Private Members' Business . - Agricultural Development: Motion .

Tuesday, 22 March 1983

Dáil Eireann Debate
Vol. 341 No. 3

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Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): I move:

That Dáil Éireann calls on the Government to restore the funds recently withdrawn in respect of aids and services for farming development and to lift their suspension on the farm modernisation scheme immediately.

A Cheann Comhairle, I wonder would you advise me on what time I have.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  : The Deputy has 40 minutes.

Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): We are moving this motion this evening because, in the opinion of our party, the policy adopted by this Government has sounded the death knell for Irish agriculture.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  : Order. If Deputies want to carry on a conversation they should leave the House.

Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): Their policies are negative. Looking at the amendment which they have put down to our motion, one questions which section of the Government is bringing in these measures. When one considers the policy of the previous Government and our approach to the development of agriculture the contrast is obvious. The budget introduced by the Minister for Finance has destroyed any prospect of recovery in the agricultural sector. That Minister was previously Minister for Agriculture in the National Coalition and he was at one time economic adviser to the IFA. The budget has cost Irish farmers in the region of £146 million but the Government have given out only £16 million. There is no doubt that the Minister for Finance has turned his back on Irish farmers and the Minister for Agriculture has not defended them. The budget has sounded the death knell for Irish agriculture.

In 1982 farmers had a good year and the slide in their incomes was halted with [515] a modest increase in real terms. This was due to the excellent price negotiated in Brussels by the then Minister for Agriculture, Deputy Lenihan, and the favourable economic conditions created by the Fianna Fáil Government. Inflation dropped from 23 per cent to 12 per cent, thereby reducing farming costs by £150 million in a full year. There was a drop of 4¼ per cent in interest rates and this reduced cost to farmers by an amount of £60 million in a full year. At the time of the general election there were definite signs that the recession in agriculture was on the way out and the prospects for farmers in 1983 were good.

Disaster struck with the coming to office of the National Coalition. They have shown a complete lack of interest in farming and this was clearly demonstrated by the omission of the Minister for Agriculture in the economic task force. What has happened since the beginning of this year has been a recipe for economic disaster for agriculture. Inflation has risen by 4 per cent because of the provisions in the budget and farming costs have risen by £60 million. Interest rates have increased by 2½ per cent, thereby increasing farming costs by another £35 million. The 1983 budget has cost Irish farmers a very considerable amount.

In addition to this there have been the disastrous EEC price proposals and the long delay in implementing this year's price package without a word of protest from our Minister for Agriculture. The Government have withdrawn their objection to the fact that there are 90,000 tonnes of New Zealand butter in the declining UK market. No protest was made by our Minister for Agriculture in the EEC negotiations. The dairy market has been left in a very unsatisfactory situation and Bord Bainne have dropped the price of milk by 1p per gallon to the Irish farmer. The New Zealand deal with the UK is costing the EEC £80 million per year. It is destroying our dairy exports. Meat factories are closing at a rapid rate because of the failure of the Government to deal with the UK variable premium.

[516] The suspension of the farm modernisation scheme has ended development work on Irish farms. What the Government have done is contrary to the Treaty of Rome. By their actions the Government have undermined the confidence of farmers in the future of the industry and this will delay national economic recovery. Under Directive 159 the suspension of the farm modernisation scheme is contrary to the terms of the Treaty of Rome and I understand the Commission have written to the Government asking for reasons why the scheme was suspended. I hope that the scheme will be restored as soon as possible and I should like the Minister to clarify the position when he is replying. The action of the Minister for Finance in suspending the farm modernisation scheme will put the Minister for Agriculture at a disadvantage when he is negotiating prices, when it will be seen that our Government have not the political will to provide the necessary capital to invest in agriculture. Because of the action of the Government, the Minister for Agriculture will be at a complete disadvantage when negotiations take place on the price review.

The Minister has adopted a very lukewarm approach to agriculture and has shown a complete lack of understanding for the farming community. No budget in the past 20 years devoted so little attention to agriculture which is our primary productive industry with low import requirements and a high export content. We all appreciate the unique and important role of agriculture in our economy. That has been stated over and over again. It needs to be emphasised now because there is so little incentive by the Minister or the Government to improve farming conditions.

Agriculture affects everyone not only those living on the land. When it is on an upward trend so is the whole economy. Approximately 40 per cent of the total labour force are employed in agriculture, directly or indirectly. This sector accounted for 14 per cent of gross national output in 1982. The figure for Great Britain was 2 per cent and for the EEC as a whole the average was 2 per cent. Agricultural based products represented [517] one-third of all our exports last year. Farm exports are four times as beneficial to the economy as industrial exports in terms of the balance of payments.

This industry, which is the very bed rock of the economy, was safely nursed through the appalling world recession of 1979 and 1980 by a caring Fianna Fáil Minister for Agriculture and Government. Our concern and attention at that time, coupled with the well known resilience of the farming community, ensured that no permanent damage was done by the adverse provisions that prevailed. At the end of 1982 there were definite signs that farming was emerging from the depths of the recession which had plagued it during the previous three years. For the first time since 1975 there was a real increase in farming. The Brussels price settlement won by the Minister for Agriculture in 1982, Deputy Lenihan, contributed materially to that improvement. That price package was the single largest increase we achieved since we joined the EEC in 1973.

The growth of agriculture is vitally important to the growth of the economy as a whole. There must be a continuous policy of achieving the highest possible contribution from agriculture to economic growth. A number of schemes have operated to help farm development and improve efficiency. We had the land drainage scheme, farm buildings under the farm organisation scheme, the western drainage scheme, the group fodder scheme and the scheme for machinery purchased in the west. Many of these have now been suspended by the Government. Why are this uncaring Government belittling agriculture? Why are they prepared to see agriculture reeling back from the stage of development it had reached over the past 20 years?

Through the years the State accepted the need for investment in the promotion of better farming and the adoption of better farm practices. Every effort was made to bring home to farmers and farm organisations the need for education, training and participation in advisory work and the need to adopt good farming practices and techniques which have been [518] proved by research.

Contrast that with what is happening now. Contributions to agriculture have been decreased, grant aid to farmers has been reduced and there are reductions in the State grant to ACOT. They were directed to phase out the service provided in relation to poultry keeping, farm home management and the horticultural advisory service. Expenditure on these services was very small. They were necessary services particularly for small farmers in isolated areas. Fine Gael during the last election campaign gave a commitment that these services would be fully restored. The Fine Gael document and their plan for agriculture makes sorry reading now when one contrasts their proposals for the development of agriculture with the budget which belittles the contributions farmers could make to the development of the economy.

The agricultural advisory services operated by ACOT, and heretofore operated by the county committees of agriculture, were badly needed for the development of agriculture. They helped to develop agriculture and encouraged self-reliance among the people of rural Ireland. After the setback in farming since 1979, the stimulation of self-reliance was never more important than it is today. The services of the advisory section of ACOT have seen great changes. In the early days, personnel were thin on the ground but they expanded during the fifties and sixties. During that period, farmers moved from a subsistence level to a more business-like approach. Many rural organisations were formed and there was great demand for various services, such as classes and farm visits. They were readily given at all hours of the day and, often, late at night.

It is important to note how the development of these services has benefited agriculture and farmers down through the years. During the seventies, the advisory service operated the EEC schemes such as the farm modernisation scheme and the scheme of vocational training in the 100-hour courses. Unfortunately, in recent years, there has been a tendency to belittle agriculture and, since 1979, agricultural income has not [519] kept pace with inflation or the cost of living. This has been due to reasons outside farmers' control. In 1982 farm income per labour unit on full-time farms was only 50 per cent of the wage of the average industrial worker. There is a great need for farmers' incomes to be readjusted. To do this the advisory services, as operated under ACOT, have an important role to play. In the present economic climate, the farmer must be convinced that he will benefit if he succeeds in increasing productivity and improving the quality of his output. For that reason, the agricultural advisory service is not merely concerned with a technical problem but also with economic and social aspects as well as farm economics for individual farmers.

Experience has shown, over the past 40 or 50 years, that advisory and agricultural work go hand in hand. Advisory work must rest on a proper foundation to ensure that farmers understand technical and economic advice given to them, hence the need for class work and the various courses operated throughout the country. Advisory work has a close link with research. The relationship between advisers and the Agricultural Institute has always been good and any new information is brought quickly to the farmer. I emphasise that this advisory service must have the confidence of farmers. This can be brought about by giving the aids and supporting the service which is so necessary in the present economic climate. Confidence can only be instilled by improving the service of the advisory section of ACOT. They have a very important role to play in the developing of agriculture, and, ultimately, in improving the economic services. These services proved their worth in meeting the various challenges which arose over the past few decades. In the present economic climate it is even more important that these services ensure that agriculture moves again. When agriculture develops, the whole economy develops. Therefore, it is regrettable that the grant to ACOT should be cut at a time when advisory services were never needed more, especially since it was emphasised by Fine [520] Gael prior to the election that they would restore the services and would actually increase them. I leave it to the farmers to judge for themselves the contribution by the Government to the development of agriculture.

The potential for a significant and sustained increase in agricultural output, exports and incomes, is very real and agricultural development is the basis for that. The support of Fianna Fáil for this industry over the years had created that important potential. Those policies provided the investment needed to build up the infrastructure of agriculture to a level where its full potential could be realised. Fianna Fáil Governments, over the years, gave hope to the people on the land and especially to those employed in our food processing industries and many of the farm input industries, which are now closing down daily. My colleagues, Deputy Byrne and Deputy Kitt, will emphasise how we have implemented our policies to support and substantiate the food processing and farm input industries.

The policy of this Government and their attitude to agriculture stand out in striking contrast to our approach to the development of agriculture. There is widespread depression among farmers today because the withdrawing of the farm modernisation scheme has put a halt to the development of the greatest single productive source of the nation. In this denial not only to the farmers but to the national coffers of the funds that flow from the EEC under this scheme the approach of the Government is unforgiveable, particularly at this time. The farmers are outraged at this approach. I appeal that the Minister for Agriculture, if he has the interests of the farming community and of agriculture at heart, will restore immediately the farm modernisation scheme not alone for its benefit to agriculture but more particularly for its benefit to the country as a whole because of the funds that will flow to the Exchequer from EEC resources.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  : Deputy, you have five minutes.

[521]Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): As if this was not enough, further disincentives to increasing output and incomes are being introduced the most penal of which is the imposition of charges on farmers for ACOT and Department of Agriculture services which have always been available to them free of charge. Contrast that with the Department of the Environment where local government inspectors will come out and examine and inspect houses for house improvement grants or new house grants. Is there a charge in that case? No.

Mr. H. Byrne: Information on Hugh Byrne  Zoom on Hugh Byrne  : Not yet.

Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): Why must agriculture bear the brunt of these charges? Why should the farm modernisation scheme bear the brunt of them? I am putting those questions to the Minister for Agriculture and I hope he will answer them in his reply.

The withdrawing of £2 million from the national interest subsidy scheme for non-development farmers, the restriction of the scheme to those in severe financial difficulties and also the reduction in the moneys being provided for the disease eradication scheme, not to speak of the impact on inflation of the overall budget strategy, all constitute a savage attack on agriculture which is not really surprising when on takes into account the history or, to be more explicit, the composition of this Government. A stop-go situation such as we have now is the death knell of farming initiative. The danger is that these severe blows will be at least as damaging to farming confidence as they will be to farming income. This Government are two parties cobbled together and they have manifested their weakness and self-contradiction in the disastrous budget introduced by the Minister for Finance who was formerly fearlessly on the farmers' side. Contrast that with our approach. We have never had any backtracking or stop-go policies for agriculture. We believed in sound, well-thought-out policy measures in close consultation with the grassroots and we pursued those measures vigorously and [522] steadfastly not alone at home but also in Europe. We never suppressed any positive proposals from the agricultural sector and we were proud to present our policies to the public in our document The Way Forward. I suggest that the Minister and his Ministers of State read our policies with regard to the development of agriculture in The Way Forward. A Leas-Cheann Comhairle, I take it I have another minute.

An Leas-Cheann Comhairle: Information on John J. Ryan  Zoom on John J. Ryan  : You have two minutes.

Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): Finally, I ask the Minister what has happened to the working party set up by the former Minister for Agriculture, Deputy Lenihan, to consider the four-year development for agriculture. What is to be the outcome of their deliberations? How soon will their proposals be implemented? Their proposals would mean so much for the development of agriculture and for the whole economy. Again are we to have the approach of belittling agriculture by this Government who cannot make up their minds as to what their approach to agriculture should be?

I re-emphasise the importance of the role that agriculture will play. I put to the Minister that his approach should be positive. I hope that after this motion which will be put to the House tomorrow the Minister and the Government will see the light of day with regard to agriculture.

Minister for Agriculture (Mr. Deasy): Information on Austin Deasy  Zoom on Austin Deasy  : I move amendment No. 1:

To delete all words after “Dáil Éireann” and substitute:

“supports the measures being taken by the Government within the limits imposed by budgetary constraints, to provide the economic conditions in which the agricultural industry can increase output and farmers' incomes will be raised.”

I would first of all like to outline very briefly the background against which certain modifications were introduced to the schemes, particularly the farm modernisation [523] scheme, which implemented the EEC structural directives. The Government, in framing their budgetary policy were faced with an opening Exchequer requirement of some IR£2,232 million, made up of an opening current deficit of IR£1,209 million and a capital borrowing requirement of IR£1,023 million. Given the magnitude of this figure, particularly in relation to the country's gross national product, the Government's room for manoeuvre in framing their budgetary strategy for 1983 was extremely limited. Since a major reduction in Exchequer borrowing was necessary in order to bring our total borrowing requirement back to a more acceptable level, taxation increases and major cuts in expenditure were unavoidable. Deputies will be aware that cuts in expenditure were made in both current spending and capital expenditure and, given the size of the gap to be filled, it would be unrealistic to think that spending in agriculture could escape untouched.

The difference between a politician and a hurler on the ditch is that a politician must face reality whereas a hurler on the ditch is living in a world of fantasy, and that appears to be Deputy Noonan's world. We must face up to reality, especially in Government. The figures which I have just quoted tell their own tale. I would like to point out to Members of the House that our current budget deficit is estimated to be in the region of £850 million and Fianna Fáil's proposed budget deficit as illustrated some months ago would have been in the region of £750 million which would have meant that had they remained in office their budgetary proposals would have been far more austere than ours. Maybe they would like to tell us what they would have done.

Mr. H. Byrne: Information on Hugh Byrne  Zoom on Hugh Byrne  : The Minister has a chance to tell us now.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  : Perhaps they would like to tell us what they would have done considering they would have had £100 million less to spend. Deputy Byrne has seen what we intend doing. We have put [524] it down in black and white, we have spelt it out. There is no problem there. Nevertheless, I must point out that on the non-capital side the total amount made available for expenditure on agriculture by the Government in 1983 represented an increase over expenditure in 1982. I should also point out that the reductions in ACOT staff servicing farm home management, poultry advisory and amenity horticulture which were envisaged by the previous administration have been substantially eased and reduced by the Government. Deputy Noonan made great play of the fact that there was a cutback in advisory services. Does he know that in the original Fianna Fáil proposals as outlined in their Book of Estimates for 1982 it was proposed to lay off 141 of these instructors and instructresses? We have reduced the number of redundancies in those services to 57.

Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): None of those was let go.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  : We have reduced that number to 57. The Fianna Fáil proposal was for 141. We are all aware that there is a crisis of morale within our agricultural advisory services. It is not too easy to define the reasons for this. It has been represented to me on several occasions that there should be a complete revision of the form of farm advisory services and this is a matter to which I am giving considerable consideration. It may be that Mr. Mark Clinton's original proposal to amalgamate the agricultural institute, An Foras Talúntais, with the ACOT advisory services would have been the best and most useful remedy as regards our advisory services. However, when Fianna Fáil took over office in 1977 they disbanded the National Agricultural Council which Mr. Clinton had set up. One of the people who opposed that National Agricultural Council, a very eminent agriculturalist, was Dr. Tom Walsh who recently retired as Director of ACOT. He admitted that a mistake had been made and that the original national council should have been retained in its entirety.

I do not know if it is too late to redress [525] that situation, but it is worthy of consideration and I am certainly considering it. We must do something definite to rectify the situation of the crisis in morale within the advisory services. It is not a happy position and is not doing farming any good. To rectify the situation might not cost money at all, perhaps it is a matter of reorganisation. That is something which I shall consider.

I know where Fianna Fáil would have found the other £100 million. Deputy Noonan has stated that the budgetary proposal is costing agriculture £146 million. This was not quantified. I would like to see it quantified. My estimation would be a tiny fraction of that suggested figure.

Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): It will be quantified for the Minister next week. We will leave that matter until next week.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  : Deputy Noonan is the person who mentioned it and he did not quantify it. Previously, Fianna Fáil in order to get money put levies on farm produce or farming commodities, such as the infamous 2 per cent levy introduced several years ago, which had to be abandoned, such was the odium it generated in agricultural circles. On this occasion we desisted from imposing any such penal levies and have gained the eternal gratitude of the farming community for doing just that. People knew that cuts had to be made. They were made in education, in health, in social welfare, in industry and also in agriculture. Agriculture has fared reasonably well, considering the magnitude of the overall cuts.

None of us is happy to have to make cuts in our Departments, but I endeavoured to do what I considered was the most palatable thing possible and I will take any blame which may be and which has been apportioned. I took the decision to cut back on grants on the basis that people who are doing their job reasonably well could get by. Levies would have been a form of taxation which would not depend on a person's income. They would not at all be helpful to people who were increasing production.

This then was the background to the modification to the structural measures. [526] The basic objective of the changes was to save money. However, the Government were also mindful of the need to review the operation of the farm modernisation scheme which has been in operation for some eight years and which has been the principal means of channelling aid for farm development.

Might I say that when schemes are brought in they are not brought in to last for ever. They are brought in to satisfy a certain need. We have become used to having schemes which we think will last from here to eternity and that should not be the concept. A scheme should be brought in for whatever length of time it can prove useful. On this occasion, we feel that we have derived a lot of productivity from the farm modernisation scheme. We have suspended a portion of it and a percentage of that portion we intend to bring back in the autumn. However, the part which we will bring back will be strictly geared to productivity, not just to any activity. In these eight years, over £230 million has been paid in aid under the scheme, representing a total investment of about £700 million. Buildings and fixed assets accounted for £165 million in aid, representing an investment of £550 million. These are very large sums of money and it is appropriate at this stage to look at the operation of the scheme and to ask a number of questions, such as whether we have got the best value for the money spent, or whether better results might not have been obtained in another way and perhaps at somewhat less cost, and whether the capital expenditure made was adequately justified by the current stage of the development of agriculture and by the increases in output achieved. These are questions which require careful study and the recent changes in the farm modernisation scheme give an opportunity to carry out a fundamental review of the scheme to see if we can come up with some answers to these questions and devise a scheme which will give the best possible value for money.

At this stage I would like to refer to some of the points made by Deputy Noonan. He berates me for not stopping the importation of New Zealand butter. [527] The agreement in the current year is for the importation of 87,000 tonnes of New Zealand butter into Britain. Why berate me? Deputy Lenihan, who was then Minister, made that agreement. When I was on the Opposition benches I suggested to him on numerous occasions that he should not be so generous and that was even before he made the agreement. He made the agreement that the Deputy is complaining about.

Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): But you are now Minister.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  : I do not break agreements, even if they are made by another Government. Our standing, internationally and nationally, would be zero and that is why I said originally that politicians have to deal with reality, not fantasy. One must stick to an agreement. We allowed the agreement to go through piecemeal in Brussels until such time as the British and the Germans relented regarding the sale of butter from the EEC third countries. Last week, when they finally accepted our terms, we let the agreement go ahead as had been promised. I do not think anybody, even the Opposition, would like us to do otherwise. This year we will be fighting for a new agreement and, hopefully, the terms will be better.

When the terms of accession were agreed in 1952, Fianna Fáil were in power. They agreed to allow the importation of butter from New Zealand, the only country which got that concession, and our dairy farmers have paid very dearly for that agreement ever since.

Deputy Noonan mentioned the variable premium which has given rise to problems in our meat factories. He wanted to know why we did not abolish it. I want to know why Fianna Fáil did not abolish it. This premium has been in existence for many years. It will not be a great advantage to Irish farmers if the variable premium is abolished because we get generous concessions on exporting meat and live cattle to Britain. Deputy Noonan apparently is confused. What we want is a clawback on the exports of beef from Britain to other countries, including [528] EEC countries and third countries. At present the British have an unfair advantage on the export markets vis-á-vis their Irish counterparts and many of our meat factories are in trouble. We are well aware of this and have been fighting most assiduously in Brussels for the past five or six weeks.

This is one of the few concessions Britain is looking for at the talks going on in Brussels at present, although we are looking for a number of concessions, including a general price increase. The higher the better. The British do not want an increase; they want a reduction in prices. We want a series of special measures but this is the only one they want. We will fight them to the bitter end and will take the matter up at the Council of Ministers and do our best to see equity is restored in the meat export business.

We have been in Government three months and the people expect us to work wonders. That variable premium has been there for years and I might ask why did the Fianna Fáil Government not get rid of it. They had more opportunities than I had.

One aspect we shall be looking at as regards the farm modernisation scheme is whether there might be something to be gained from aiding farm investment by way of interest subsidies. Traditionally we have provided farm capital aids as grants. Most of our European partners adopt the approach of providing the equivalent capital grant in the form of an interest subsidy over 15 or 20 years. I would like to hear the considered views of the farming organisations and others concerned on the merits of the interest subsidy scheme.

We now have some experience of interest subsidy schemes in this country as a result of the national and EEC supported 5 per cent interest subsidy schemes and also the reduced interest schemes for farmers in severe financial difficulty, better known as the rescue package. It appears that these are working fairly well and the experience of them suggests that we should examine critically the possibility of their wider adoption as a substitute for the more traditional system of grant aid.

[529] The Irish and the British are the only two countries which operate grant and subsidy schemes directly aiding farmers. The other EEC countries adopt the interest subsidy method. It is a bone of contention as to whether we should transfer to that kind of system rather than direct grant aid. With the interest subsidy it would mean a person would be interested in recouping the money over a number of years, and it would cost the Exchequer less if this were spread over many years and might give us more room to manoeuvre. This is an idea worth investigating. I am not asking only the farming organisations for their comments; if the Opposition have any views I would like to hear them.

Deputy Noonan alleged that we were being severely censured by the EEC for having suspended portion of the farm modernisation scheme. I do not know where he got that information. He may have seen it in a newspaper, but we all know you cannot believe everything you read in a newspaper. We have heard no objection from the EEC regarding the suspension of portion of the farm modernisation scheme. In fact, we informed them of what we had done and there was no reaction.

Mr. Noonan: Information on Michael J. Noonan  Zoom on Michael J. Noonan  (Limerick West): Does the Minister deny that?

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  : Yes.

Mr. Kitt: Information on Michael P. Kitt  Zoom on Michael P. Kitt  : It saves money.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  : Whatever the reason we have had no reaction. Directive 159, on which the farm modernisation scheme is based, applies only to the development category in a mandatory way and the EEC probably do not regard it as being their business.

I would like now to turn to details of the modifications to the farm modernisation scheme. The single most important change was the suspension of aids for investment in farm buildings and fixed assets. First, let me emphasise that what is at issue here is a temporary cessation of these aids. We have not determined [530] exactly how long the suspension will last but the intention is that a revised investment scheme would be reintroduced at the earliest possible date, probably in the late autumn.

Mr. H. Byrne: Information on Hugh Byrne  Zoom on Hugh Byrne  : Will it be later than that?

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  : As Deputy Brian Lenihan might say, we would like to introduce it in the very near immediate future, but when we say late autumn we hope to stick to that date.

Mr. H. Byrne: Information on Hugh Byrne  Zoom on Hugh Byrne  : It is only a hope?

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  : Yes, it is a hope.

Mr. H. Byrne: Information on Hugh Byrne  Zoom on Hugh Byrne  : Is the Minister giving a definite commitment?

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  : I never give a definite commitment in politics because it is a very dangerous thing to do.

The interval is being used to carry out the review, which I mentioned earlier, of the whole area of farm investment aids with a view to devising measures which will be cost effective and will operate in the most productive and efficient manner. This review is already under way and I shall see to it that it is concluded as quickly as possible so that no delay will take place in bringing in the revised scheme of aids.

Secondly, as I have said, the suspension applies only to buildings and fixed assets under the farm modernisation scheme. Investment aids in land improvement will continue under the farm modernisation scheme and also under the western measures, that is the western drainage scheme and the programme for western development. In addition, aids will continue to be made available under the latter programme for investment in farm buildings by farmers who follow an improvement plan geared towards expanding production of beef and sheep. An interest subsidy will also be available to those farmers who enter a calf-to-beef system. These aids for western farmers following improvement plans have not received the response they deserve and I would urge any farmer in the western [531] region to check with ACOT if he can avail of this scheme. I would be concerned that the grants when reviewed fully in respect of those areas that are to be reviewed would apply to the housing of livestock, an area that is in need of much greater investment whereby the production of better quality animals can be assisted.

In implementing the suspension of building aids, we will honour approvals issued by the farm development service up to 9 February of this year. It has been suggested to me that we should also make an exception for those farmers who had submitted applications which had not progressed to the stage of having approvals issued. It is a point of view with which I have some sympathy but the hard facts are that, if we adopted this approach we would not achieve the savings of £10.3 million we wish to achieve as quickly and the suspension of the scheme would be substantially prolonged. In these circumstances, I feel that it is better to bring back the building aids as soon as possible even if that means that the suspension while it lasts is that much more severe.

I should like to be able to sanction all those applications that were received before 9 February but to do so would result in the cutbacks not having the desired effect. To have sanctioned all these applications would have involved an additional cost of £8,500,000. I should like the people opposite to realise that the situation is not as easy as it is often represented to be by people who did apply. If this additional £8,500,000 were to be sanctioned, £5,500,000 of it would have to be paid out in the present year. In other words, approximately half the targeted savings would not be effected. I have the greatest sympathy for people who applied prior to 9 February but whose applications have not been approved. I refer especially to those who had applied some months earlier. I have asked my Department to investigate the possibility of allowing some of those people to qualify but I am told that if I were to apply the deadline as and from 1 January 1983 we would still have to pay out about £3 million extra in the current [532] year. However, if any Deputy knows of a case which represents a real neglect on the part of the farm development services, he should bring it to my notice. I would be prepared in such circumstances to consider some exceptional treatment because if the situation is due to neglect on the part of someone along the line, there must be grounds for sympathetic consideration. Any application that was in in excess of six months but was not approved should be given definite consideration.

Mr. H. Byrne: Information on Hugh Byrne  Zoom on Hugh Byrne  : That is not enough.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  : The more one gives some people the more they want and the Deputy seems to be one of those.

Mr. H. Byrne: Information on Hugh Byrne  Zoom on Hugh Byrne  : I never say no.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  : To turn now to the other modifications. Grant aid for keeping farm accounts has been terminated. We feel that aid from public funds for this purpose is no longer required to the same degree because farmers are by now well aware of the benefits to good farm management of keeping accounts. The termination of aids will affect only new entrants to the accounts system. Commitments to farmers who are already in the system will be honoured in full.

The system of guidance premiums for development farmers, which has been terminated has not been a great success — only about 1,000 farmers have availed of it in the past eight years. Only new entrants to the development category will be affected. Commitments to existing development farmers will be honoured in full.

Grants for mobile equipment, which have been terminated, were available only to development farmers. These grants were of doubtful benefit to most development farmers. The rate of grant was low, only 10 per cent, and can scarcely have been a significant factor in a farmer's decision to invest in equipment.

The group fodder scheme has been in operation for six years and has by and large achieved its aim.

[533] On the non-capital side we have introduced a system of charges for farm visits by FDS and ACOT staff and we have modified the national interest subsidy scheme. The charge for farm visits will apply only to visits in connection with the farm modernisation scheme. There was a lot of confusion about this system when introduced. Many people thought the charges applied to any visit, even in an advisory capacity, but they apply only in connection with the farm modernisation scheme.

Mr. H. Byrne: Information on Hugh Byrne  Zoom on Hugh Byrne  : Six or seven visits per project.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  : That would be a matter for the farmer but on average we are thinking in terms of two visits.

Mr. H. Byrne: Information on Hugh Byrne  Zoom on Hugh Byrne  : In other words, get the approval and then drain the land and everything will be all right.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  : It will not apply to normal advisory visits, nor will it apply to visits in connection with the western drainage scheme or the western package. The rate will be £20 per visit and it will be implemented by way of deduction from capital grants due under the scheme. The objective is to effect savings in the administration of the scheme. The charge of £20 does not fully reflect the actual cost involved in a farm visit and taking account of the valuable service which both FDS staff and ACOT personnel give to farmers, it represents value for money.

On the national interest subsidy scheme, interest rates have declined sharply in the recent past, apart from the fluctuations of recent days, and the need for the scheme is not so great. Accordingly the Government decided that the subsidy would be limited to one year only. However, we have recognised that farmers in severe financial difficulty are a special case and we have arranged that those who benefit from the rescue package will be entitled to aid under the national interest subsidy scheme for up to two years.

These then are the changes we have [534] made in aids for farm development. I accept that in the short term these changes may be painful but farmers cannot expect to escape from expenditure cuts when all other major sectors have suffered some pruning. We might spare a thought for the Minister for Education, for instance. In the longer term, however, it would be my hope that the revised scheme, when introduced, will make better use of the limited resources available and thus make a contribution to the development of agriculture.

Mr. H. Byrne: Information on Hugh Byrne  Zoom on Hugh Byrne  : I rise to support the motion calling on the Government to restore the funds recently withdrawn in respect of aids and services for farm development and to lift the suspension of the farm modernisation scheme. The Government must recognise the role of farming in the economy but so far there is no evidence of any such recognition on their part. Fine Gael particularly have massive support from the farming community but they fail to realise that agriculture is the backbone of our economy and will continue to be so for a long time to come. On each occasion on which a Coalition have been in power we have had evidence of a lack of recognition of this fact. There was a big downturn in agriculture during their term in office from 1973 on, and on the last occasion when they were in Government for only six months they decreased the grants by 5 per cent and showed a general disinterest in agriculture.

The Minister has made great play of having been in office for only three months but in that short time he has done a lot of harm to agriculture. Regarding the amendment that has been put forward by the Government to this motion, I do not know of any measure brought forward by them in the past three months that would help agriculture and neither is there evidence of any such measure in the Minister's speech this evening. I should be anxious to hear from one of the junior Ministers perhaps as to what those measures are. Unfortunately, though, we all know that the Government have not taken any measures in this area. In Wexford we have three Deputies [535] who claim to be farmers. I have attended public meetings with them before and since the election. Their attitude is that the proposals now being put forward by the Government are——

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  : Would the Deputy please move the adjournment of the debate?

Debate adjourned.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  : As arranged, the House will sit not later than 9.30 p.m. to enable statements, not exceeding 15 minutes in each case, to be made by a spokesman from each of the parties in Opposition on the situation in relation to the realignment of currencies in the EMS and to allow a concluding statement, not exceeding 15 minutes, from the Minister for Finance.

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