departments have the same aim, the development of our agricultural resources to give a better standing of living to everybody, especially those working on the land. We could easily eliminate the administrative structure of the Department of Agriculture and have enough money left in the £59 million for Lands and Forestry to provide the educational services that are needed.
It is remarkable that the first cut introduced — it was carried out before the Coalition took office — was in educational facilities. There was a reduction in the amount of grants to AnCO and the number of advisory officers was reduced. That is the last place we should consider reducing spending because it is one area that needs development and further investment. If we eliminated the entire spending of the Department of Agriculture there would be sufficient money left in Lands and Forestry to pay all the administrative and educational expenses needed in agriculture. The £256 million provided in the budget could go directly into the agricultural industry by way of reorganised schemes or a better plan to assist farmers improve their income and develop their lands. This would, as has often been pointed out, create further wealth in food processing and all the upstream and downstream activities that this would generate.
What can we do in the short term for the agricultural industry? The Government have a very difficult situation facing them. It is very hard for the Government to easily recognise what they can do. There is something which I believe could possibly improve the situation which has not been very popular. I know there are very few politicians who would recommend it. I believe we have reached the stage when we must seriously consider, not only for the sake of agriculture but for other reasons, whether our currency is over valued. It has been pointed out by the social economic council, the IFA and many eminent economists, that it is possible, if our currency was devalued, this might improve the situation in our economy but, in particular, the agricultural industry. If the value of our currency means anything how can we have a situation where our inflation rate is an average of 8 per cent or 9 per cent higher than our European partners and at the same time our currency can maintain its value against theirs.
I did not believe it was a foolish thing to join the European monetary system but I expected that any Irish Government who had control of our economy would realise it was important for them to exercise economic discipline and to pursue the economic policies of our partners within that system if we were to maintain the value of our currency in relation to that of our competitors. People said that we already had a devaluation because of what happened the British pound. They have said that for two or three years but they cannot say it anymore. I do not accept that is a valid argument because it was solely the British currency which was revaluing. While the British might have found it more difficult to sell into our market and while we should have found it easier to sell into theirs, the truth is that every other country in the world had the same advantage that we had and they had the same advantage competing with us on the British market. The argument put forward that we have had an effective devaluation is not a valid one.
What is the situation at the present time? Not only is the British inflation rate so much below ours but the British pound is devaluing at the same time. If those people were correct about what they said in the past, surely there is every argument in favour of an immediate devaluation now or we cannot survive? We would be absolutely swamped by British competition if that argument was correct. There are other arguments in favour of devaluation. They say we must freeze wages and salaries and we must exercise severe disciplines. We must do these things even if we devalue. It is not true to say that if we devalue our currency we must immediately have a wage freeze. We should say that if we devalue our currency we should not seek to make good the loss through some sectors by, at the same time, demanding wage increases. If we do that we will undo the advantage of devaluation.
Another argument that has been put forward is how can we pay our national debt, how will we buy our oil? I do not accept those arguments. I wonder why so many eminent politicians accept those arguments. The truth is that we will buy our oil and pay our national debt with goods and services sold abroad competitively at world prices. That is how we will meet our foreign commitments. I do not believe it is true to say that if we devalue our currency it makes it that much more difficult. We can also say that if we devalue our currency a reduced amount of national borrowing will accommodate our needs. I believe that the people who lead the argument against devaluation are the sector who have nothing to lose, the people who have money, banks, insurance companies, and all those people who will naturally lose by a devaluation of our currency.
We are listening too much to those people. They have had a good innings. Power has been slipping in our economy from the people who are doing things, taking risks, producing wealth to the people who had ready cash in their hands. Those people have bled the productive sector over the last few years. They have bled the agricultural industry with exorbitant interest rates that could not be paid. They have bled the exporters, the people who are producing and creating employment, with interest rates that could not be paid. I do not accept that was necessary. Why should we have had those interest rates if we were not devaluing our currency?
Let us take a German who had one million Deutschmarks to lend five years ago. If that man loaned that money in Germany at the going rate of interest, which was 6 per cent, 7 per cent or sometimes 10 per cent or 15 per cent lower than our interest rates, he would have got over the last four years 30 per cent less than if he converted it into Irish pounds, gave it to Irish farmers and industrialists and returned it to Germany. The productive sector of our economy has been bled by the people who demanded exorbitant rates of interest. I believe one of the ways we can put that right at the moment is by a devaluation of our currency.
We also heard the argument that if we devalued how would farmers pay the money they had borrowed from abroad? They said the Government would be forced to subsidise the interest on their loans to make good the deficiency which would arise. I do not accept that argument either. If the Government had facilitated the agricultural industry to borrow in Deutschmarks four or five years ago and the Government were saying all the time they would not devalue, surely we had to take the risk that the Deutschmark would devalue a little bit? The gap between interest rates was so wide that that was no risk at all. The price of agricultural produce would rise directly as a result of any devaluation that might occur. This would have enabled our agriculture to pay the difference that would arise as a result of our devaluation. I believe it is time we took not least of all because of the trend in our balance of payments deficit, which is obvious in the last month, a look at this situation. We must look at some possibility of giving agriculture and industry an opportunity. I admit there will be sectors within our economy who will say they are entitled straight away to have the losses made good to them. If we adopt that approach and if we have a Government who are soft enough to preside over such people robbing back the benefits we can get for our competitiveness the effort will have been wasted. I believe now is the time to try because there are very few options open to us.
I would like to refer to the question of the Department of Lands. It is four years since a former Minister for Agriculture, Mr. Gibbons, told the Land Commission not to buy any more land and to distribute the land they had. Since that successive Ministers who have taken office have not changed that nor am I aware of the Land Commission being in the market for land over that period. Surely at this stage the Land Commission could have got rid of all the land they had at that time? I am sure if that Department were seriously seeking to divest themselves of the land they hold — there are farmers in every area waiting for it — that land would be distributed by now. All the employees and the departmental officers in the Land Commission would be sitting at their desks asking the Minister what he wanted them to do now or should they just go home. The truth is they have been spinning it out, hoping the Minister will change his mind, perhaps under political pressure some new land policy will emerge. Whatever it may be, it is time we had a rethink on this whole subject. I am confident that the Government who are only settling themselves in office will bring forward a solution so that we will not have to come here next year to vote an Estimate for a Department that has been redundant for the past four years. In my county 50 per cent of the land is in the hands of people who are over 50 and unmarried while there are other people who would very much like to acquire more land but who cannot do so because of the high interest rates. Even if they were in a position to buy additional land they would not be able to stock it because of the cost of borrowing, and we all know that small farmers do not have money in the bank. There is no plan by which the Government can transfer land to people who can make good use of it. I am looking forward to this new Government applying themselves to the task of settling the question of the role the Land Commission are supposed to play.
The whole area of education has been given much attention in recent days. The cost of school transport must concern every Deputy. As I have said in recent days, we could put to better use the £30 million involved. We all respect the officials and workers of an organisation such as CIE. We are concerned about their jobs but we cannot keep them in jobs merely to have them working. If they are not doing a job that is productive and useful, we must reconsider their position. A scheme whereby direct grants would be given to parents, teachers and school managers could be organised in such a way as to eliminate the whole administrative cost of school transport. People must realise that the evergrowing demand for money for school transport cannot continue to be met by the Government. In the interest of the children and of making economies, I am confident that all those concerned at local level would be prepared to take on the very light burden of administering the school transport service.
The Department of Social Welfare is another area in which administrative costs could be cut drastically. This Department, like the Department of Agriculture, operate so many different schemes that one would need a computer to keep track of them all. There is no need for 25 per cent of the schemes in existence. Surely the purpose of a social welfare system is not, as appears to be the case now, the creation of a floor below which any citizen must not be expected to live or to labour. We should be able to operate our social welfare services at only a fraction of the current administrative cost. When I entered politics about 15 years ago it was easy to answer inquiries as to what schemes were available, but that is no longer the case because of the many schemes and variations of schemes available through either the Department of Agriculture or the Department of Social Welfare. Surely unemployment assistance, unemployment benefit, disablement benefit and the many other social welfare schemes could be condensed into one workable and useful system that would achieve the very same purpose. Despite a situation in which we have civil servants computing pay-related benefit, it is found necessary now to bring in others to calculate the tax.
In the old days when we operated the system of home assistance officers there was no opportunity for the abuses of the system that are prevalent now. Each home assistance officer knew exactly who was working and who was unemployed in his area. There would not have been any chance of half a dozen people on the same stretch of road drawing unemployment benefit and working at the same time. The Department do not seem to know what is going on. They are so bogged down in paper work that they are not able to police the dozens of schemes for which they are responsible. We must simplify and decentralise the whole social welfare system in the interest not only of effecting economies but of providing a better service for the people concerned.
Without wishing to be too pessimistic, it seems that we are only beginning to feel the pinch. We are only beginning to suffer for our sins of extravagance of recent years. Last year we were able to give a 25 per cent increase to social welfare recipients. At least that compensated the poor and the weak for cost-of-living increases, but we are not able to give that level of increase this year. Unemployment is increasing. One must have every sympathy with the Government in the task facing them; but at the same time I am confident that, having faced the task and having put the public finances in some sort of order this year, they will proceed to develop real policies that will put matters right. The Government must not be influenced by public servants, by specialists or by bankers in their efforts to come to grips with the situation. From their own experience and knowledge they must apply themselves to the work that must be done if we are to preserve our democratic system.