Agricultural Credit Bill, 1960 —Second Stage.

Question proposed: "That the Bill be now read a Second Time."

This Bill is designed to ensure that the development of agriculture will not be hampered by lack of reasonable credit facilities. Similar action has already been taken as regards credit for industrial development. The subject of credit for agriculture has been under study for some time past. The survey of agricultural credit in Ireland made by Mr. F.W. Gilmore, Deputy Governor of the U.S.A. Farm Credit Administration, which has been presented to the Seanad, has greatly facilitated this study and the Government's thanks are due to Mr. Gilmore for his valuable report. The changes in the law which the Government considered desirable following the study made are contained in the Bill now before you.

The Government's aim is to enable the Agricultural Credit Corporation fully to perform its functions of extending the prudent use of credit for agricultural purposes and financing the general modernisation of our agriculture and the other capital outlays necessary for the improvement of the productivity of our farms. The Corporation must have sufficient resources to be able to lend money for all agricultural purposes at reasonable rates of interest, and any obstacles to judicious borrowing by farmers from the Corporation must be removed. It is also proposed to create conditions in which arrangements can be worked out for participation by farmers in the membership of the Corporation.

The present authorised capital of the Agricultural Credit Corporation is £300,000. All of this has been issued and it is held by the Minister for Finance except for a few shares held by his nominees. The Government envisage a greatly increased future scale of activity for the Corporation and, accordingly, the Bill provides for the increase of the authorised capital to a maximum of £2 million. The availability of substantial funds in the form of share capital will provide greater flexibility for the Corporation in dealing with the demands on it for credit and the Government hope that these demands will be on a growing scale. While it is expected that a major part of the demands will come from the individual enterprising farmers who are the backbone of the agricultural industry, there will also be an increasing demand by co-operative and corporate enterprises undertaking investments in specialised forms of agricultural production and processing. Enterprises of this kind will not be operating against the individual farmer but can be used constructively to strengthen his position in production and marketing.

The pattern of agricultural production and distribution is undergoing profound changes in countries with advanced economies. The changes involve new techniques and processes and integrated forms of development requiring the investment of large sums designed to give vast increases in production and productivity. These are developments that we must face in export markets and it is the Government's intention that we will not fail to do so through lack of reasonable credit facilities for farming or for ancillary agricultural enterprises.

Some agricultural co-operative societies are already engaged in, or are proposing to engage in, specialised or integrated forms of agricultural production involving close co-operation with local farmers. These societies are setting a headline for sister societies throughout the country and I earnestly hope that many other co-operatives will follow the example in ways best suited to farming needs and prospects in their areas. The need for a widespread and energetic development of the co-operative movement in this way was never greater, particularly in the interests of smaller farmers who, in a rapidly changing agricultural world, are likely to find it very difficult, if not altogether impossible, to prosper without the help and guidance of the co-operatives. Credit must, of course, be used wisely if it is to be profitable.

The Government are now taking steps to ensure that the Agricultural Credit Corporation will have adequate funds to enable it to consider applications from co-operative societies for credit for all soundly based projects which cannot be financed from other sources. The Corporation will not be expected to pay a greater dividend on share capital provided from the Exchequer than it is in a position to pay when it has met its various obligations, including provision for reserves and for the remuneration of any special credit officers who may be appointed to the staff. This will meet the recommendation made by Mr. Gilmore that the Corporation should be enabled to employ credit officers so as to improve its services to farmers. The extra resources being provided should enable the Corporation to invest in, or lend to agricultural enterprises which, while profit earning eventually, may not prove remunerative for some time. The Corporation is already considering what special scheme or schemes it can introduce to encourage development by co-operative societies in the desired direction.

As the law stands, shares of the Corporation may be held by the Minister for Finance only, except that the directors may hold qualification shares and other nominees of the Minister may hold one share each for the purpose of complying with the requirements of the Companies Acts. The Bill empowers the Corporation to issue shares or stock to persons other than the Minister for Finance but the Minister's consent is necessary so long as he holds not less than half of the issued capital. The Minister is also being given a general power to purchase and sell the Corporation's shares. These powers in addition to the increase in the authorised capital which is being provided for will enable arrangements to be made for the purchase of shares by farmers as soon as this becomes opportune.

However, as is proper for an institution which is primarily of a banking nature, most of the Corporation's capital will continue to be raised by borrowing. The existing borrowing powers are unduly restricted. It is proposed, therefore, to confer power to borrow money in any way the Board thinks fit and to raise the effective borrowing limit of £8.3 million to £10 million. Provision is being made to widen the power of the Minister for Finance to guarantee borrowing by the Corporation and a new power is being provided to enable the Minister to make direct advances from the Central Fund to the Corporation. The total of guarantees, advances and any other borrowings must not exceed the limit of £10 million already mentioned. Provision is also being made for the guarantee of the Corporation in approved cases against losses on agricultural credit schemes subject to a maximum of £5 million at any one time. The additional powers should facilitate greatly the financing and operation of the Corporation.

The principal objects and powers of the Corporation are being re-enacted in more general form and are being widened in certain respects. Under the powers as proposed, the Corporation will be able to lend or advance money or to guarantee credit for any purpose which the Board consider likely to increase the productivity of or be otherwise of benefit to agriculture. The definition of the expression agriculture is being widened to cover such activities as tree-planting and fish-farming as well as all the usual farm operations and the marketing, processing or completion for sale of any farm produce.

The existing limit of £10,000 on loans other than to co-operative societies is being abolished and the Corporation is being explicitly empowered to issue and accept bills of exchange and to engage in hire-purchase arrangements. It will also be able to take up shares and, if necessary, to sponsor special projects and companies for the benefit of agriculture. It is hoped that such activities and the further development of co-operatives will be of particular assistance and benefit to farmers in meeting the challenge of modern conditions in agricultural production and marketing and will result in increased exports of agricultural produce. The Corporation will be able to draw on the specialised knowledge and experience of the Department of Agriculture and of the Irish Agricultural Organisation Society in the development of production, processing and marketing enterprises, thus ensuring that these projects will benefit the individual farmer.

To simplify loan procedure the Corporation is being given power to make orders charging loans on land, subject to the consent of the owner, or of the occupier, if the loan is for work of permanent improvement. Charging orders made by the Corporation may be varied with the consent of the owner or occupier. The Corporation will make no charge for its services in ordinary cases and neither stamp duty nor Land Registry fees will be payable. This arrangement should be of great assistance to farmers in borrowing from the Corporation. It is similar to the systems used in the administration of Gaeltacht housing loans and of the fertiliser scheme operated as part of the Land Project under which charging orders are made by the Office of Public Works and the Land Commission, respectively. These systems have proved very satisfactory in practice.

As a further measure to assist in the provision of credit for farmers the system of chattel mortgages, that is, mortgages on livestock, crops and agricultural equipment, is being extended to cover contractual liabilities generally. Under the existing legislation a chattel mortgage can be used to secure a direct loan only; under the new provisions it will be possible to use it, for example, to secure a guarantee given by or to the Corporation to cover the supply of agricultural requisites to a farmer on credit.

In the present legislation loans charged in favour of the Corporation on registered land the title to which is marked "subject to equities" are given priority over the "equities" up to a limit of £400. The position is similar in the case of the corresponding burdens on unregistered land. The limit of £400 was fixed as far back as 1928 and the Gilmore Survey recommended that it be increased to £800. In view, however, of the decline in the value of money since 1928 an increase to £1,000 is justified. The change will simplify procedure for many loan applications.

Provision is being made to raise the maximum number of directors of the Corporation from five to seven to enable the Board to be strengthened as desirable to cope with the increase in its activities. It will be possible to avail of this provision to give greater representation to farming interests according as may be justified by investment by farmers in the Corporation. At present there are no effective arrangements in operation by which farmers or other members of the public can invest in the Corporation. With its new powers the Corporation intends to launch a scheme of investment designed to appeal to farmers. I hope this scheme will meet with an enthusiastic response.

As regards the scale on which the Corporation has been operating, I may mention that the aggregate of loans issued since it commenced business in 1928 up to 1960 was £9.4 million, an average of £300,000 a year. The present level of lending is of the order of £800,000 a year which approaches three times the average. This is still far from being adequate and it is the Government's hope that, following the enactment of the Bill, the Corporation will operate on a growing scale, performing fully its part in the provision of credit for agricultural development.

Before I close, I should like to refer to the commercial banks who in recent years have introduced various special farm credit schemes and are improving their relations and contacts with farmers. These progressive policies are very welcome. The banks with their country-wide machinery have, and will continue to have, a most important rôle to play in making investment in farming possible and fruitful.

Increasing attention is now being paid by the agricultural advisory services to farm management problems, including the use of credit. Educational work in this sphere is also being undertaken through the agricultural classes organised by the county committees of agriculture and the winter farm schools organised jointly by these committees and the vocational education committees. Farmers are approaching the agricultural advisers in greater numbers for advice on farm management problems and are being helped to place their programmes on a sound financial basis. The farmers' organisations have also been doing good work in educating farmers in the use of credit. As I said earlier, credit must be used wisely if it is to be profitable. The educational and advisory services point the way and there will be general agreement on the desirability of farmers availing of these services to the full. On this will depend largely the success of the improved credit arrangements now being made.

I am confident that Senators will be sympathetic to the objects and intentions of the Bill. I have sketched its main provisions and I now commend it to the House.

The Minister would not consider reducing the rate of interest to three per cent.? That would be a great deal more effective than all the hotch-potch the Minister read out. Nobody can say that I have not got a very profound sympathy with the problem of agricultural credit. The organisation to which the Minister referred was established in the year 1927 by the late Patrick Hogan. At that time, the share capital was £500,000. The borrowing powers of the Corporation were £7,500,000. In effect, the Corporation had a capital of £8,000,000 to lend. Much water has flown under the bridge since then, but at that time the rate of interest on loans was six per cent.

I was a young student of economics and I can remember considerable discussion on that rate and the general condemnation of it. It was regarded as being too high. On the whole, the Corporation did fairly good work until the world depression in agriculture hit this country in 1931, to be followed by the Economic War which hit the country from 1932 to 1936, when the Agricultural Credit Corporation almost went out of business. Not alone that, but the people administering it ran into such desperately stormy weather they have never recovered their nerve, except in one particular respect which I shall mention later on and which does credit to the Minister.

This appearance of an enormous increase in resources is merely an apparent increase. At the moment, the total amount of mortgage stock outstanding is £2,500,000. That has been adequate. At 30th April, 1960, there was still £300,000 left, which was quite adequate for their demands to date. The financial position of the Corporation in a few years' time will not, of course, be anything like as good as it has been in the past, because the £1,000,000 three per cent. guaranteed mortgage stock will cease in 1967 and, if it has to be replaced by moneys of some other kind, it may cost the Corporation quite a bit.

The Minister did not detail in his brief various extremely important questions in relation to this matter. One entire part of the 1947 Act related to chattel mortgages. One would have thought that, with the number of tractors increasing from 5,000 to their present figure of 45,000 hire purchase credit would have been the easiest to operate. The Minister gave us a figure of £9,500,000 advanced by the Corporation in the past 35 years but he did not tell us that the total of loans issued on the sole security of chattel mortgages up to 30th April, 1961, was £15,365. I do not know who the lucky men were who got this £15,365 on chattel mortgages. I do not know whether they got it on cattle or tractors or anything else. Certainly the amount involved would not set the threshing machines humming or the tractors going.

The reason I deal so trenchantly with this aspect is that I know the farmers went out and borrowed money, until the banks became interested a few years ago, from various hire purchase corporations and they paid anything from 12 to 15 or 16 per cent. on the moneys they borrowed. They did not borrow £15,365 from these hire purchase corporations. They borrowed millions and they paid 12 to 15 per cent. interest. Recently, the rate has increased to 16 per cent.

The truth is that the people running the organisation had lost their nerve completely, despite the excellent provisions in the Agricultural Credit Act, 1947, an Act which is still extant but which the organisation never implemented. The Minister referred to that in passing. It is suggested that they will operate the provisions of the Act on a widespread scale from now on. Beyond question, that would be the most significant action this Corporation could take.

I have cavilled—I think, rightly so —at the rate of interest charged by the Corporation. Six per cent. is too high for permanent loans for agriculture, the kind of loan one makes on land mortgage and the only kind of loan the Corporation has made to any extent at all. The rate in America, as I was informed by some Americans some years ago, is three per cent. I cannot understand why we cannot make money available at the same rate.

The Minister had various suggestions to make. He used some nice phrases, for example, "a reasonable rate of interest". The Minister may have thought I was trying to be smart in my opening query. Look at the front page of the last report: the rate of interest for new loans was increased from 5¾ per cent. to 6¼ per cent. per annum as from 8th March, 1960. That does not suggest to me any trend towards a reasonable rate of interest. In fact, it rather suggests a Tory financial policy and putting a veneer on the policy will not change its character.

At one period, an effort was made to get the rate of interest reduced. I think the Minister was concerned in that effort, but the person who was really responsible for its origin was the late Senator Counihan about 1942. The rate of interest at the time was 6 per cent. and as a result of prolonged discussions and a tremendous volume of evidence before one of these very useful ad hoc committees, the rate was reduced to 4½ per cent. If the Minister had come in here this evening and said that the Agricultural Credit Corporation would make money available for long-term loans at 4½ per cent., I would have welcomed him and I would have said he was doing something worth while.

I do not exaggerate. I have some knowledge of this subject. There was a most extraordinary atmosphere of unreality about the Minister's brief. It was a kind of hotch-potch, stuff put together by people away from the problem and who had never really got to grips with it.

The Minister did say to me last year —indeed, he could make quite a good point of it—that the banks had done this job in a big way in the past few years. It would be quite unfair of me not to admit that that is so. I worked out the figures as to what the increase in lending was in 1959-60 compared with 1958-59 and, right enough, the net increase in lending by the Corporation was about £300,000 in that year, that is to say, they lent what they had lent the previous year, plus another £300,000. I would not sneer at that at all. I think they have done better this year. I would not have any criticism of the way the Corporation has been going on on the general front in the past few years—none at all. I think it has been doing well on the whole. But, of course, these questions of no advance by way of chattel mortgage and the high rate of interest are both, in my opinion, extremely objectionable.

Let me put the problem as I see it. I do not understand why the Minister comes into this House with quite a flourish of trumpets about this Bill when, in fact, he did say last year, quite truthfully, that there had been a great change in the attitude of the commercial banks. I think the influence of one particular chairman of one of the banks had something to say to that. At least, I will say this for them on this occasion, that the commercial banks, having made a lot of advances in the year 1958 when cattle were sky high in price, for once, did not pull out last year and throw their hats at it; they kept at it, which is a change for the better on the part of the commercial banks.

This organisation has had a number of wonderful opportunities in this country. No State organisation ever had better. It has foozled the catch every time up to the present. Let me give one example. The then Minister for Finance would have given them any quantity of money they wanted out of the Marshall Aid money— literally millions—and, in fact, when Deputy MacEntee, as Minister for Finance, was throwing the Marshall Aid moneys overboard, the last £100,000 was siphoned over to the Agricultural Credit Corporation but Deputy McGilligan when Minister for Finance would have given these people millions. It is not as if the opportunity was not there.

The Act was passed in 1947, when cattle prices were very low, when agriculture was at a low ebb here. I do not intend to go back and make a political point about that. It was a fact. It was an ideal moment for starting. As I say, there was their sad experience in the '30's when the same people were in charge. Nobody would complain that the chairman at the time was not a gentlemanly man. Indeed, he was. Nobody would complain that the officials were not upright and honourable people. Indeed, they were, and are. But, certainly, the people in control of the organisation—I mean the chairman and the managing director —really did not behave towards agricultural credit the way I understand the subject. That is all I will say about it. They did not. "You will get the farmers into debt" or "You will have the farmers buying tractors and how could a small farmer use a tractor." Those comments which I can only think of in retrospect as smart aleck remarks, were all used in connection with this subject.

This Bill has certain good things in it. I suppose one of the most significant is the obliteration of the limit of £10,000 as the maximum loan the Corporation can make. Where did that £10,000 limit come from? We all know where it came from. It came from the commercial banks. They were the people who put this limit of £10,000 on the Corporation's lending. I should like to hear from the Minister whether he is going to complete this operation and get rid of the commercial banking director off the board of directors of the Agricultural Credit Corporation. If he would be so good as to mention that subject, I should be grateful.

I do not see why the commercial banks should be able to nominate a director on this board, as they have been doing. They did originally nominate about half the board, when they subscribed half the capital, but they were paid off in 1947 and they struck a good bargain. When they subscribed half the capital originally, they got rid of an equivalent chunk of frozen loans to the Corporation, which was not a bad bargain from their point of view. I can understand why they should have had, as they had, about half the board of directors at that time; they had subscribed half the capital. Then the board of directors were reduced to three at one time, one of whom was a director of a commercial bank. I cannot understand why the Government of this country should be so fond of the commercial banking system that they would not appoint people to this board who are quite independent. One could say without stretching one's imagination that that director is there, in fact, as a spy for the commercial banking system. Now that the Minister wants to extend the number of directors to seven, I hope they will all be as good as the present chairman; that other equally good men will be appointed. I should be glad if the Minister would also tell me that he is getting rid of the commercial banker off the board.

The Minister did not deal at all with a most important point. It is known, and in replies to Parliamentary Questions it has been established time and time again, that 40 per cent. of the applications for loans to the Agricultural Credit Corporation cannot, under their system, be entertained because the man in occupation of the land is not the registered owner. What is the Minister going to do about that? That is to say, of all the applications they receive they have to knock off 40 per cent. I did not hear a word about that from the Minister. The father or the grandfather of the man in occupation of the land became the registered owner of the land in the Land Registry and registered title to it under the 1891 Registration of Title Act following the purchase of the land from the original landlord, but, of course, wills sometimes are not made in rural Ireland or are lost, or there is a brother in the Antipodes who cannot be located or will not reply to letters. Accordingly the man concerned cannot give a charge on land.

The House has heard of the sum out on loan on 30th April, 1960. Loans guaranteed by the Minister for Agriculture amounted to about half a million pounds. They are for haysheds and that kind of thing taken over from the Board of Works. There was a system operated by the Board of Works which, very properly, was transferred some years ago by the Department of Finance to the Agriculster gave us. These other loans, amounted to £2½ million. This is at 30th April last year. I suppose that would probably now be about £3 million, in view of the figure the Minister gave us. These other loans. amounting to £3 million, are all secured by what are called loan mortgages—not all of them, but 99 and odd per cent.

The Minister has explained it to a small extent. He says that Section 9 empowers the Corporation to make orders charging loans on land subject to the consent of the owner, or of the occupier, if the loan is for work of permanent improvement. I have already pointed out that a six per cent. rate is not a suitable rate for a loan for permanent improvement. The owner legally is not the owner unless he has this indefeasible Parliamentary title in the Land Registry. The occupier, of course, was brought in, very skilfully indeed by Deputy Dillon in the Land Act of 1949, so that the occupier can charge the land.

The trouble here is the work of permanent improvement. That does not include seeds or manures, the purchase of cattle or the buying of tractors. Loans charged will also put a personal liability on the owner-occupier and the charging orders for these can be varied. That is all right, but the snag is that this is for work of permanent improvement, which, I might point out, has not been badly taken care of over the past nine or ten years. A great deal of it has been done under the Land Project. I should like the Minister to answer these questions.

The Minister made large scale references to the co-operatives. That was all very nice historically. One would be surprised at the extent to which agricultural co-operation was referred to in 1927. We went right through the entire system from the various committees of inquiry set up by the British Government. A great deal of the legislation, the first Agricultural Credit Act of 1927, related to tying in the co-operative societies with this work and extending the co-operative credit system.

One must be honest, however. It is a complete loss. There is a considerable advantage, on the other hand, in this obliteration of the limit of £10,000. Take the example of the Killeshandra Co-operative Dairy Society and others who can now borrow anything up to £100,000. Indeed, there were such arrangements made already for some of them, like the Irish Agricultural Wholesale Society, but again, of course, the Corporation did not have too much courage in that connection, either. The fact is that the nerves of the people connected with it were shattered in the 1930s. The coincidence of a world depression in agriculture and the economic dispute with Britain was really too much for the organisation and they never recovered.

The Minister ended his statement by a suggestion about the increase in capital and he said he expected an enthusiastic response from farmers. That kind of phraseology is, quite frankly, no use at all. If the Minister had brought in a measure only authorising the Corporation to lend people more than £10,000, I would say the Bill would be of some use and he could scrap the rest of it. The financial end is not necessary at all because if the Corporation has power at the moment to get £7,500,000 and has only lent £2,500,000, and consequently has had only to get £2,500,000 in the 40 years of its existence, there is no point in suggesting that the £7,500,000 should be increased to £9.8 million. It may look well on paper or as a preparation for a general election but of what practical use is it?

My criticism really comes under three main heads. From this criticism, it is not to be taken that I do not appreciate the Minister has done something. I am not saying he has not. The most significant thing he has done is to give the Corporation power to lend more money and there is some little improvement in the system under which the occupier would charge moneys on the holding. However, I would much prefer it had the Minister come in and told us this Corporation is going out to do big business by way of chattel mortgage. I would have welcomed it had he said the Corporation was going into the hire purchase business in a big way. Then I could say that the organisation was doing something good because their rate of six per cent. could be compared with the 12 per cent. to 16 per cent. rates the hire purchase companies are charging.

But, frankly, a six per cent. rate when the occupier, as distinct from the owner, can charge the holding only for work of permanent improvement is nothing at all. Think of the problem from an economic point of view and imagine that the period of inflation was over. In such a background, I would reckon that two per cent. would be the proper economic rate.

Where would one get the money?

I suppose the Senator thinks money is only something he can rattle in his pocket.

I know the value of money as well as does the Senator.

It is not something to rattle in one's pocket.

Answer the question.

Where does one get the money?

It is simple.

For simple-minded people.

It is all baloney. Would the Senator answer the question?

It has been answered. This is the usual dirty trick—saying it was not answered. I have answered it. They think money is something to rattle in your pocket. Think about it again. The Minister has not shown such a bad effort at creating money. I spoke on the Central Fund Bill this year and pointed out that there was increased credit from the commercial banks of about £30 millions and that hire purchase was up, from £11 millions in 1956, when everybody was squawking about it, to £25 million. Of course, the particular document that produces the figures— the Quarterly Bulletin of the Central Bank—did not give them to us again. I would give one warning, particularly to Senator Lenihan and his five million halfpennies. He would be surprised at how quickly the commercial banks would bale out—and I want to stress that I do not mean this in any personal way—once they decided that they had lent enough.

Let us get back to the Bill.

All this has some relevance to the problem. I take it that after that little lesson in finance, the Senators and the Minister will subside. Having answered that question, I shall finish my speech.

Is it in order for members on the opposite side of the House and not in order for members on this side of the House to interrupt?

We are only asking sensible questions.

The two fashionable things which occupied the attention of Fianna Fáil at the last election were agricultural marketing and agricultural credit. We have waited since for the birth of the children conceived at that time. The first child was stillborn but the second child, whilst an improvement on the first, is not good enough.

In a general way, it is necessary to examine the situation in regard to agricultural credit in this country. It is also-necessary to find out what our necessities are, so far as agricultural credit is concerned. There is not the slightest doubt that our agriculture is undeveloped. All one has to do is to go to Scotland and see how much money is invested in the farms. In Scotland, only a small percentage of the farms are owned. When a farm is being leased, the questions asked are: "How much money has the person got to invest? How much money has he for machinery? How many cattle has he got?" In other words, can the person run the farm economically getting for himself a reasonable profit and at the same time pay his rent? In this country, we are very far from that stage.

There are vast areas in this country in which there is only subsistence farming. The major problem is not the problem of money. The major problem, of course, is how to inject the money. I could give two examples of what I have in mind. I know two politicians in this House who are businessmen as well. Both of them show a reasonable profit on their farms. They both admit that, no matter how tough the times were, they could always finance the farms because their businesses were bigger than their farms. They could show a reasonable profit. I can quote the case of a farmer not far from the town of Drogheda who was also a businessman. He invested £40,000 in the modernisation of his farm and in the provision of stock and equipment. His profit last year on an investment of £40,000 was £60, excluding pigs, on which he lost about £2,000. Nevertheless, he took only £60 profit on an investment of £40,000. Wrong investment in agriculture is the thing that can damn a farmer—investment without any specialist attention as to how it is put in.

The first problem, more important than the problem of money, is the problem of an organisation to invest the money in the right way with the certainty of a profit. There are two ways to achieve that—the knowledge of the farmers and the knowledge of the institution which loans them the money.

The second example was the heifer loans. Deputy Sweetman referred to that in the Dáil on this Bill. I refer to it now. All Senators have read the agricultural statistics and know that the number of in-calf heifers in this country are down by 11.9 per cent. since the time the N.F.A. heifer-loan scheme was first established. Things in agriculture become fashionable. They are like ladies' hats. When runners, single suckled calves or multiple suckled calves, were fashionable and they were paying, the farmers got loans. The trouble is that the trend of prices went against that situation. Now the farmers have disposed of their heifers, paid back the loans or have not yet paid them back and heifers are down in numbers by 11.9 per cent.

Here we have the case where money was channelled in pretty generously with no results—in fact with opposite results. What are the ways in which we can increase agricultural credit with the certainty of building upon a solid foundation? How can this Bill do the job? The Bill extends the scope of the Agricultural Credit Corporation. They can now loan more easily to co-operative societies and organisations for specific purposes. It is wise, therefore, to discuss these ways of lending money. They were utilised, as far as agriculture was concerned, by the commercial banks and the Agricultural Credit Corporation. In the early days co-operative societies, as Senator O'Donovan mentioned, were the things which were to solve all our problems.

Co-operation has done a lot but it is right to say that, if the Agricultural Credit Corporation utilised its new powers to go further into co-operation by lending to co-operative societies, it might not be the best way. A co-operative society might start out to produce milk and you would have a vast area in the country producing milk but it is a question whether we should be more diversified, whether in fact that society in setting out to do a thing became so over-zealous and enthusiastic that it did not bother about the other opportunities which the members had on their own farms. It may have been a mistake to lend to businesses which deal with farms. In the main, businessmen could not exert in competition the same degree of regimentation on their customers that a co-operative society could exert on its members. That could be criticised from two points of view. If it is going to be an all-out effort, is it the right thing to have co-operative societies increasing attention to one particular product or is it the right thing to have business increasing in general?

I feel that there is an argument against over-regimentation, against the loan for specific purposes, against the doctrinaire going out into an area and saying: "We will lend you money for a specific thing." The Agricultural Credit Corporation was better as a normal banking concern, giving individual loans to individual people, based on their belief in the ability of those people to make repayments and carry out the purposes of the loans.

The N.F.A. produced a booklet on agricultural credit, and on page four, there were answers to the question: "Should the agricultural instructors' help and advice be a basic condition to the giving of a loan?" Thirty-nine branches considered that it should be but 65 considered that it should not be. In other words, we have the decided opinion now from a section of over 100 branches of the N.F.A. that ultimate regimentation would be a bad thing.

I hark back to the main trouble, that is, the organisation that can do this job. Any of us who are politicians have cause to go to the Agricultural Credit Corporation and discuss perhaps our neighbour's business. The neighbours know that we are going to Dublin and that we know the offices of the Agricultural Credit Corporation, and they ask us to discuss with them whether or not they should have a loan extension, or a loan, or any other such business. When we go there, we see the officers are all doing their job as best they can, but if the Minister were to try, as many of us hoped he would have tried, to extend the scope, the volume of business of the Agricultural Credit Corporation, with one stroke of the pen, would go up two or three times. The first problem would not be how they would get the money but how they would do the business.

It goes right back to the question of why it is that a bank manager in a country town prefers to give to a merchant down the street or anyone in contact with a farm, on the basis of a balance sheet, a large loan rather than a series of small loans to farmers who could then deal with him for cash. Why does he prefer to deal with one man to whom he will give long term credit rather than with a number of men who will deal in their purchases of goods for cash? It would be ideal to have 200 or 300 small men all dealing in cash because they would be in a better position to bargain, but eventually the thing comes to the physical fact that he would not be capable of knowing all about these loans that he was giving. The man down the street has travellers on the road and has contacts, and as a result, he knows whether he can give this credit, and it is over such a broad spectrum that if two per cent. go down, he has the other 98 to pay for it and he has lost profit and not principal.

I therefore say that this Bill is a small change. For the moment, it is like Brian O'Lynn's mare. It will do. But if I thought it were a step towards much bigger and better things and that the people in the Agricultural Credit Corporation would be told: "You have by promotion and by recruiting and by every other way possible, perhaps by taking in efficiency experts, to examine what avenues of expansion are available" I would be satisfied, but the limitations of the Bill are such that I am not satisfied, even though I welcome it as a small step forward.

The authorised capital is increased to £2 million and the permissive investment by the Minister is up to £5 million. It is not a fair comparison, I admit before I say it, but just to get a broad comparison of figures of what people do and what we are up against in our export trade, Denmark, as quoted in this evening's papers, has increased its supports to agriculture this year from £16 million to £24 million. This is in fact direct subsidy, while we are talking in terms of investment in an absolutely undercapitalised country as far as agriculture is concerned, in relation to a permissive increase of investment by the Minister of up to £5 million.

This is just one indication given when I picked up the evening paper tonight of where we stand in relation to competition with our neighbours in Europe. We have to do far better. The whole legislation is permissive and there is no statement by the Minister, tonight, nor was there any in the Dáil, that £1 will be forthcoming, so that the whole thing hinges entirely on what the position may be in the years to come and how the Agricultural Credit Corporation will do its job.

The borrowing limit is up from £8.3 millions to £10 millions. It is not a big amount. The leader of our Party quotes a figure which I think is pretty factual of £1,000,000,000 tied up in agriculture, and the Government agency that is supposed to give the lead, that was started by Paddy Hogan to give loans to farmers, has its borrowing limit increased from £8.3 millions to £10 millions. Comparisons with what is being done for tourism and industry would not help at all, because these things have to be considered, and I will not make these comparisons.

I welcome the change in respect of bills of exchange. Bills of exchange and promissory notes are convenient methods of dealing. You might call them post-dated cheques. They are absolutely essential to business in large sums today. The bill of exchange dated back for six months whereby a man takes in a fair load of commodities, a large quantity of fertiliser or of expensive agricultural requisites, is an established way of doing business, and it is only right that the Agricultural Credit Corporation, just like the banks, should accept them. They are accepted freely when signed by both buyer and seller and dated six months back through practically all the banks in the world, and with the constant drop in the value of money and the rise in the cost of goods, that is absolutely essential.

I welcome the fact that hire purchase has come in under this Bill. I hope that the borrowing figure will be extremely realistic; in other words, that six per cent. or something of that order will prevail, because it will have two effects: one, it will make money available under hire purchase facilities for necessary farm implements at six per cent.; and, secondly, it will kill the hold of the other hire purchase companies who have been overcharging in this field.

At this stage, I should mention another mistake made in agricultural credit which is well accepted and known to all agriculturists in this country, that is, the fact that the small farmer has spent in the past ten years in relation to his capital far too much money on machinery, which has resulted in many cases in the depletion of his stock. I can imagine the young lad growing up on the farm, his father being there. He wants to have a tractor, or a combine harvester or various articles of machinery to take away the drudgery and give him a certain status in the parish. He tells his girl friend on Sunday night about the new combine harvester instead of telling her things about herself as he should do.

Unfortunately, that has been the pattern. The trouble is that such a man says: "I have ten acres of corn of my own and 30 rented, and that is 40 acres. I have to pay £5 an acre to have it harvested and that is £200. I will get this `yoke' for £250 and in two or three years, I will have the thing paid off and it will have cost me, with the repayments, only £300."

That is not so because the trouble is that probably his total capital is about the cost of the combine harvester in the first instance, and he has not taken depreciation into account, nor has he taken wear and tear into account. The result is that when his second year or his third year half-yearly instalment falls due, in shame, he has to sell a cow the wrong day of the year, or in shame, has to sell two or three bullocks for half nothing. That trend is also one that will have to be watched to a fantastic extent.

Continental countries such as Denmark and Sweden have arranged preferential rates of interest in respect of agriculture. The question was asked: "Where would we get the money?" If we used cold hard economics, we might be better off if we subsidised the rate of interest for agriculture rather than subsidise the purchase of jet aircraft. I am not making a political point of this, and I do not want to offend the people opposite, but they can take it any way they like.

I cannot resist the temptation—and I am sure the Minister and Senator Lenihan will forgive me—to have a little political cut. I should like to quote from a document which is, of course, the clippings of the Irish Press. The address is 13 Upper Mount Street and the date is a little hazy.

I suppose the Senator cannot read Irish.

The heading is: "Cutting down on Credit." The document reads:

The Minister for Agriculture——

—then Deputy Dillon—

——has now transferred his responsibility for the issuing of loans for machinery, fertilisers and the replacement of stock to the Agricultural Credit Corporation. Mr. Dillon knows very well that this transfer of the responsibility for the making of loans is tantamount to saying to the farmers of the country: "You are not going to get any money." Everyone knows how difficult it is to get money from the Agricultural Credit Corporation. A farmer who once got through the Corporation could get all the money he needed in any bank in the country. No explanation whatever has been offered by Mr. Dillon for the extraordinary step he has now taken in handing over this part of his function into the dead hand of the Agricultural Credit Corporation.

That is why we brought in the Bill.

The quotation continues:

Could it be that this is another Coalition "economy" designed to reduce the amount of money to be made available?

See how many of them are blushing.

The situation is that when we play it, it is a drum with a hole, and when they play it, it is a beautiful Strad. violin.

We brought in the Bill.

After four years.

As Senator L'Estrange has said, after four years. That was an effort to get votes at the last general election. This is a political assembly and let us not be ashamed of that.

That is the last straw.

As we approach the dread hour for some, not for us, of another general election, we have got this Bill. Is this Bill a step forward, or is it one of the Fianna Fáil advances that are always round the corner? We will not know until after the next general election when Fianna Fáil may not have an opportunity of implementing the legislation now before us.

I do not intend to pursue Senator O'Donovan down the highways and the byways he travelled to-night, nor do I intend to follow on the lines taken by Senator Donegan because this Bill is a very practical measure. It is primarily a machinery measure which gives power to the Agricultural Credit Corporation to increase its potential capital from £800,000 to £2,000,000 and to increase its borrowing powers to £10,000,000.

In addition, there are practical improvements in regard to the limit of £10,000 on loans, and a provision enabling the Corporation to get into the hire purchase business. I agree that is very important. For too long, the hire purchase companies have been engaging in very profitable business at the expense of the small farmers with regard to the sale of machinery. That is a very desirable improvement. It is now positively stated in legislative form that the Agricultural Credit Corporation can go into the hire purchase business. In addition, there are simplifications of the security procedure and direct power is given to the Corporation to engage in agricultural development schemes.

The Bill itself is really the framework within which the Corporation can engage in work to the greater benefit of the Irish farmer and I believe that the main improvement will be an administrative improvement. We now have in legislative form the increased borrowing powers, the increased capital, the abolition of restriction on security arrangements, and the challenge to the Corporation will be to work out progressive administration in regard to agricultural credit within that framework. In that direction, I feel that constructive suggestions might be made in this debate.

First of all, the major problem at the moment is the long term credit associated with farm planning in this country. There is no machinery at the moment for long term credit or for agricultural advisers to draw up a practical plan for five or ten years and to link up the credit schemes within that plan. That is referred to in the Gilmore Report in a very definite fashion. On page 8 of that report, Mr. Gilmore refers to the two causes which he says have curtailed the growth of the Agricultural Credit Corporation in large measure.

I should like to refer to one of these causes which has certainly militated against the Corporation taking the part it should take in the field of agricultural finance. In the middle of page 8 of the Report Mr. Gilmore says:

An organisation furnishing credit directly to farmers cannot operate effectively from one central point. This method of operation requires that it must deal with farmers on an impersonal basis and obtain information from police officers or others who, no matter how well intentioned, are not versed in agricultural credit needs, farm debt-paying ability, etc. Red tape and delays were mentioned repeatedly by farmers as reasons for not applying to the Corporation.

Mr. Gilmore mentioned that as the principal cause militating against the Agricultural Credit Corporation and I agree with him wholeheartedly. I feel that over the years the fact that the Agricultural Credit Corporation, admirable though its officers may have been and well staffed as it may have been, operated from Kildare Street dealing with applications from the western seaboard, the southern seaboard and the midlands in regard to individual farmers whose calibre they were not acquainted with was a major cause in preventing the better growth of the organisation. This is an administrative matter.

I feel that if within the framework of this Bill, the Corporation will have any significance in the future, it will have to decentralise its administration. I feel it is essential to have at least an office in every county where there will be an agricultural finance officer, an official of the Agricultural Credit Corporation, who will advise the farmer. Perhaps in association with the Land Project officials, agricultural advisers would advise a farmer who wants to draw up a long-term farming plan and make the necessary finance available to further that plan. That is essential.

In a way, you have the existing administration with which to link that up. At the moment, in every town in the country there is a Land Project office from which that scheme is administered. The officials operating in the office are men who are in touch with the farmers in the county. They know the worthwhile ones and the men not so worthwhile, and so on. An additional room for an agricultural finance officer might be provided in that office. It is essential that he should work in co-operation with the Land Project officials or the local agricultural adviser.

If the Agricultural Credit Corporation is to function as heretofore in its administration from Kildare Street and not have this decentralised administration, I do not think the situation will improve enormously, even though the measures we are debating tonight, notwithstanding the scope of the Corporation, would enable it to work its administration more efficiently. I feel that the principles in this Bill would be prejudiced if the administration is not effective in the way I suggest and in the way Mr. Gilmore referred to on page 8, namely, that this organisation cannot operate effectively working from one central point.

Because of the large numbers of farmers all over the country with different needs in different localities, with different types of farming and different types of credit needed, unless you have agricultural finance officers there on the spot to work with the existing agricultural advisory and development agencies, there will be no hope of success of the Corporation in the future. That suggestion is largely one of administration.

The Bill is welcome. Any attempts to throw cold water on it have been weak. It enlarges the scope of the Corporation. It provides the framework. My hope is that out of that framework so admirably provided in this Bill an efficient lending organisation will be built up in a decentralised way throughout the country.

Senator O'Donovan referred to chattel mortgages and to the-small amounts apparently that have gone into circulation since they were first introduced. In my opinion, the reason they have not become more popular is the fact that we have very few farmers who would know anything good, bad or indifferent, about chattel mortages. If they are to be extended some method will have to be found to explain the meaning of chattel mortgages to would-be borrowers. If that could be done, I believe there would be a good increase in the number of applications.

I should like to point out that it has been found, not merely here but throughout the world, that the farmers as a section of the community are credit-worthy. Business people have found that out. Hitherto farmers have mostly been financed from one part of the year to the other by the local shopkeepers. That may be an expensive way of financing them. Naturally, the shopkeeper who is advancing goods on credit—fertilisers, seeds, and so on— has to have an overdraft in the bank on which he is probably paying six per cent. As well as that, he has to cover himself against whatever small percentage of losses he may have to face. Nevertheless, I think the Agricultural Credit Corporation should take its courage in its hands and take the farmers into its confidence. It will find that at least 95 per cent. or perhaps 98 per cent. of the farmers would repay whatever they borrowed.

The question every time is largely the same as that which confronts a bank manager. If a bank manager is approached for a loan by anybody, whether he be a farmer or a business man, he will have to size up the applicant. These men are specially trained for that purpose, after long years of service before they reach the stage of bank manager. They are able, largely, to size up a man and to know whether or not he is credit-worthy. In my opinion it is the man rather than his means of living that should be the deciding factor in the mind of any person or Corporation lending money.

A man with very small capital and perhaps handicapped in many other ways will be able to make good, whereas another man with a large amount of capital may not. As pointed out by Senator Donegan, a man may invest £40,000 and find himself losing money at the end of the year. As against that, I could recite stories of several farmers whom I know who began not from scratch but from behind scratch and who succeeded through sheer industry. I know one man who a few years ago was working in County Dublin as an agricultural labourer. Through sheer industry, hard work and intelligent application of his knowledge, he managed to acquire a small holding. Later on, through his own industry, he was able to purchase a neighbouring farm at a cost of £3,000. That may sound a small amount to some people but to an agricultural labourer, it is a very fine advance. I believe that that man will make a living on the land, no matter what hardships may be involved.

It occurred to me while listening to the debate on the question of these loans and how they are to be made that the Minister is more than anxious to make this money available to help especially the small farmers. There is in most parts of the country at present a chain of creameries. I would suggest that they should be utilised. It should be possible to work out machinery whereby, through the creameries, the creamery manager and his staff would lend money, the money to be advanced, if necessary, by the Corporation. I know of one creamery manager who, some years ago, when the heifer loans were first introduced, advanced the price of a heifer, in some cases, the price of two heifers in other cases, and who had the collection of the money in his own hands. When the heifers came into milk, the farmer who borrowed sent the milk to the creamery and repaid so much per week to the creamery manager by having the amount deducted from his creamery cheque. That is one idea which I think is worthy of investigation.

I understood the Minister to say that credit officers would be appointed. That is very sensible. The central office here in Dublin cannot possibly know much about a farmer down the country. Unless some machinery is devised whereby the Agricultural Credit Corporation can be informed as to the credit-worthiness of would-be borrowers, it will be in an extraordinarily difficult position. If credit officers were appointed, they would be able, through their knowledge of the country, to advise the Corporation as to those who should be given money. As well as that, they would be able to advise the farmers how that money should be spent. I do not for a moment advocate that money should be doled out to everybody who would take it and spend it without having due regard to putting it to profitable use.

There is another obstacle in the way and one for which I cannot suggest a remedy that would be absolutely certain. I understand that, if you want to borrow money, you must get somebody to guarantee you with the Corporation just the same as you have to be guaranteed with the bank. Why not go the whole hog and cut out the guarantors? If that were done, there would be very little loss to the Corporation or the Minister and there would be a large increase in the number of applications for loans. Very few people like to ask a neighbour, a friend or even a relative to act as guarantor for a loan. I should not like to do it and I know many others who are deterred from approaching banks or credit corporations because of having to get somebody who will guarantee payment. The loans through the creamery in the case I have referred to—I do not want to mention names but if they are of advantage to anybody I can supply them in confidence to the Minister— have been repaid in full in the district I know well and it should be possible to improve on that by making loans more freely available, not merely in that particular area, but throughout the country.

In the south and west of Ireland, you have creameries established and these, with co-operative societies, should be able to reach the vast majority of the farmers. Here in Leinster, it might be different but they are nearer to the Corporation and it might be possible to deal with them by a different means. It is essential, of course, that wherever a man borrows money the lender should assure himself that that money is going to be put to good use and not wasted. It should be put to increasing agricultural production.

As I have referred to agricultural production I should say that it seems to me that there would be very little use in having increased agricultural production unless the markets can be made available for it. The unfortunate experience of the farming community is that whenever production increases in any particular line, it reaches a certain point and at that point the price drops. It is a sickening experience for farmers who have put in a year's work producing a crop, or animals, for sale to find that just when the commodity is saleable the price drops. It is noteworthy that for commodities where you have a guaranteed price, wheat or beet and so on, there is no difficulty about production. If anything can be done to stabilise the market there is no doubt that the farmers would provide the product. If they are given a reasonable chance of security and a reasonable hope of having a market for a commodity, whether it be beet, wheat or beef or whatever they can produce from the land, it would be forthcoming.

The Minister for Finance could do worse than listen to the very constructive and instructive speech which has just been made by Senator O'Grady. I think the Senator had something to do with Agricultural Bills in his time and he has gained a great deal of practical experience as a member of the community in the part of the country in which he lives. I entirely agree from my own experience of the agricultural community, that the vast majority of farmers are creditworthy, honourable and honest people who do not want to owe a penny to anybody and a very independent-minded class of people, such indeed that they do not want to be beholden to anybody. For that reason, I agree with Senator O'Grady that there are very few farmers who like to go to a neighbour or even to a relative to ask him to go guarantor for them in the bank or with any merchant. Whatever can be done to loosen up the requirements of the Agricultural Credit Corporation in finding guarantors for farmers should be done if it is intended that the farmers should benefit from legislation of this kind.

The Minister would also do very well to pay some attention to what has been said by Senator O'Donovan. It has been a constant source of imagined grievance by the Minister in debates here that he never hears anything constructive from the Opposition. There are none so deaf as those who will not hear. Many constructive suggestions have been made——

I must be deaf so.

I am afraid the Minister must. There have been many constructive suggestions from this side which even the Minister in better mood has admitted were constructive and good ideas if they could be implemented and the Minister is on record——

How could effect be given to them if they could not be implemented?

Of course effect could be given to them. At any rate, what I want to point out is that consructive suggestions have been made and the Minister would do well to read the speech made by Senator O'Donovan in a more leisurely atmosphere, away from this Chamber, and he might learn a great deal from it. I do not understand much about companies and this business of credit and consequently at this stage I do not propose to speak at great length about them. From what I know, and I may be wrong, it seems to me that the most which the Agricultural Credit Corporation can have put in credit at any time to the farmers is a sum of £10 million. That seems to be the extent of the amount of credit which the farmers can hope to obtain from the Agricultural Credit Corporation. If that is so, the advance from £8.3 million to £10 million cannot be said in any sense to be even a step in the right direction because it does not in any way match up to the requirements of the agricultural community at present. I understood Senator Brady to ask Senator O'Donovan how money could be provided as cheaply as two per cent. Senator O'Donovan was suggesting that money should be provided for agricultural credit——

I do not think it was exactly that. The Senator was suggesting two per cent. and Senator Brady wanted to know where would he get the money.

As the true recorder and chronicler of the affairs of this House, in the absence of the Official Report, I shall accept what Senator O'Reilly says entirely. I understood time and time again from Senator Lenihan, the Minister for Finance, Senator Ó Maoláin and other speakers from the Government side that there was no lack of money for worthwhile capital projects.

The banks have doubled their advances.

It has been stated, time and time again, by Senators on the opposite side that there was no lack of money for worthwhile capital projects and I want to ask Senator Brady is there a shortage of money? Is there a shortage of money when it comes to supplying capital for the agricultural industry?

Apparently there is because Senator Brady has attempted to intervene in the debate in a most disorderly fashion to ask where is the money to be found. I understand there is no shortage of money whatever. On the contrary, we have an economic investment unit or some such section recently established in the Department of Finance and the head of that section was at some function down in Greystones over the week-end, following the pattern of the Taoiseach's letter to the county councils and other institutions, and said that what there was a shortage of was not money but ideas.

Exactly.

There is no shortage of money at all.

Not money but ideas, and when it comes to the primary industry which supports the vast majority of our people, and from which people are emigrating every day, where each individual unit is being closed down and allowed to run fallow——

That is all right for Ballyhaunis fair.

We are talking of agriculture and it should be very relevant at Ballyhaunis fair. When it comes to agricultural credit, the State can provide an increase from £8.3 million to £10 million, an increase of £1.7 million. That is a fair indication of the interest this Government have in the agricultural industry.

It is to be noted that the Minister for Finance made a speech saying this Bill was on the lines of the Industrial Credit Bill. It shows precisely—and I wish the farmers would realise it—that as far as this Government are concerned, agriculture takes second place, even in the matter of credit. I want to ask the Minister for Finance what would be wrong with providing a subsidy of £50,000 per annum to the agricultural community for credit purposes? When I ask that, I have in mind that the Minister for Agriculture or the Minister for Finance ought to be in a position to raise £1,000,000 per annum and to lend it free of interest for credit purposes to the agricultural community.

A while ago it was two per cent.; now it is no per cent.

Let us hear the speech.

If Senator O'Quigley gets as much as he gives, Senator Hayes should not get excited.

I am not getting excited at all. I want to know whether people on the Opposition side will be allowed to make a speech without a barrage of ignorant and unmannerly interruptions.

Senator Hayes should control his unrighteous indignation because nobody believes it.

An Leas-Chathaoirleach

Order!

Would it be wrong or would it be outside the ingenuity of the Minister for Finance to provide a limited subsidy of £50,000 per annum to the agricultural community for all the purposes specified in Section 7 of this Bill? If the Minister for Finance brought in that kind of Bill, I would certainly use the hackneyed phrase of these benches, that it was a Bill to be welcomed.

I have done it but the Senator did not like to listen to that part of my speech.

I did not see it provided.

I will repeat it when I stand up again.

Very well.

So now let the Senator join in the praise.

I will be delighted to do so and I will do the other thing the Fianna Fáil people do, that is, to congratulate the Minister after welcoming the Bill. However, I do not think that provision has been made in this Bill.

I do not believe it is but we will see whether it is or not. The Minister for Finance may be able to read into this Bill things that ordinary mortals do not see in it. I want to come to a matter which was raised by Senator Lenihan. He extols this Bill because he sees in it provision being made for the extension of hire purchase facilities by the Agricultural Credit Corporation to the agricultural community. Unless my memory is greatly at fault, I think these facilities were provided in the 1947 Act but were not used. My memory is aided by the side-note on page 5 of the Bill "1947, No. 14." in relation to paragraph (v) which says: "engaging in the provision of hire-purchase facilities..." That suggests rather conclusively to me that these facilities were already available in the 1947 Act.

Not clearly.

It is easy to clear up that matter.

It has been cleared up in the Bill.

In regard to the increase in the borrowing powers of the Agricultural Credit Corporation from £8.3 million to £10 million, can the Minister give any indication as to how much of that will be laid out by the Agricultural Credit Corporation in taking over these companies and establishing these projects which they will be entitled to establish under Section 8 of the Bill, and how much of the £1.7 million will not be used in the sense in which agricultural credit has been used to date, but will be used in expanding hire purchase activities which Senator Lenihan and others apparently think will result from the loosening up of the powers the Agricultural Credit Corporation has had to date? If the major portion of the £1.7 million which the Agricultural Credit Corporation will have under this Bill is to be absorbed in the use of hire purchase facilities by the agricultural community, it may very well turn out, as Senator Donegan has suggested, that that very activity of the Corporation will not inure to the benefit of the agricultural community, but that the contrary will be the result.

I want to hark back to a small point which emphasises what has been said by an earlier speaker as to how the Fianna Fáil Government always progress in a backward direction. The 1927 Agricultural Credit Act, when setting out the powers of the Agricultural Credit Corporation, was limited to a matter of ten or twelve lines. In the 1947 Act, these powers occupied four pages. Now we find at last, as in other things, that this Government realise that it is very hard to improve upon the things done by Fine Gael or by the inter-Party governments.

It is quite obvious that this is one of the best Bills we have had before us for some time. The object is quite clear, to make it easier for the Agricultural Credit Corporation to lend and to make it easier for farmers to borrow. It will be judged in practice by its success in fulfilling this double objective. It is possible to have a good Bill and to have a credit corporation so cautions that it will not make it easier to lend and not make it easier to borrow. I believe the whole spirit of the debate and the spirit in which the Government introduced the Bill is to effect that double purpose.

I remember reading nearly 20 years ago a pamphlet published by the Statistical Society of Ireland written by Dr. Beddy, which made a statistical comparison of Denmark and Ireland. He divided it into two parts: first, the natural advantages of each country, and, second, the benefits accruing from what man had done with these natural advantages. In the first part, there was no question statistically but that Ireland had the advantage all the way—the natural advantages of wealth of soil, distribution of rainfall and so on. In the second part, what man had done with these advantages, Denmark had the advantage all the way—in production per farmer, production per agricultural labourer, the capital investment per farm, per acre and the amount of money—this is very close to what we are now considering—lent to farmers by the farmers' co-operative banks.

There are a number of reasons in the history of this country why we might seem to lag behind Denmark. I do not think we have to be ashamed of that, provided we are determined to try, so far as it lies within our power, to catch up. I think this measure attempts to do that in placing at the disposal of the farmer a little more of that vitally necessary capital which would be capable of transforming the whole aspect of Irish agriculture.

I agree with Senator O'Quigley, however, that this £10,000,000 is, quite clearly, not going to be enough. The N.F.A. issued most of us with a detailed document stating what they think of this Bill, which they welcome in general terms. Appended to it is a table of the advances made by the Agricultural Credit Corporation from 1928 to 1960. I do not propose to quote all the figures, but I propose to quote the figures from 1947 on. They are as follows: 1947, £406,000; 1948, £203,000; 1949, £185,000; 1950, £319,000; 1951, £380,000; 1952, £540,000; 1953, £552,000; 1954, £799,000; 1955, £614,000; 1956, £448,000; 1957, £349,000; 1958, £419,000; 1959, £702,000; 1960, £805,000.

I should like to make the point that the aggregate of loans issued by the Agricultural Credit Corporation since 1928 right down to 1960 was £9,442,696. It was, in fact, over the whole period, something like the £10,000,000 about which we are talking now. Never in any given year did it much exceed £800,000. I would consider, granted the very limited extent to which agriculture is capitalised in this country, that those sums are a miserable amount; they are far too few and represent an attitude of caution which is well nigh criminal in the circumstances of this country.

I should like to ask the Minister if it would be possible for him to give us the figures relating to the years from 1947 down, not just of the amounts granted, but, first, of the numbers of farmers who made applications and, second, of the amounts asked. I would be prepared to bet that the applications made and the amounts asked were very far in excess of the amounts granted. I would suggest that that excess represents the degree of caution of the Agricultural Credit Corporation, which was almost pathologically afraid to take any risk whatever in lending any money to farmers. It is a wellknown fact in this country that for a farmer to borrow money, he has to prove absolutely he does not require it. If there is any suggestion he needs the money, he does not get the loan.

The point is made in subsection (1) of Section 7, paragraph (b) that the Corporation shall be entitled to receive deposits of money from co-operative societies. I should like to see that extended so that the Agricultural Credit Corporation would be entitled to accept deposits of money direct from farmers. That would seem to be a logical step towards the system obtaining in Denmark, where a very large percentage of the capital investment in farming is provided by the farmers themselves. Is there any reason why the Corporation should not receive deposits from farmers and pay them a rate of interest in excess of the rate of interest they would get from the Post Office? Why should they not pay to farmers a rate of three-and-a-half per cent. on deposits made, in order to get from the farmers some of the money which would go to the financing of agriculture? I should feel inclined to put down an amendment to that effect.

I should like also to refer to the excellent section—perhaps the central section from the point of view of the future of the country—Section 8 of the Bill, in which the Corporation is entitled to participate in certain schemes and projects relating to agriculture. I do not want to dwell too long at this late hour on this point. It seems to me of absolutely capital importance that the Corporation should be allowed, as it is allowed under the terms of this section, to engage in schemes and projects, to encourage them, to finance them and to inquire into how they are going. That seems to me to be an indication that the Government intend the Corporation to take something more than a passive interest in agriculture, that they will be prepared to take an active interest in it which could lead to all kinds of developments by force of example and experiment.

Now I come to the question of the interest being charged to farmers. I believe the rate now being charged is six and a quarter per cent. Senator O'Quigley was laughed at when he suggested interest-free loans. Why should that appear so funny? Why should it appear funny that a Senator should get up and suggest interest-free loans should be made to those who are working in the front line of our major industry? Senator Lenihan interjected that that sort of stuff was all right for Ballyhaunis fair. I would be inclined to wager that the audience at Ballyhaunis fair would know a lot more about agriculture than the members of the Seanad. If it is all right for them, it probably is a very good idea for agriculture. I should like to hear some of the sneerers at this idea justifying their refusal even to contemplate seriously the suggestion that interest-free loans should be given to Irish farmers. They are given to Swiss farmers.

The Minister says it is in the Bill.

The Minister mentioned the fact that it is possible for the Government to underwrite certain things for the Corporation so that it could become possible. I should like to see the Bill treated in that spirit rather than the spirit of thinking it quite impossible to do what can be done in Switzerland. In New Zealand the farmers are charged at a rate of three per cent.; in France the rate is four per cent. for short-term loans; in Western Germany they are charged a rate of one per cent. per annum, and in Belgium three per cent. These facts are in the document of the N.F.A. supplied to us all. They indicate that it is possible to do better by the farmers than we are doing. I would urge very strongly upon the Minister the notion that the Agricultural Credit Corporation might well be helped with the powers in this Bill to reduce very. considerably the amount of interest charged to farmers.

There is a small point mentioned by the National Farmers Association but it is a point of quite considerable interest to farmers. They say that farmers take exception to Garda inquiries in regard to their applications. It is perfectly true that farmers applying for loans do not want other people, be they Civic Guards, representatives of the Government or the Corporation or whoever they may be, coming around to see if they are creditworthy. I suggest that sort of thing should be cut to the minimum. I agree with Senator O'Quigley in praising what Senator O'Grady said because he was absolutely right in suggesting that to insist on a farmer supplying one or two guarantors is simply placing an obstacle—a psychological rather than a physical obstacle—in his path because he will hesitate, and the more honest he is, the more he will hesitate.

It is all nonsense to suppose that the decision to force a farmer to get guarantors before he borrows is sound business practice; in fact I should say that sound business practice is for the Agricultural Credit Corporation to be encouraged to take risks and, if necessary, occasionally to lose money because, what bedevils the whole thing is the notion that if there is a balance sheet loss on any item or anything that looks like a bad debt—which is regarded as a run of the mill occurrence in business—it is regarded as a crime in the Agricultural Credit Corporation. That is something we must fight—all this "necessity" for guarantors for a man who, after all, has a stake in the country, who has a farm and a house and can be got at far more easily than any other member of the community. To insist that he should provide guarantors is to make a farce of the whole matter of making money easily available to the farming community.

Linked with that is what several Senators, particularly Senator O'Grady, said, the fact that the Irish farmer is creditworthy and that he tends, when he asks for a loan, to be able to justify that to the hilt and show that it will be used for useful purposes. The remark was made, and I think it should be quoted here, by Mr. F.W. Gilmore, Deputy Governor of the U.S. Farm Credit Administration, in his report which was before both Houses. He said:—

"An industrious small Irish farmer of good character who has not previously repudiated an obligation is worthy of credit up to £100 without security other than his own good name."

That is common sense and it is in that sense that I should like to see this Bill being implemented and to see that the powers that are being sensibly granted to the Agricultural Corporation in relation to the agricultural community, are sensibly and audaciously used for the purpose of making it easier, as I said at the beginning, to lend money to the agricultural community and making it easier for the farmer to borrow. My hope then is that the Bill will be used imaginatively, that these new powers will be used imaginatively and courageously for these two purposes.

May I intervene for a moment? Since to-morrow is a Church holiday and we do not sit on Church holidays, might I suggest that we sit beyond the normal hour to complete the Second Stage of this Bill and then to complete the Juries Bill? I should like to facilitate the Minister for Justice, who has been waiting all the evening for this Bill, if the House agrees.

Is there any possibility of the Minister for Finance of getting in at 10 o'clock? I agree entirely that we should finish the Second Stage of the Bill and also the Juries Bill, if possible. I am not trying to prevent Senator Brennan from speaking.

An Leas-Chathaoirleach

There are three Senators to speak but I do not think they will take very long.

On the question of taking the Committee Stage of the Juries Bill tonight, it seems to me to be very precipitate to be trying to squeeze it in afterwards, if the Minister for Finance is to start to reply at 10 o'clock. In view of the fact that in the Dáil the Minister for Justice said there was no rush whatever in the case of the Juries Bill—that is on record— it seems to me we might well defer consideration of the Juries Bill until the next day of sitting which will probably be next week.

An Leas-Chathaoirleach

The Senator should have a good deal to say as to how long the discussion might take since he has four amendments down, a good many more than any other Senator.

That only adds weight to my suggestion that we defer it until next week.

There may be good news for the Senator about the Juries Bill.

An Leas-Chathaoirleach

I think we might agree to take it in that case.

I am loath to delay the House at this stage, seeing that it is already late, by going into every aspect of the Bill and in fact I do not think there is much danger of the Bill not getting an easy passage through the House, but I should be lacking in my duty, as one coming from a community of small farmers, if I did not congratulate the Minister—and the Minister for Agriculture—on introducing a Bill which will be very acceptable to the farmers with whom I am in constant touch.

Notwithsanding that some Opposition speakers attempted to tear the Bill to pieces, the real criticism made was that the measure was not sufficiently ambitious, not sufficiently wide or generous. I should like to say the same thing. If and when circumstances permit, I trust the Minister will be as generous in future years as he is this year. I agree with Senator Sheehy Skeffington that the Corporation may be, or may have been, a little overcautious in regard to risks. They have been too cautious and I hope they will be a little less so in future.

I would welcome a much lower rate of interest and, as a matter of fact, I agree with the Senators who say the rate of interest is too high. When you borrow at all, the interest is too high. I have always found it so and I would welcome a much lower rate not only in the case of the Agricultural Credit Corporation but also in the case of the commercial banks. Surely if people are forced by circumstances to borrow for the purchase of machinery in some cases, trucks, tractors, cars and television sets and pay 12 per cent. interest—I think somebody mentioned as high a rate as 15 or 16 per cent.—surely 6½ per cent. is reasonable in present circumstances.

The Senator is entitled to his opinion, but I have mine, and I think it is borne out by the fact that the commercial banks have gone out after a certain amount of business in that respect. There is not much hope, as any person with a realistic approach will agree, of getting money at a cheaper rate. I should like to meet somebody prepared to offer money at a cheaper rate. I do not know how it could be raised; but, suppose by some stretch of the imagination the Minister said he would impose a penny on the pint to give loans to farmers free of interest, what an outcry there would be.

Would it not be a good way of spending the money?

I agree, but it would bring the Sword of Damocles down on his head. Again, I welcome the Bill and congratulate the Minister on introducing it.

My contribution will be very brief. I congratulate the Minister on the Bill. I should like to see the money advanced by the Corporation spent on good husbandry. Like Senator Donegan, I feel people are going a bit too far in the purchase of machinery and many articles which are unnecessary. These articles are being purchased simply because neighbours have them. It is like the craze for motor cars and everything else. I have a deep and abiding interest in good farming and good husbandry, in the feeding of potentially good cattle and in their disposal at as high a profit as possible. That has been my policy since I was a young lad.

The commercial banks have a tremendous advantage over the Agricultural Credit Corporation because they are located in towns all over the country. They have local knowledge and experience. The Agricultural Credit Corporation could not make the advances it should have made because it had no proper liaison. It has been at a tremendous disadvantage all the time. It is essential that the organisation should have some kind of information as to the credit-worthiness of farmers and their ability to meet their loan commitments, to say nothing of information as to the ability to increase the productivity of the land, thereby increasing their own and the nation's wealth. Too much money has been put into machinery. I have known the finest of Ransome threshers to be discarded the moment the combine harvester appeared. Indeed, the Ransome thresher is looked upon in the same way as the bicycle; it is obsolete.

I believe in liming the land, manuring the land, raising the standard and quality of one's cattle and one's crops. That is what will increase the farmers' income and the national income. Giving loans will probably be detrimental in some respects because people will be involved in commitments they will not be able to meet.

I welcome the Bill. I am very anxious that the farmers should be made credit-worthy. I interjected when Senator O'Donovan was speaking merely in order to ask a question. I asked him where could one get money at two per cent? This sum of £10,000,000 is not the limit. If the Minister finds at some future date that more money is necessary, and that the money now provided has been spent usefully and judiciously to increase the productivity of the land and the farmers' income, there is nothing to prevent him coming here again and getting exactly the same reception as he has got tonight.

I am very glad the Minister has brought in this Bill. I think, however, that it is rather parsimonious. I took him to task on the Central Fund Bill with regard to the general approach to agriculture and the necessity there was to stimulate that industry more than any other industry. In 1959, when the Industrial Credit Corporation Bill was brought in, it was possible to increase the amount available from £5,000,000 to £15,000,000. I hope it will not be long before the Minister comes in here, and asks us to increase the sum available for the Agricultural Credit Corporation from £15,000,000 to £30,000,000.

If the Senator puts down an, amendment to that effect, I will accept it.

Fair enough. I think it is most desirable that it should be increased. I shall be delighted to take the Minister up on that and I shall put down an amendment on the lines suggested, with, I am sure, the support of many of my colleagues here.

In the Golden Vale, there are some 50,000 acres which are let every year on the 11-months system. Most of the lettings are made because those who own the land cannot engage in the sort of husbandry to which Senator Brady referred. For one reason or another, they have not got the money to invest in the land. It may be a question of giving a dowry to a girl who wants to get her portion and so the money is not readily available for investment in the soil. They keep ten, fifteen, or twenty acres. They put some cattle on them and, little by little, they work their way back until, they are able to farm the lot themselves. It would be far better if they farmed their own land all the time instead of letting it.

I shall probably be described as a neo-socialist, but I do not mind that. I cannot see why in a country town where there are already fifty public houses, at least four banks will compete to give someone the money to open another public house. At the same time, a farmer will not be able to get a loan from any bank, unless he can find one or two people to go security for him. If someone wants to build a dancehall or a cinema, the money is available at the same rate as it is made available for agricultural production. When a farmer puts £100 on deposit, he gets half the rate of interest the bank would pay if he had £15,000 or £20,000. There seems to be a distinction drawn as between small, loans and big loans, but there is no difference made as between one sort of credit against another.

Services with which the community is adequately supplied should be dealt with after a certain fashion. If someone wants to engage in an enterprise which is not productive, he ought to pay the highest rate of interest. Possibly a little lower rate should be demanded in the case of amenities. Industry ought to pay more than agriculture because agriculture is the most important item in the whole economy. One way or another, we shall have to stimulate it. I am very glad the Minister has taken up the challenge and that he will be prepared to increase the amount to £20,000,000 by way of amendment. I shall certainly put down the necessary amendment. I thank the, Minister for so readily agreeing to increase the amount.

It would be unfair to the House, at this late hour, to say all the things I should like to say. There has been a long debate on this Bill, which is not really an over-important measure. All it proposes to do is to increase the share capital and the borrowing power of the Agricultural Credit Corporation and to allow it to go into competition with the banks in the matter of hire purchase. That, in substance, is what the Bill proposes to do. Some of the speeches were overshadowed by what Senators. propose to say on the Appropriation Bill. Hence, we had the type of debate that we had and some statements outside the scope of the measure, in my opinion. That, of course, is a matter for the Chair. It was refreshing to hear Senator O'Grady and Senator Burke, who seemed to be fairly practical and fairly critical of the Board.

I shall not cynically welcome the Bill and thank the Minister for bringing it in because I am rather critical of the Corporation's affairs. I have expressed that criticism whenever I got the opportunity. I have referred to their ever-cautions financial policy. The Minister hopes that there will be an improvement and hence he brings in this Bill.

The Minister has stated that he could easily increase the borrowing powers of the Corporation. If the Minister did increase the borrowing powers from £12 million to £20 million, does Senator Burke think that the Corporation would be able to use that money? My opinion is that they would not be able to do so in the foreseeable future because of the ever-cautious financial policy they have operated in the past. They have not succeeded in growing up and becoming an adult financial institution in competition with the commercial banks, as they should have done in their length of life. The Corporation has been in existence a long time. It has operated from one centre. It has no agencies throughout the country. It has not become adult. I hope there is a new approach to this matter.

I am sorry to have to say this. I am not making a personal attack on members of the Corporation or the managing directors, as one speaker appeared to do. Perhaps I took a wrong view of his speech. I am not making any personal attack because I do not know anything about them. I know only the results of their operations. I know nobody connected with the Board.

We have had suggestions by people who do not take this matter seriously. Senator Sheehy Skeffington and Senator O'Quigley suggested interest-free loans. I wonder did they give a moment's thought to the suggestion?

It was done once before by Fianna Fáil, in 1947.

If I get an interest-free loan, I can lend the money to Senator O'Donovan and I will get a rate for it. I can lend it to Senator Burke, who may want it for some worthwhile proposition at a cheaper rate than the rate at which he can borrow from any source.

I shall not allow Senator O'Donovan to make the sort of reference he got away with making to Senator Brady. He suggested that Senator Brady jingled money in his pocket and that that was his idea of money. I suggest that Senator O'Donovan jingles it in his mind. It is easy enough for people to get half-baked ideas about money, but in the long run, it is on the ability of this country to give goods and services that credit is based and it cannot be based on anything else. It is easy enough to get half-baked ideas and to make nasty references to Senator Brady. I do not want to lose my temper.

Perhaps the Senator will tell me what the nasty reference was?

I hope the Minister's hope will be justified. I heard a former Parliamentary Secretary, who is now a member of this House, on this side, expressing the genuine hope that the Board would grow up and be able to give better service to the farmer than the commercial banks gave. That was when he was introducing the 1947 measure. That hope has not been justified by the Corporation. The Minister has the same hope and says he will increase the borrowing powers of the Board to £20 million. I know quite well that they could not use £20 million but I hope the Minister's hopes will be realised.

Senator O'Quigley said he hoped that when I got up, I would not say that no constructive suggestions had come from that side of the House and he advised me, if I thought that, to wait and read Senator O'Donovan's speech in case I had missed the constructive, suggestions. I am afraid I will have to wait and read the speech.

Not so much Senator O'Donovan but Senator Donegan and Senator O'Quigley set out to find fault with the Bill without trying to see if anything could be done to improve it in any way. It was fault-finding all through.

I must say, as I said here on the last debate, that I find the Fine Gael Party in the Dáil much more intelligent at any rate on Bills I bring in. There was not the same approach to this Bill in the Dáil. They discussed the Bill on its merits, made suggestions, asked questions, and so on, and there was none of this cheap talk about putting in £10 million as the limit the farmers would get. That is the most ridiculous suggestion ever made and it was Senator O'Quigley's contribution to this debate.

That is Senator O'Quigley.

Yes; it was his contribution. With regard to the six per cent., Senator O'Donovan said that if I had come in and said the rate would be three per cent., that would be much more useful than all my talk in introducing the Bill. I could say back to Senator O'Donovan that if we can achieve in this country a better approach to agriculture by applicants and if they use the money they get intelligently and wisely, it will be a very much more important thing than giving it to them at three per cent. because, if a man gets a loan at three per cent. and does not use it, he loses money and never gets it back, whereas if a man gets a loan at six per cent. and uses it properly, he will be able to pay his six per cent, That is where the difference comes in. Anybody can argue, of course, that the interest is too high and that it would be much better if it were low, but there are other considerations to be kept in mind.

Senator O'Quigley said that if I came to the Seanad and said that I was going to give £50,000 a year to help the Agricultural Credit Corporation to keep down interest rates and pay for their bad debts, he would applaud the Bill as it was being applauded on this side. I explained in the Dáil very fully and in introducing the Bill here that the capital is being increased from £300,000 to £2 million. I said in the Dáil very plainly that the Corporation was to run its business, charge whatever it regarded as a reasonable rate of interest—the lowest possible, of course—and take risks. I said there was no use in its being there if it would not take risks because the commercial banks would take any case where there was no risk.

It was there for the purpose of taking risks. If it loses money, we do not regard it as a crime. I made that very plain to them. Then when it paid for all its losses and so on, it would consider what interest it could pay on the £2,000,000. If I have to forgo £120,000 a year or whatever the interest is on £2,000,000, that is all right. If Senator O'Quigley had read my introductory speech, he would see I was prepared to contribute more than £50,000 a year to the Corporation in order to help it to keep the rate of interest at a reasonable level. If I did not do that and the Corporation was going to take risks, it would have to make some calculation of what its losses would be. If the losses were going to be two per cent. per year by way of bad debts, it would have to charge a higher rate of interest, so that the interest would be higher still. If it could pay a lower interest on the capital, it could keep its rates at a reasonable figure and take risks at the same time.

The reason chattel mortgages were not used in the past was that they were administratively cumbersome. There were restrictions which were almost impossible to get over. They were there by law and the Board could not get over them. That is why the amount advanced on chattel mortgage was so very low.

They put them there themselves.

The Oireachtas put them there.

At the request of the Board.

They are there, anyway. We are now taking them away and that is all that matters.

We will wait and see.

The Senator need not do that. Let him read the Bill. The Bill lays that down. We are taking those restrictions away and the Corporation will be in the position to make a hire purchase deal the same as the ordinary banks can make it. That should enable the Corporation to make loans for machinery and so on which were mentioned here, just as well as any ordinary bank or hire purchase company can do it. I hope it will be able to do it cheaper than these people are doing it. At any rate, no unnecessary restrictions will be put upon the Corporation.

The Minister for Finance, after consultation with the Minister for Agriculture, appoints the members of the Board and amongst them a representative of the commercial banks is appointed, but it is not mandatory on the Minister to appoint a representative of the commercial banks. I do not know when this arose first. I suppose it was out of courtesy that the Minister reappointed one of the bank representatives when the obligation remained that he should appoint three.

It is true, as Senator O'Donovan says, that the first chairman talked a lot about co-operation. As a matter of fact, I remember going myself, as other Deputies did, with the first chairman to many meetings all over the country. We all did that at the time. If there was a good thing Fianna Fáil supported——

That is very bad history.

Whether is was good or not, Fine Gael are opposed to it and do their best to quash it. When we first started in opposition, we took a proper view of those things. I went to many meetings with the chairman of the corporation, who was trying to organise credit societies. He suggested on many occasions that the co-operative societies should try to form a credit society and, through these, the banks would then make their loans. It would have been a good idea if it had been operative, but it was impossible to get the farmers to club together to form a credit society. The chairman's idea was a very good one, indeed, but it was never adopted.

Senator O'Donovan also spoke of the man living on a farm and not having administration taken out who was therefore ineligible to take a loan. The Land Registry rules in 1959 made a change. Where the valuation is below £40, they made the change that the registrar, if application is made to him, can cancel the equities more or less following the rule of the Statute of Limitations.

This is not equities at all. This has nothing to do with equities. This is a case where there is no land registry title extant.

This is where it arises.

When the Senator's Party were in power, why did they not make a grant of limited administration?

It arises mostly in this way and I am talking from experience. Suppose a grandfather was not fully sure of proper title. He might have a few brothers in America but does not know what became of them. He might not know whether his brothers had families or not. The title went to this man's father and this man came into it next. There is no doubt in that case that as far as he is concerned, he got it from his father and the father got it from the grandfather. They can go back more than 30 years. In that case, the man can get himself registered as the owner and that is the end of it. Everything is all right. Let us take the case where the doubt arises. The owner himself may have a brother in America of whom he never heard. In that case, it will be a much longer procedure. He will have to be there for 30 years before the matter can be fixed up.

Senator Donegan raised a question which was also raised by Senator Sweetman in the Dáil. He referred to a decline in the number of in-calf heifers. There has been a steady increase over the past five or six years. There was a set-back in January this year but it was not a very serious one. I do not think we should take it as a trend backwards again. It may have been accidental, due to some cause which I have not been able to discover. I asked one farmer because I thought he would be able to give me a fair reason for this. He said it really did not pay to keep over heifers and have them in-calf. Therefore, the number went down. A few days afterwards, I met another farmer and I asked him how he was doing in regard to the business of in-calf heifers. He replied: "It is the one line in this country that pays; it is the best line of all." There you had one farmer saying it was no good and another saying it was the best line of all. It is very hard to get an explanation. We need not take it too seriously.

Senator Donegan talked about Denmark and said that the farmers there are getting a 50 per cent increase in direct help. He tried to give the impression that we are endeavouring to say we are doing the same thing. We are not saying we are doing the same thing. If Denmark is giving another £12 million for subsidies, are we to say that we had better not bring in this Bill at all because some foolish man like Senator Donegan, suggests that? It would be impossible to do business in that manner.

Let us get some more reliable authority than Senator Donegan. The last Report of the O.E.E.C. on the matter of giving help to agriculture was in 1955-56. At any rate, it gives the comparative figures at the time. The total State assistance to agriculture was 4.9 per cent. of gross national product and the percentage in Britain, Austria, the Netherlands and Switzerland was 2. The percentage in Belgium, France, West Germany and Denmark was 1. So in 1955-56 we were giving 4.9 per cent of our gross national product to agriculture and Denmark were giving I per cent. Since that, as Senators are aware, the amount we are giving has doubled. I do not know if Denmark have doubled theirs, but they would have to multiply it 16 times to be up to us, and Senator Donegan asked what we were doing for agriculture compared with Denmark. I should like to remind Fine Gael stalwarts that I am quoting the 1956 figures. Of course, I can quote them because they are now double what they were then.

Senator Donegan wound up with another political gibe, of course, which we are so accustomed to getting from him. He said it might be better to subsidise the rate of interest in respect to agriculture rather than to purchase more jet airplanes. The two things are completely different. If we subsidise the lending rates on agriculture that must be taken out of current account, year after year—not once but every year. If we buy jet airplanes and make a success of them we get our interest back.

You do not get any interest out of them. No interest has ever been got out of them.

If the Senator would try to stifle this Fine Gael prejudice against air lines for a moment and listen—I know they scrapped them just when they were beginning to pay, they scrapped the whole thing——

We made money out of them.

You said they were an extravagance like the Bray road. The Senator should forget Fine Gael for a moment and remember he is an economist—as a matter of fact he claimed the last evening I spoke here that another person I quoted was not an economist——

I did not. I made no comment.

I am sorry, it was your friend. I want to say again that if we subsidise the lending rates, that is a current expense and must be met by the Budget and so on, year after year, and if we buy jet airplanes and, as I said, make them pay, we get the interest back on that money every year instead of giving it out. That is quite a different thing.

The Minister is an optimist.

It is not easy to get Fine Gael to look at anything in a rational manner. They are prejudiced against anything which Fianna Fáil try to make a success of. Senator Lenihan spoke of the Gilmore principle, as it were, of having provincial centres throughout the country. I do not think that would be possible. It would be terribly expensive. Senator O'Grady also mentioned that point. It would be very expensive and I do not think that, even taking the most optimistic view of the amount of business the Corporation do, we could justify the expense of having these centres throughout the country.

The idea is to have credit officers— perhaps two for a start, maybe more— who would visit the applicant who seeks a loan at a certain level. The credit officer would visit the applicant and have a talk with him about his position. If the applicant wants to, he can show his farm or his stock, and that is all right but the inspector—if you like to so call him—will not force himself on the applicant. His main job is to have a talk with him.

That is the idea and I think it is an idea that should be followed for the moment, at any rate, until it grows bigger. Under a certain level it would not pay, because the cost of sending the inspector down to visit the applicant—after all there are applications for £100, £150 and £200—and the cost of his day, his travelling expenses and other allowances, would be a very big amount to add to that loan. It would, in fact, be too big and, therefore, that has to be dealt with in another way.

We now come to the point: how will they be dealt with? Up to this they write to the Garda Síochána. I think the Corporation are not very keen on employing the Garda Síochána but what is the alternative? After all, they cannot give a loan just because a person asks for it. They must make some inquiry. Every Senator will admit I think, even though he may be a very innocent man, that there are chancers in this country. Therefore some examination must be made of the application and the applicant and the simplest thing for the moment is to ask the Garda Síochána. If another scheme can be suggested that is just as good, I shall certainly convey it to the Board for their consideration.

Senator O'Grady talked about making loans to creameries. That is a very good idea. It goes back to the original idea of the Chairman who started the Corporation. If the creameries want to get money to lend to their members and especially if they take the responsibility, as it were, of collecting the loan out of the milk cheque, there is no doubt they will be lent money. There would be no hesitation about it. That is a good idea in many ways.

It is said the Corporation ask for guarantors. Perhaps because I am the Minister in touch with the Corporation, I get a great number of letters from people looking for loans. The Corporation seldom ask for guarantors. The usual thing is to get a mortgage and once there is a mortgage, no guarantor is asked for. Sometimes one mortgage is not sufficient or there may be a second mortgage and the applicant says: "We have not enough security so we will get a guarantor as well," but that is only the occasional case. Under this new power, they can charge the land. It may be much simpler than a mortgage. A mortgage means the signing of two huge documents—it is like voting for the Seanad when there were 80 names on one page.

Now the man applies for the loan and if the Corporation think it is all right, they say: "Yes, we will give it. Do you agree to our charging the land in the Registry?" and he writes and says: "I agree." That is all he has to do. They do the rest and do not charge him. They do not say: "You owe us so much for having it charged." There is no Land Registry fee and no stamp fee and the Corporation does the necessary correspondence. This will make it easier for the Corporation to give loans and it will certainly make it much more simple for the applicant.

We come now to the matter of the £1,000,000. Every Bill of this type brought in here—for example, the Electricity Supply Bill and the Bill dealing with Bord na Móna—has a limit. There must be a limit. The idea of that limit at the beginning was to curb the Government and nothing else. It was put there in the beginning because the Opposition said: "We want the Government to come back to us again after a certain amount of money has been spent." That is the idea behind it: the Government say: "We want £5,000,000," and the Opposition say: "All right; when you have spent that money, come back to us again and we will have a discussion about how things are going." The idea of the limit is that the Dáil in particular and the Oireachtas in general shall control the spending of public money.

They have the control there by saying: "You can spend that much but no more. Come back to us when that is spent." That was why we did not want to go too far. Now they are handing out £800,000 this year. Suppose they double that next year. I do not think they could do more. I think it would cost too much. There is about five years' spending there before they will come back again. As well as the £10 million, there will be £2 million capital, which means £12 million. There is £3 million out at present so they have £9 million to spend before looking for more.

Senator O'Quigley tries to give the impression to the farmers on this side —there are no farmers on that side— that we are not friendly to the farmers. You need not look around you—there are no farmers in your Party. They never had any farmers in that Party.

The Minister is in great form to-night.

I tell the truth. Senator O'Quigley tries to give the impression to the farmers that we will not spend more than £10 million on agriculture; in other words, that we will spend only £1 million more. If he can make no better point against us, he is hard up. If Senator Burke comes along with this amendment, it means that he has such trust in this Government that he says to us: "You can spend £50 million and never come back to us again because it will be all right."

If you spend it on agriculture, I do not mind. If you do not spend it on agriculture, the country is finished.

We are spending exactly twice as much now as the Coalition.

The banks are giving twice as much.

They are giving far more than twice as much.

Credit creation.

The joint stock banks have now given out £34.7 million. Under the Coalition, they were calling in until they called in down to £15 million or £16 million.

That is why we are in balance during the average of four years.

The banks put us out of office, did they not?

For a very good reason.

Among other sections.

Senator Sheehy Skeffington asked if I could give any figures about the amount of money applied for and spent in the past few years. I have figures only for the past couple of years but they may be some indication of what the Senator wants. In the past two years, the Agricultural Credit Corporation issued 1,938 and 2,084 loans respectively. The number of applicants refused loans in those two-years represented about 18 per cent. of the total number of applications received.

One thing we must keep in mind is that the Agricultural Credit Corporation is largely the lender of last resort. I have received several letters in my time from people who were refused by the joint stock banks and then, having been refused by them, they tried the Agricultural Credit Corporation. You will naturally, therefore, expect to find a fairly large number of refusals. I should like to repeat that I personally have told the board of the Agricultural Credit Corporation that they should take risks. I said: "You will not find me coming back and reprimanding you if you lose money on this thing by taking risks." As I explained already, by putting in £2 million capital, we say to them: "If you do take risks and lose, then I shall suffer. In other words, when you come to pay me the dividend on whatever you have left, if you are taking risks on losses, I know the dividend will be small."

The Agricultural Credit Corporation can take deposits now. I think there was some difficulty up to this. However, we shall be able to deal with this on Committee Stage. The board of the Agricultural Credit Corporation are preparing a scheme. Their office is in Dublin. They have no branches throughout the country and they are therefore at a disadvantage in taking deposits from farmers. It is possible that they may devise a scheme such as bonds, and so on. They are being freed in one respect in this Bill inasmuch as they need not insist on a 30 days' notification before a deposit is withdrawn, as they had to do up to this.

That is another part of the job they did not do. The Minister is too kind to them.

We are giving them freedom in that respect now. Deputy Burke drew a picture of four banks in a town where there were 50 publicans. He indicated the banks were quite willing to lend money to buy a pub but not to buy a farm. Somebody is lending money to buy farms because land was never so dear.

That is true.

More credit creation.

German money.

Question put and agreed to.
Committee Stage ordered for Wednesday, 17th May, 1961.