(Limerick West): Their policies are negative. Looking at the amendment which they have put down to our motion, one questions which section of the Government is bringing in these measures. When one considers the policy of the previous Government and our approach to the development of agriculture the contrast is obvious. The budget introduced by the Minister for Finance has destroyed any prospect of recovery in the agricultural sector. That Minister was previously Minister for Agriculture in the National Coalition and he was at one time economic adviser to the IFA. The budget has cost Irish farmers in the region of £146 million but the Government have given out only £16 million. There is no doubt that the Minister for Finance has turned his back on Irish farmers and the Minister for Agriculture has not defended them. The budget has sounded the death knell for Irish agriculture.
In 1982 farmers had a good year and the slide in their incomes was halted with a modest increase in real terms. This was due to the excellent price negotiated in Brussels by the then Minister for Agriculture, Deputy Lenihan, and the favourable economic conditions created by the Fianna Fáil Government. Inflation dropped from 23 per cent to 12 per cent, thereby reducing farming costs by £150 million in a full year. There was a drop of 4¼ per cent in interest rates and this reduced cost to farmers by an amount of £60 million in a full year. At the time of the general election there were definite signs that the recession in agriculture was on the way out and the prospects for farmers in 1983 were good.
Disaster struck with the coming to office of the National Coalition. They have shown a complete lack of interest in farming and this was clearly demonstrated by the omission of the Minister for Agriculture in the economic task force. What has happened since the beginning of this year has been a recipe for economic disaster for agriculture. Inflation has risen by 4 per cent because of the provisions in the budget and farming costs have risen by £60 million. Interest rates have increased by 2½ per cent, thereby increasing farming costs by another £35 million. The 1983 budget has cost Irish farmers a very considerable amount.
In addition to this there have been the disastrous EEC price proposals and the long delay in implementing this year's price package without a word of protest from our Minister for Agriculture. The Government have withdrawn their objection to the fact that there are 90,000 tonnes of New Zealand butter in the declining UK market. No protest was made by our Minister for Agriculture in the EEC negotiations. The dairy market has been left in a very unsatisfactory situation and Bord Bainne have dropped the price of milk by 1p per gallon to the Irish farmer. The New Zealand deal with the UK is costing the EEC £80 million per year. It is destroying our dairy exports. Meat factories are closing at a rapid rate because of the failure of the Government to deal with the UK variable premium.
The suspension of the farm modernisation scheme has ended development work on Irish farms. What the Government have done is contrary to the Treaty of Rome. By their actions the Government have undermined the confidence of farmers in the future of the industry and this will delay national economic recovery. Under Directive 159 the suspension of the farm modernisation scheme is contrary to the terms of the Treaty of Rome and I understand the Commission have written to the Government asking for reasons why the scheme was suspended. I hope that the scheme will be restored as soon as possible and I should like the Minister to clarify the position when he is replying. The action of the Minister for Finance in suspending the farm modernisation scheme will put the Minister for Agriculture at a disadvantage when he is negotiating prices, when it will be seen that our Government have not the political will to provide the necessary capital to invest in agriculture. Because of the action of the Government, the Minister for Agriculture will be at a complete disadvantage when negotiations take place on the price review.
The Minister has adopted a very lukewarm approach to agriculture and has shown a complete lack of understanding for the farming community. No budget in the past 20 years devoted so little attention to agriculture which is our primary productive industry with low import requirements and a high export content. We all appreciate the unique and important role of agriculture in our economy. That has been stated over and over again. It needs to be emphasised now because there is so little incentive by the Minister or the Government to improve farming conditions.
Agriculture affects everyone not only those living on the land. When it is on an upward trend so is the whole economy. Approximately 40 per cent of the total labour force are employed in agriculture, directly or indirectly. This sector accounted for 14 per cent of gross national output in 1982. The figure for Great Britain was 2 per cent and for the EEC as a whole the average was 2 per cent. Agricultural based products represented one-third of all our exports last year. Farm exports are four times as beneficial to the economy as industrial exports in terms of the balance of payments.
This industry, which is the very bed rock of the economy, was safely nursed through the appalling world recession of 1979 and 1980 by a caring Fianna Fáil Minister for Agriculture and Government. Our concern and attention at that time, coupled with the well known resilience of the farming community, ensured that no permanent damage was done by the adverse provisions that prevailed. At the end of 1982 there were definite signs that farming was emerging from the depths of the recession which had plagued it during the previous three years. For the first time since 1975 there was a real increase in farming. The Brussels price settlement won by the Minister for Agriculture in 1982, Deputy Lenihan, contributed materially to that improvement. That price package was the single largest increase we achieved since we joined the EEC in 1973.
The growth of agriculture is vitally important to the growth of the economy as a whole. There must be a continuous policy of achieving the highest possible contribution from agriculture to economic growth. A number of schemes have operated to help farm development and improve efficiency. We had the land drainage scheme, farm buildings under the farm organisation scheme, the western drainage scheme, the group fodder scheme and the scheme for machinery purchased in the west. Many of these have now been suspended by the Government. Why are this uncaring Government belittling agriculture? Why are they prepared to see agriculture reeling back from the stage of development it had reached over the past 20 years?
Through the years the State accepted the need for investment in the promotion of better farming and the adoption of better farm practices. Every effort was made to bring home to farmers and farm organisations the need for education, training and participation in advisory work and the need to adopt good farming practices and techniques which have been proved by research.
Contrast that with what is happening now. Contributions to agriculture have been decreased, grant aid to farmers has been reduced and there are reductions in the State grant to ACOT. They were directed to phase out the service provided in relation to poultry keeping, farm home management and the horticultural advisory service. Expenditure on these services was very small. They were necessary services particularly for small farmers in isolated areas. Fine Gael during the last election campaign gave a commitment that these services would be fully restored. The Fine Gael document and their plan for agriculture makes sorry reading now when one contrasts their proposals for the development of agriculture with the budget which belittles the contributions farmers could make to the development of the economy.
The agricultural advisory services operated by ACOT, and heretofore operated by the county committees of agriculture, were badly needed for the development of agriculture. They helped to develop agriculture and encouraged self-reliance among the people of rural Ireland. After the setback in farming since 1979, the stimulation of self-reliance was never more important than it is today. The services of the advisory section of ACOT have seen great changes. In the early days, personnel were thin on the ground but they expanded during the fifties and sixties. During that period, farmers moved from a subsistence level to a more business-like approach. Many rural organisations were formed and there was great demand for various services, such as classes and farm visits. They were readily given at all hours of the day and, often, late at night.
It is important to note how the development of these services has benefited agriculture and farmers down through the years. During the seventies, the advisory service operated the EEC schemes such as the farm modernisation scheme and the scheme of vocational training in the 100-hour courses. Unfortunately, in recent years, there has been a tendency to belittle agriculture and, since 1979, agricultural income has not kept pace with inflation or the cost of living. This has been due to reasons outside farmers' control. In 1982 farm income per labour unit on full-time farms was only 50 per cent of the wage of the average industrial worker. There is a great need for farmers' incomes to be readjusted. To do this the advisory services, as operated under ACOT, have an important role to play. In the present economic climate, the farmer must be convinced that he will benefit if he succeeds in increasing productivity and improving the quality of his output. For that reason, the agricultural advisory service is not merely concerned with a technical problem but also with economic and social aspects as well as farm economics for individual farmers.
Experience has shown, over the past 40 or 50 years, that advisory and agricultural work go hand in hand. Advisory work must rest on a proper foundation to ensure that farmers understand technical and economic advice given to them, hence the need for class work and the various courses operated throughout the country. Advisory work has a close link with research. The relationship between advisers and the Agricultural Institute has always been good and any new information is brought quickly to the farmer. I emphasise that this advisory service must have the confidence of farmers. This can be brought about by giving the aids and supporting the service which is so necessary in the present economic climate. Confidence can only be instilled by improving the service of the advisory section of ACOT. They have a very important role to play in the developing of agriculture, and, ultimately, in improving the economic services. These services proved their worth in meeting the various challenges which arose over the past few decades. In the present economic climate it is even more important that these services ensure that agriculture moves again. When agriculture develops, the whole economy develops. Therefore, it is regrettable that the grant to ACOT should be cut at a time when advisory services were never needed more, especially since it was emphasised by Fine Gael prior to the election that they would restore the services and would actually increase them. I leave it to the farmers to judge for themselves the contribution by the Government to the development of agriculture.
The potential for a significant and sustained increase in agricultural output, exports and incomes, is very real and agricultural development is the basis for that. The support of Fianna Fáil for this industry over the years had created that important potential. Those policies provided the investment needed to build up the infrastructure of agriculture to a level where its full potential could be realised. Fianna Fáil Governments, over the years, gave hope to the people on the land and especially to those employed in our food processing industries and many of the farm input industries, which are now closing down daily. My colleagues, Deputy Byrne and Deputy Kitt, will emphasise how we have implemented our policies to support and substantiate the food processing and farm input industries.
The policy of this Government and their attitude to agriculture stand out in striking contrast to our approach to the development of agriculture. There is widespread depression among farmers today because the withdrawing of the farm modernisation scheme has put a halt to the development of the greatest single productive source of the nation. In this denial not only to the farmers but to the national coffers of the funds that flow from the EEC under this scheme the approach of the Government is unforgiveable, particularly at this time. The farmers are outraged at this approach. I appeal that the Minister for Agriculture, if he has the interests of the farming community and of agriculture at heart, will restore immediately the farm modernisation scheme not alone for its benefit to agriculture but more particularly for its benefit to the country as a whole because of the funds that will flow to the Exchequer from EEC resources.