Seanad Éireann - Volume 93 - 05 December, 1979

Adjournment Matter. - Farm Improvements Grants.

An Leas-Chathaoirleach: Senator O'Brien has given notice of his desire to raise a matter of importance on the Adjournment.

Mr. O'Brien: I suggest that Senator Connaughton get not less than ten minutes of the half hour available.

An Leas-Chathaoirleach: The Senator has 20 minutes.

Mr. Brennan: May I intervene to say that we will be sitting on Thursday, 13 December, at 2.30 p.m.?

Mr. O'Brien: I propose to deal with [514] this motion under two headings, grants in respect of farm buildings which are applicable to the whole country and drainage grants applicable to the 12 western counties. Until Monday of this week, grants payable on farm buildings were based on a scale of costings that had been in operation on 1 June 1978, and in that 18 months there were very high increases in the cost of building materials and wages, and the costings that were made on a particular building job in 1978 became irrelevant by the time the job was completed and meant that the grant fell to about 25 per cent of the cost. The grant is not giving the same assistance to people to erect farm buildings or to improve concrete farmyards as was originally intended. In a case of which I know, £5,000 was the cost estimated for the erection of a silage pit, but with the increase in costs the 30 per cent grant represented only about 25 per cent of the cost incurred. There had been a long period of 18 months without an adjustment in the costings, and during that time, with rapid inflation, a great increase in the cost of building materials and an increase in wages, an adjustment should have been much earlier.

Senator McCartin, who would have been speaking on this motion but has a commitment in Europe, has figures to show that grant payments made amount to 23 or 24 per cent of the total cost of the work done, thus falling considerably short of the 30 per cent intended.

The costing scheme for drainage work in operation was drawn up on 1 January of this year and because of an increase in the cost of diesel oil, an increase in the cost of plastic pipes and in wages, the amount allowed in grants is falling short of the 70 per cent which was the amount fixed to assist drainage in the 12 western counties. Because of that, the grants are falling below 60 per cent of the total cost of the work done.

My principal objective in having this motion discussed is to emphasise the need for a more regular adjustment in the costings so that farmers will be enabled to keep pace with the increase in the cost of the job. If it goes for a period of 18 months without review, as it did in [515] the case of costings on farm buildings, it becomes obvious that the grants are not giving the percentage assistance that they were intended to give at the outset. With regard to the drainage grants, I know of one farm of 22 acres where the grant fell short by about £80 an acre because of the increase in costs. Another one in County Cavan, a farm of ten acres, was drained and the farmer concerned assures me that it fell about 78.5 per cent short. Another point that is causing some annoyance amongst applicants for these grants is the delay in paying the grant. This is a matter of great annoyance to the farming community at a time when credit, if it can be got at all, is very costly and very difficult to get. The contractors naturally are pressing for payment of the money as early as possible. It does not do the scheme any good if there are unnecessary delays.

With regard to the drainage scheme itself, in my own county of Cavan it was slow getting off the ground in the early stages but I am glad to say that there is an improvement in recent months. Figures that I have indicate that in County Cavan there are 799 applicants for grants under the drainage scheme, that will cover a total of 4,270 hectares and that up to date work on 768 hectares has been completed. That is a reasonable rate of progress for a scheme that is not so long under way but that progress will have to be speeded up if the number of people who have already applied are to have any hope of having their work done inside the next five years. We could not take that as a satisfactory rate of progress. I understand, too, that applications from all of the 12 counties in the western area would cover 36,440 hectares and that about one eighth of that acreage is already covered. It is said that the work is held up in some areas because of shortage of staff. I have here a report in the Leitrim Observer which draws attention to the slow rate of progress in that county, as stated by an official of the IFA at a public meeting. It is reported in the Leitrim Observer dated 1 December 1979. The report says:

[516] The operation of the scheme, which is a joint EEC/Irish Government venture, has been the subject of much criticism from various agricultural sources throughout the county.

It goes on to say:

Many farmers who made applications some six months ago had heard nothing since. This is only one of the problems the applicants have run into.

It says, too, in the report that:

...up to 31 October, of the five year scheme there has only been 155 acres of land drained in Leitrim.

That could not be considered satisfactory.

Another point that causes a certain amount of annoyance amongst applicants for this scheme is that they are not told exactly what the agricultural officer bases his figures on. This IFA spokesman, speaking in Leitrim, on this matter drew attention to this very point and said:

At a meeting in Cloone last spring the Minister for State at the Department of Agriculture, Mr. Tom Hussey, stated that farmers could see the costings being used to price their work but the Department officials say their costings cannot be shown to the farmer, as they are private and confidential.

An Leas-Chathaoirleach: Would the Senator tell us the source of the quotation, please?

Mr. O'Brien: The source is the Leitrim Observer dated 1 December 1979. These remarks were made by an officer of the IFA. That, in brief, is my case. The principal point I would like to make is that the scale of costings at a time of rising costs should be revised at shorter intervals.

Mr. Connaughton: I am glad to be given this opportunity to say a few words about the costings generally. I bring to your notice that in regard to the ten minutes at my disposal, I will be asking [517] for a few minutes injury time to be added on because we did not start at exactly 8 o'clock but a few minutes afterwards.

An Leas-Chathaoirleach: The House must adjourn at 8.30 and the Minister must have ten minutes.

Mr. Connaughton: That leaves very little time for me. I give less than a guarded welcome to the increase in the estimated costs for farm buildings. There was not any mention of land drainage at all in the recent announcements. I have been told that this particular costing has been increased by about 12 per cent. I ask the Minister to tell the House what exactly the percentage increase was. Does he realise the enormous increase in building costs since the 1 June 1978?

Is it not true that a slatted house to house about 50 cattle could easily be built for about £150 per head or a total of £7,500 in June 1978, and now, eighteen months later, the same house for the same number of cattle would cost at least £225 per head or well over £11,000. That is an increase of £3,500 or a whopping 46 per cent. That particular increase would be insignificant with a figure of, say, 12 per cent or a figure near that that might attract the increase that has been granted. I suggest to the Minister that if the EEC will not accept responsibility for those dramatic increases in building costs would he not get the Department of Finance to give an immediate subvention to keep grants in pace with inflation and rising costs in construction?

A gesture of this type, I am certain, would partly promote confidence in agriculture. We have falling cattle prices, soaring interest rates, a general gloom over agriculture particularly in the small farming areas and added to this the difference between the actual cost of doing a job for farm buildings and the grant one is entitled to get while that big gap begins to widen. It will not do a lot for the confidence of Irish farmers. We know that buildings by their very nature are very slow to pay their way, as any [518] fixed assets would be. We only have to look at the price rises in ready-mix concrete, cement, sand, iron, work and wages.

Who was responsible for accepting the latest estimate costs? Was it accepted by the Minister and his Department? Was it imposed on us by Brussels? Why are the grants not paid promptly? I do not want to be given the answer that it was because of the postal strike. They are still just as slow, as far as I am aware. There is not a day of the week that we are not trying to get a grant for some of our constituents. I see no reason once the area officer passes a particular job why the grant would not be in the farmer's hand inside a couple of weeks. That is certainly not the rule at the moment. Is there a bias against the grants for slatted houses? I heard murmurings in the last couple of weeks from farmers that the estimated costs in relation to slatted houses have been pegged down and that the estimated costs for other building activities in fact have been allowed to come upwards with the present increase. I want to know if this is true and, if so, why?

I will address myself for the few moments at my disposal to the western drainage scheme. As we all know this was heralded 12 months ago as the saviour of the west. I still have my doubts as to who will be saved and who will not as far as that is concerned. The estimated costs were published in January 1979 and there was no increase whatever since. We get 70 per cent of the total cost, to a maximum of £220 an acre. I have calculated from several farmers that that 70 per cent is, in fact, 50 per cent of the total cost. Why was the ceiling on the £220 not increased? Does the Minister not realise the problem of stubborn heavy land with scrub, rock and bushes? It could not possibly be done for anything like a baseline of £220.

Does the Minister realise the excessive rises in oil prices, wages, the cost of credit even if one could get it? Why do the Department of Agriculture not grant aid to private contractors in the [519] purchase of new drainage machinery? I feel this is a remarkable omission when we consider the vast amount of acres that have to be drained in the west of Ireland. From the involvement of the co-ops at the moment there is no way I can see that they will be able to cover the ground. I cannot understand why we did not put up a better fight and why the Brussels authorities will not grant aid to private contractors, who are the people who did all the drainage and have all the expertise down the years.

It is one of the great tragedies of the western drainage scheme that that particular section have been left out. With the cost of heavy drainage machinery at the moment much of it, in fact, is completely outside the scope of most contractors. If the co-ops were able to do it it would be all right. The co-ops have the money but they have not got the expertise. The Minister must be aware of the fact that people are terribly slow getting involved in drainage schemes. There is a lot of pious talk about it. The man who owned a few JCBs, and had five or six men working for him was the sort of contractor who was handy. He was a neighbour and everybody trusted him. One knew with whom one was working. I cannot understand why the Minister, the Department generally, and Brussels for that matter, had to impose this penal law on our contractors.

Minister for Agriculture (Mr. Gibbons): I am surprised that the Senators should find themselves impelled to raise this matter on the Adjournment. During the course of their contributions they revealed an absolutely astonishing lack of knowledge of the realities in this situation, and possibly if for no other reason the short debate we have been listening to was of use from that point.

I would like to remind the Senators that the amount of actual expenditure on farm modernisation schemes between 1976 and 1979 has risen from £12 million to £44 million. Nobody would seriously challenge the fact that costs are rising rapidly. Most people are aware by [520] now that there has been an acute and continuing fuel crisis that must have a very big effect on the costs of the carrying out of drainage schemes and all other types of schemes. Nevertheless, to hear Senator Connaughton speaking of the payment of a 70 per cent grant in the case of western drainage and describing it as a penal law is departing from anything that could reasonably be called good sense. The same Senator advocated the building throughout the small farm areas in the west of Ireland of the dearest possible form of cattle houses, slatted houses. A far more appropriate type of cattle housing for the smaller farmers would be the kennel system. I do not believe that there is an acute problem with the shooting up of costs in the area of slatted buildings for animals in the west of Ireland. I do not think there can be many cases like that. Even if there were, farmers in the west of Ireland might be well advised not to go into the business of investing in this very costly form of animal housing.

Before January of this year the ordinary level of drainage grants was available in the west as well. Because of representations I made in Brussels this is now 70 per cent. I am currently conducting negotiations for the raising of grants further still and over a wider area in the structural field. That covers a very large spectrum of development measures. In that context it does not seem to add up to the fact that the two Senators should have felt it desirable to raise this small point and to read at great length, as Senator O'Brien did, from the observations of an unnamed IFA man, as reported in the Leitrim Observer, interesting though it was. It has no bearing on the fact that the expenditure on farm development throughout the western counties has been dramatically changed for the better with the arrival of the special west of Ireland drainage scheme. I look forward to the early completion of the negotiations of the second structural package for the west of Ireland. I am aware that there will always be a constant escalation of costs, and, because there is, there will be an attendant review of the costings situation from time to time. That is the situation.

[521] Things have been difficult in farming in the past year. One of the worst winters in memory has passed, and a very bad grass season. This bears particularly heavily on the farmers whose main enterprise is cattle husbandry of one kind or another. This is not to say that the new western development structural funds made available by the European Community as a result of the successful negotiations of the Government and myself is in any way answerable to the description that Senator Connaughton gave of a penal code as if there was something really stringent about it. The payment of a good deal more than two-thirds of the cost of the drainage of particular land is in anybody's estimation a very enviable size of grant and makes the business of land drainage on a fairly extensive scale a truly economic proposition. [522] The difficulty in the budgetary situation within the European Community will be to maintain percentages, as it will be my endeavour to do. To make charges of the kind that have been made by the two Senators is to depart from common sense. I do not think the Seanad should indulge in a great deal of that; it is a very unrewarding practice. I am satisfied that the level of grants is very good and that the incidence of the rise in costings will be subjected to constant review. In general, the prospects are good and may be even better. Therefore, I can see no reason for the despair that is evinced by the Senators in their contributions.

The Seanad adjourned at 8.30 p.m. until 2.30 p.m. on Thursday, 13 December 1979.