Private Business. - Rates on Agricultural Land (Relief) Bill, 1964: Second and Subsequent Stages.

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

This Bill is intended to give legislative effect to the Government's decision—announced by the Minister for Finance in his Budget statement last April—to make available an extra £1.4 million to provide additional rate relief for agricultural land. The Bill will apply to the agricultural grant to be paid in each of the three financial years ending on the 31st March, 1967. It will increase the primary allowance from 70 per cent to 80 per cent of the general rate in the pound. The primary allowance is given in respect of rates assessed on land valuations up to £20 and on the first £20 of higher valuations. The supplementary allowance in relief of rates on land valuations over £20 will be raised from 25 per cent to 30 per cent of the general rate in the pound. These increased rates of allowances will bring the total amount of the agricultural grant to approximately £11 million in the current financial year.

The agricultural grant was originally given under the Local Government (Ireland) Act, 1898, as a fixed annual subvention providing a flat rate of relief on all agricultural land in each county health district. The basis of distribution and the total amount of the grant were altered on a number of occasions by Acts passed since 1898, but until 1946 the grant was always a fixed sum—the actual amount to be provided being stipulated from time to time by successive statutes.

A breakaway from the flat rate of relief applicable to all land in each county health district was first made by the Rates on Agricultural Land (Relief) Act, 1946. That Act related the total amount of the grant to the rates actually levied on land by county councils. It provided that the grant would represent the sum needed to give relief of rates by way of a primary allowance equivalent to 60 per cent of the general rate in the pound, on the land valuation up to £20, a supplementary allowance of 20 per cent of the general rate in the pound, on the land valuation over £20 and an employment allowance at the rate of 10/- in the £1 on the land valuation over £20, subject to the limitation that this allowance should not exceed £6 10s. for each adult workman employed on the holding during the whole of the preceding calendar year. The agricultural grant was continued on this basis until the passing in 1953 of an amending Act which, as subsequently extended, applied to the nine financial years which ended on 31st March, 1962. The 1953 Act left the primary allowance unchanged at 60 per cent of the general rate in the pound; it abolished the supplementary allowance and it provided for an increased employment allowance of £17 in respect of each qualified workman, subject to the limitation that the total of the employment allowances would not exceed the rates on the land valuation over £20. The Rates on Agricultural Land (Relief) Act, 1962, raised the primary allowance from 60 per cent to 70 per cent of the rates on land valuations up to £20 and revived the supplementary allowance, fixing it at 25 per cent of the general rate on land valuations over £20. The employment allowance was left unchanged.

The total amount of the grant rose from £2.91 million in 1946/47 to £8.95 million in 1963/64. The increase in the primary allowance to 80 per cent of the general rate, provided for in section 3 of the present Bill, will cost an additional £994,000 and the increase to 30 per cent in the supplementary allowance under section 4 of the Bill will cost £375,000 extra, bringing the total grant for the current financial year to an estimated £11.14 million. The effect of the increased grant will be to reduce the net rates leviable on agricultural land in the current year below the figure for 1956/57.

The primary allowance will absorb an estimated £7.95 million of the £11.14 million provided in the current year. In the case of three out of every four rated holdings of agricultural land the primary allowance will meet 80 per cent of the general rate on the entire holding. On average, the various allowances will also meet more than 53 per cent of the rates on land holdings with valuations above £20. In all, the Exchequer will, this year, defray 63 per cent of the total rates on land in county health districts as against 57 per cent in 1963/64 and 47 per cent in 1954/55.

I accordingly recommend this Bill for consideration of the House.

Is trua liom nach bhfuil an tAire Rialtais Áitiúil ná an tAire Talmhaíochta anseo chun an Bille a stiúriú mar adearfá. I am sorry the Minister for Local Government is not here to recommend this Bill to the House because it would be interesting to talk to him about some of the figures in this Bill in relation to figures he has been using in other places in recent times. However, apart from that, there is nothing really controversial in the Bill itself. It affords relief to the farming community, which is, of course, the hardest pressed of all sections of the community, not having benefited in any way from the various increases which have been granted from time to time in recent years. On that basis, then, we welcome this Bill or any measure like it that tends to alleviate the conditions of the farming community.

I welcome this Bill, too, as I believe it is a definite step in the right direction. The 1956/57 National Farming Survey proved that 75 per cent of the farmers of Ireland were living on incomes less than the agricultural labourer's wage, and it has taken six years for the Government to do anything about this.

The Minister now states that 77 per cent of our farmers are living on land with a valuation less than £20. I think the Minister and the Government could easily have abolished the rates on holdings of up to £20 valuation. I think it is unjust considering that a worker, with an income equal to what the £20 valuation farmer can expect to have, will pay no income tax, and yet the small farmer in Laois with a £20 valuation, for example, will pay £9 4s. rates. That, I submit, is an extra tax on top of the turnover tax and various other taxes he must pay. If that man were a worker and earning, shall we say, the agricultural labourer's wage, which is around £7, he would have to pay no income tax. Yet, because he is self-employed, the Government take an extra £9 or £10 a year from him. I think that is most unjust. It would not cost that much for the Government to do away with the first £20 valuation.

The National Beet Growers' Association at a recent symposium in Athy gave some figures for the costings of an acre of beet. It was shown that the small farmers have not a lot of profit to live on. As well as that, we must remember that this year the Irish Sugar Company are restricting contracts, and this is hitting many of the small farmers. I submit that the Government have an obligation to the small farmers, since they are in the majority. It is deplorable to find that farmers who do not purchase lime and fertilisers from the Irish Sugar Company are being debarred from growing beet. The extent of the relief this Bill brings in is, of course, welcome.

I should also like to welcome the Bill. I come from a county where roughly between 75 per cent and 80 per cent of the farms are under £20 valuation, a county with a pretty high rate and, in certain parts, with high valuations of up to 50/-per acre from Clarecastle to Limerick. The people are being compensated in other ways and this Bill will put the rates on a par with the position in 1956/57.

I know a number of small farmers of under £20 valuation who have qualified to build their own houses through Government grants and the supplementary grants provided by the county council. With the help of a couple of boys on the farm, they are enabled to build very nice houses. If they are short of money they can get loans from the county council, repayable over 35 years. In recent years such people have benefited enormously from extensions in the social welfare sphere. The Health Act and other measures have conferred wonderful benefits on people with valuations of less than £20. However, there is one section of the community whose case I should have liked to commend to the Minister for Local Government, had he been here. They are the people in the towns. I know people living in towns——

The Bill relates to agricultural rates.

I am sorry to have drifted from it but I wished to say a word or two about a section of the people who do not get any relief. Of course, they pay full rates and get no remission. Some of them have nothing to live on except an ordinary small business. However, coming back to the Bill, I am glad to be able to say, as a very large ratepayer, that this measure of relief is a wonderful thing, a great incentive. Farmers with valuations under £20 have been held up more or less as people who have a very poor living. I know a lot of such people who are very well off, a lot better off than people with valuations of £50, because they are good, industrious people who know how to use their holdings.

They work their holdings to the maximum capacity and are really a credit. I could paint pictures of small farmers in a parish not far from me where there are only two big holdings. Those farmers supply the Limerick market with potatoes and other vegetables. Many of them grow up to seven acres of potatoes and have two acres under cabbage. Many of them travel into Senator McDonald's neighbourhood and they supply big shops in Limerick. Therefore, valuation is no criterion of a farm's capacity. People with high valuations are sometimes ne'er-do-wells who do not give the same amount of husbandry to their holdings as smaller farmers. The Bill gives benefits amounting to derating— relief to the extent of 80 per cent. I congratulate the Minister and the Government on providing this money which will put the rates on the level of 1956/ 57, a remarkable achievement.

I welcome the Bill, as far as it goes. It provides some small measure of relief of the hardships experienced by the small farmers. We all know they are the weakest section of our community and while the Minister says the present measure will reduce their rates to under what they were in 1957, it can be stated, too, that these people as a community have not participated in increases in the standard of living since that year.

Consequently, they are in great need of help and I hope it will not be long before the Minister is back to introduce a measure to provide complete derating on the first £20 of a farm's valuation. It is a pity that money provided for the relief of rates has not been used more effectively. It would have been far better if the employment allowance had been increased—if some of the money spent on the relief of rates on valuations of under £20 had been used to increase the employment allowance —because the employment allowance of £17 per worker has not been changed since pre-war.

Nowadays that figure is totally outmoded and acts as little or no incentive to a farmer to employ extra men. It is high time we modernised it and used it as a basis to help the man who is working his land and, by contrast, penalise the man who is not. I appeal to the Minister to ensure that attention is given in the near future to the employment allowance.

In respect of farms with valuations above £20, some cognisance should be taken of the number of children dependent on the farm. When you admit the principle of an employment allowance as a method of mitigating the rates, you must also admit a certain deduction in respect of children of under 16 years who are being educated. That argument would go some way to distributing the money available more fairly and would give help where it is needed to the man with a large family who is endeavouring to provide worth for labour on his land and to get from the land its maximum capacity.

I also welcome the measure. Nobody will object to any relief given to agriculture in whatever way possible. Despite all the relief, a very important factor causing concern in relation to agriculture is the level of employment on the land. It is gradually dropping despite all the relief given. It appears to be still on the downward trend and that is a serious matter. We might at some time get a measure in which certain conditions would attach to reliefs which no one would object to giving. So far, the records do not show any steady increase in the employment content. The reverse is the case, and that is a rather dangerous position. We hear talk about emigration but our biggest industry is, and we hope will remain, agriculture. Employment in agriculture should at least be steady and that should be borne in mind in giving reliefs. I am not saying the Minister does not keep it in mind.

If I understand the position correctly, if an agricultural worker, or a county council worker—they are much the same and their wages are low, as we know—gets a vested cottage, he has to pay the full rates which very often work out at as high as 3/6d. a week. That appears a big rate to him, plus whatever rent he may have to pay while the cottage is being vested, and that may be a considerable time from the date of application. There appears to be no relief for him, and he generally has a young large family. Some relief should be given in such a case.

The general principle set out in the Bill is agreed but, as Senator Quinlan said, a man with a young large family could be given a special relief. He is generally on a small holding with a valuation of under £20, and he finds it as difficult to live and get a reasonable amount of schooling for his children as it was found 20 years ago. I have been through various parts of rural Ireland and I know the man on a small holding is not in a position to avail of all the reliefs given to agriculture from time to time. For instance, he has no opportunity to avail of the heifer scheme because he has no means of increasing his stock. He depends on his dairy produce or the sale of milk to the creamery for his monthly income, whereas if he had a larger holding he could make other arrangements. Such a man with a young family should get special consideration.

Since the Minister has gone so far he might have gone the whole way and completely derated £20 valuations. Senator Brady referred to a section of the people I want to mention, the small shopkeepers in the small towns and villages.

The Senator is now moving outside the scope of the Bill.

With all due respect, Senator Brady was let refer to it.

He was checked.

Another point is that a man with a valuation of £5 can work for a neighbouring farmer and there is a labour allowance, but if his valuation is £5 10s. there is no allowance for labour. That is a great hardship. The neighbouring farmer will employ the man with the valuation of £5 because he will get the allowance, but the man with the slightly larger valuation is debarred from working for his neighbour because his neighbour will not get the £17 allowance. I think the figure of £5 could be increased.

I appeal to the Minister to reconsider his decision in the coming year and to derate valuations of £20. That would save a certain amount of expense in collection and administration, and it would be a great help to small holders. People with valuations of £20 have a very poor living, having regard to the present cost of living, without trying to pay rates also.

First let me make it clear to the House that 77 per cent of all holdings in rural Ireland are under £20 valuation, and under the provisions of this Bill there will be relief of rates up to 80 per cent for each and every one of them. In fact, in my county the percentage of people with valuations of under £20 is between 94 and 95. In the counties along the western seaboard and the other counties with small farms, generally speaking, the percentage would be the same as it is in my native county, so the House will appreciate that so far as the small holders are concerned, this Bill relieves them to the extent of 80 per cent of their rates.

Senator McDonald suggested that so far as valuations of £20 are concerned the Government should go the whole way in an endeavour to do something to bring the incomes of those living on small farms up to the level of people in industrial employment living in towns. Of course, this is just one step in that direction. If I quote from the Budget Statement of the Minister for Finance in connection with this matter it will make the position clearer than anything I can say. As reported at column 1545, volume 208 of the Official Report he said:

It is the Government's policy that a reasonable relationship should be maintained between the incomes of farmers and those in other occupations.

In consideration of the general rise in non-agricultural incomes, they have decided that a further substantial increase in farmers' incomes should be assured by State action. It is, therefore, proposed that the amount of aid to agriculture should be increased, at the cost of the taxpayer, by close on £5,000,000 in a full year, amounting to £4½ million in the current financial year. The increase will comprise:

(1) an addition of 2d. per gallon to the price of creamery milk. It is to be expected that there will be the same increase in the price paid for liquid milk in the Cork and Dublin Milk Board Areas but this will concern the consumer rather than the taxpayer;

(2) additional relief of rates on agricultural land to the extent of £1.4 million, which, allowing for the higher rates being struck this year, will enable the net charge for rates on agricultural land to be kept at or below the 1956-57 level; and

(3) the raising of the minimum prices for pigs by 8/- a cwt. for grade A and 5/- a cwt. for grade A special.

This relief of rates on agricultural land is only one aspect of the endeavour to bring the people on the small farms in rural Ireland as near as possible to the urban standards to which the Senator has referred and to close the differential between the income of that very important group of our people and the rest of the community.

I think I should also point out that the other provisions made this year towards archieving the objective the Senators mentioned are costing the taxpayer £47 million as against a total provision of only £26 million in 1961. That is a fairly substantial provision. While we should all be glad to see the small man fully derated, we have now gone 80 per cent of the way and we are on the right road.

When we come to the provision of national finances to deal with matters of this kind, it is extraordinary how many people, so vocal about giving away money, strongly oppose any additional taxation it would take to make the very desirable provisions which the Senator advocates on the Bill here today.

Senator Brady referred to these other aids that are being given to small farmers. He referred to people in towns in rural Ireland. All I can say about that matter is that it is outside the provisions of this Bill but that the whole matter of rates in rural Ireland is under special study by the Government and is under inter-Departmental examination, as was announced by the Taoiseach some time ago. It is a complex matter as between the claims made by different counties and requires some study. The matters to which Senator Brady referred will come within the purview of that survey and study which is being made by the Government at the moment. Let me say the same in respect to whatever Senators raised questions about labourers' cottages in rural towns. They also are outside the scope of this Bill. It has nothing to do with them or to do with land in urban areas of any kind. Senators will appreciate that we can, in the main, deal only with matters that have been brought to my attention on the discussion here.

In addition to raising these questions about vested and non-vested cottages for agricultural labourers and others in the country, Senator Desmond suggests that the small man, who is being relieved to the extent of 80 per cent of his rates under this measure, has not the means of taking advantage of other Government schemes. Of course, there is a limitation on the small man by the extent of the unit upon which he is living. Other Government measures are in train to alleviate and help in that situation and to bring up his standard. There is no doubt that many small men are taking full advantage of Government schemes. They are taking advantage, for instance, of doubling or trebling in some cases their sheep population in hill areas and, by fertilisation and other schemes, of increasing the carrying capacity of their lands.

According to the figures, it is not accurate for the Senator to assert that the small man is not taking advantage of the heifer scheme. The figures show that, under the new heifer scheme, the average number of grants payable to farmers is in respect of two heifers. These are the figures so far which indicate the contrary view to that which the Senator suggests that the small people are not taking advantage of that scheme.

If the average figure is two heifers per applicant it is quite obvious that the small man is getting his share of that heifer scheme, and more luck to him if he takes the advice of the agricultural services and is able to increase his capacity. No doubt, after the first year and his initial experience under this scheme he will continue to increase his herd. Indeed, that is a natural follow-up to the spreading of the creamery system to the congested areas, where the people did not have an opportunity of going into dairy farming at all up to recent times. They are doing so now and are doing very well out of it, particularly in many congested areas in the West. They are getting a great chance under the heifer scheme to make a good start to get into the milk business in respect of which they have their market under the guaranteed price that is being paid by the newly-established creameries.

Senator Quinlan regretted that there was not a different system of dealing with employment grants under this Bill and the other Bills dealing with derating of agricultural land. Employment grants apply only to 42,000 farms in the country. That is the number of farmers who are concerned with valuations of over £20. As I explained to the House in my opening statement, the employment grant used to be a maximum of £6 10s. In 1953, that amount was increased to £17, not pre-war, as the Senator seemed to think: that occurred in 1953. That £17 is still there as an inducement to those 42,000 farmers who have valuations of over £20.

Notwithstanding that fact, employment given by these men has been dropping. I candidly concede that. On bigger farms with mechanisation, it is quite obvious the farmers are inclined to employ fewer and fewer than in days of yore. I have heard Labour Deputies in the Dáil argue that this £17 is not, in fact, any inducement whatsoever to these people to keep on labourers and that it should be done away with.

At all events, it appears to me that no matter what figure you reach in regard to this employment allowance, in these days it does not appear to act as an inducement to the larger farmers to keep on extra labour. They are, of course, getting the additional grant for the relief of rates—up to 30 per cent on valuations above £20, in addition to the £17 employment allowance which they are now entitled to. There are only 42,000 of those people and I do not feel that an increase in the employment allowance would in any way, in this day and age, bring about an increase in the numbers employed on the land. Perhaps if these men went into a different line of farming there would be a different story, but our experience so far would indicate that an increased employment allowance would not bring about the result desired by Senator Quinlan.

This Government in 1953, in 1962 and again this year have substantially increased the relief of rates on agricultural land and we have now reached the position under this Bill where there is 80 per cent derating of valuations of under £20, which covers 77 per cent of all the farms in the country, and up to 95 per cent of the farms in the poorer or congested counties. We hope Senators will live to see full derating achieved in respect of farms of under £20 valuation and that those people who in their wisdom oppose the imposition of taxation for the achievement of that aim will have changed their minds.

Reference was made to the heifer scheme. The Minister says the average payment is in respect of two heifers only. Does that not necessarily mean that of all the applications received the highest number of heifers involved is three and the lowest one?

The Senator can take the total number of farms in the country. I have given the number of farms of over £20 valuation. There are 42,000. All the others are less than £20, and the average grant is in respect of two heifers per farm. The arithmetic is plain for anybody who wishes to understand the position. It indicates that the vast majority of our small farmers are availing of the scheme.

On a small farm with a valuation of £20, not very good land, it may be reasonably possible to produce milk from five or six milch cows. Such a farmer might be able to do that without having to purchase fodder. What is his position? We have quite a fair number of such people. How can such a man avail of the scheme?

Is it in order to debate the heifer scheme?

It is not in order.

Would the Minister have any suggestion about how such a holding could avail of the heifer scheme?

I am quite sure there are records of holdings carrying six cows just as there are of those carrying only one or two cows.

I was referring to acreage as well as to the number of cows. You could have six cows on a farm of £50 valuation.

We are moving a long way from the woman of three cows.

And from the Bill.

And from the Bill. Before we managed to extend the creamery areas into the congested districts, we regarded a man with six cows as comfortable because he has from 10 to fifteen dry stock and a number of sheep. Whether that man is prepared to add two, three or six heifers to his stock is a question for himself—a question of whether he will hand feed them or whether he will increase his acreage of grass or whether he will substitute heifers for dry stock which would pay him very well now.

Question put and agreed to.
Agreed to take remaining Stages today.
Bill put through Committee, reported without amendment, received for final consideration and passed.

In connection with items 4 and 5 on the Order Paper, I regret to say the Minister concerned is not available at this time and, in consultation with the proposers of the two motions, we have agreed to ask the Seanad to defer consideration of the motions until either next Wednesday or next Wednesday week, whenever it will be necessary for us to meet.

The Seanad adjourned at 4.20 p.m., sine die.