Deputy Michael J. Noonan (Limerick West) has been given permision to raise on the Adjournment the question of the farmers' aid scheme to be included in the-farm improvements scheme to be introduced shortly. The Deputy has 20 minutes.
Private Members' Business. - Adjournment Debate Farmers' Aid Scheme.
(Limerick West): I am glad to have the opportunity of raising on the Adjournment the question of the implementation of the EC young farmer establishment aid scheme and, hopefully, having it included in the farm improvement scheme which we hope will be announced very shortly. There seems to be a certain amount of public concern among the farming community — indeed, I might say anger and dismay — at recent reports that the Department of Finance are refusing to include provisions for young farmers' establishment aid under the new scheme to replace the farm modernisation scheme.
It is seldom I have an opportunity of giving the Minister for Agriculture a pat on the back. On this occasion I should like to commend him for the excellent response he obtained from the Council of Ministers and the European Commission, including that at the recent structures discussion which took place some months ago in Brussels. Under Article 7 of the European Council Regulations, No. 797/85 of 12 March 1985 — that is EC support for installation aid in the form of a flat rate premium and an interest rate subsidy the Minister obtained this aid. I hope that the Minister of State, Deputy Hegarty, will allay my fears and will come out and say constructively that this aid will be included in the package to be announced shortly. But there are worrying reports that the Department of Finance are opposed to the implementation of Article 7 which would give our young farmers at least some of the financial help their EC counterparts have received. I should say also that the EC will contribute 50 per cent of the cost so that the Exchequer element would be small, approximately half a million pounds in one year. I will give shortly a comparison of the costs of training in agriculture as against those in industrial employment.
This is a vital measure for young farmers attempting to get established in farming in a very difficult economic environment. The small amount of public expenditure involved will be recouped many times to the country by those same farmers. The policy of this Government, as outlined in their document published about 12 months ago, Building on Reality, was that this establishment aid would accelerate the process of early inheritance and the transfer of land to young, trained farmers, thus helping to achieve a central objective of agricultural policy. In my opinion it will constitute a vote of confidence in young farmers at a time when their options in different farming enterprises are very restricted. The Minister has a golden opportunity, as have the Government, to demonstrate their faith in our young farmers, those who will be the leaders of that industry in the future.
Fianna Fáil are totally committed to this scheme. I might reiterate what our leader, Deputy Haughey, had to say at the recent young farmers' conference in Cork. He gave a commitment that in the event of this Government failing to implement the scheme, or to deliver on their commitment as outlined in the document Building on Reality, this party on returning to Government would introduce this scheme and that, in the event of its being introduced by this Government, that we would ensure its continuance.
As was outlined in the Government's document Building on Reality this country and the development of agriculture are in the hands of well trained young farmers. For the benefit of the house I should state specifically what exactly is young farmer establishment aid. It is a package of aids rendered possible by the latest EC regulation on agricultural structures, a package which will be 50 per cent supported by the EC. It involves a premium on first installation in the region of approximately £5,000 and would include also an interest subsidy on loans, again in the amount of approximately £5,000. Therefore, we are talking about very small amounts of money indeed. The regulation also provides for additional investment aid of up to 25 per cent for young farmers submitting a first farm improvement plan over what would be obtained by other farmers. This additional investment should not be seen as a replacement of establishment aid.
One might pose the question: why do we need this young farmer establishment aid? It is for the benefit of young farmers, under 35 years of age, representing less than 10 per cent of our total farmers. This is very low compared to other countries who have much more generous aid for young farmers. In this country approximately 2,000 young people enter farming each year and economic conditions in all farm enterprises make it difficult to get established in farming. This is why we need the establishment aid which will help to realise a central agricultural objective, the transfer of farms to young trained farmers.
This aid is a test of the Government's commitment to a youthful land policy. It would cost very little and would create jobs on the land and extra output for the agricultural industry. It would cost something in the region of £1 million in 1986, half of which would be recouped from EC sources. We have the option of implementing this aid and we would look ridiculous if we did not implement it having fought to have it included in the structured aid. If we do not implement it we would also lose the 50 per cent contribution from the EC.
It costs much less to establish a person in agriculture than in an industrial job which can cost in excess of £15,000. The cost of State aid to a university graduate is between £9,000 and £12,000 whereas the cost of training a young farmer to participate in our basic industry would cost about £1,000. I hope the House understands my argument in requesting the Government and the Minister to implement this scheme. If the commitment to young farmer aid is now reneged on it will be a serious blow to the confidence of young farmers, who will feel betrayed by the Government. Can we afford to strike at the future of agriculture in this way? It is vital to implement this scheme for the reasons I outlined. It is time that the Minister for Agriculture and his Department asserted themselves and ran the Department independently of the Department of Finance.
I support the very forceful and effective case made by Deputy Michael Noonan for aid for young farmers. It is almost a cliche in farming circles that the one thing which has retarded the development of agriculture has been lack of education in young farmers. Steps have been taken recently to improve that situation and it has been a tradition among agricultural graduates to develop a sense of mission in this regard. Macra na Feirme have done a great deal to provide informal education and inspiration for young farmers. Our spokesman was president and pressure is coming from the people in that organisation for this young farmer installation subsidy.
As well as the informal education provided through attendance at agricultural courses by Macra na Feirme, ACOT have also developed a number of courses either of the continuation variety or courses taken in 100 hour packages. This has stimulated the interest of young people in starting agricultural ventures and this scheme is ideally and admirably suited for that purpose. As Deputy Noonan said, 50 per cent of the cost would be provided by the EC. This is an added incentive and I am sure the Minister of State and the Minister will have added muscle in extracting the necessary funds from the Minister and the Department of Finance.
Young people who have contacted me about this scheme are serious minded and well equipped to take advantage of the installation money if it is made available to them. The last person who asked me about this scheme said that he did not care what Government introduced it and that he did not want me to promise for political purposes that Fianna Fáil would bring the scheme into effect if elected to Government. He wanted Fianna Fáil to introduce it because it is a worthwhile scheme which would benefit young farmers. I wrote to Deputy Noonan, our spokesman on agriculture, and asked him if he was incorporating it in his agricultural policy for Fianna Fáil in Government. His reply, which I sent to the young man who had approached me, was that Fianna Fáil would implement the scheme when in Government. I appeal to the Minister of State and through him to the Minister for Agriculture and to the Minister for Finance, with whom the buck stops, to make this money available.
Fianna Fáil have always sustained the young people in Macra na Feirme. They have given them financial aid to develop the various educational ventures on which they have embarked since they were founded in Mooncoin in County Kilkenny many years ago. I wish to add my few words to those of our spokesman urging the Government to introduce a scheme and to see to it that it is done at once so that money will not be lost from the European fund.
I should like to thank both Deputies for their contributions. The new Community structural aid policy is contained in Regulation (EEC) No. 797/85 of 12 March 1985 which was adopted by the Council of Agricultual Ministers earlier this year. The main thrust of the new policy which replaces Directive 72/159 — implemented here through the farm modernisation scheme — is to make Community aid for on-farm investment available to a wider band of farmers than was possible under the rather restrictive terms for development farmers under the directive. The terms of the scheme to be implemented here are at present being finalised and I expect to be in a position to make an announcement on it shortly.
Apart from the measure on farm investment aid which I have referred to and which is mandatory, the new Community policy also includes a number of optional provisions which it is open to member states to implement or not. Including among these are the special aids for young farmers. These aids can be made available to farmers under 40 years of age who meet certain occupational training criteria and who are installed on a farm for the first time.
The young farmer aids consist of two elements. First, there is a provision to allow member states to increase by 25 per cent the normal rates of capital grant for young farmers who undertake to follow a farm improvement plan within five years of first installation on the farm. The second element is an installation premium payable to a young farmer whose holding has a minimum work requirement of one man work unit. This requirement of one full labour unit in order to qualify for the installation premium is quite restrictive but it was insisted upon by other member states.
There are two parts to the premium, a cash grant of up to 7,500 ECU equivalent to about £5,600, and an interest rate subsidy of an equivalent amount payable on loans taken out to meet the costs of installation. The interest subsidy may be converted into a capital amount at the option of the member state. Fifty per cent of expenditure on the extra investment aid for young farmers and on the installation premium is eligible for FEOGA reimbursement.
As I have already pointed out, it is open to each member state to implement these young farmer aids or not to implement them as they choose. In fact, I understand that only one or two countries so far have indicated that they are operating the installation premium.
As I have said, the complete package of measures to give effect to the new Regulation 797 is now in the final stages of preparation. It will be a good package and of greater benefit to farmers than the farm modernisation scheme. The question of including young farmer aids in the new scheme is obviously also under consideration by the Government. A decision on that and on the whole package of measures will be taken very soon. The various representations that have been made about young farmer aids — and particularly the installation premium — and the consideration advanced during this debate will be taken into account in reaching that decision. That is all I can say at this stage. The Government will give the matter their most careful consideration and I expect that details of the entire package can be announced in a matter of weeks.
The Dáil Adjourned at 10.15 p.m. until 10.30 a.m. on Wednesday, 13 November 1985.