Seanad Éireann - Volume 104 - 20 June, 1984

Land Bill, 1984: Committee and Final Stages.

Sections 1 and 2 agreed to.

SECTION 3.

Question proposed: “That section 3 stand part of the Bill.”

Mr. T. Hussey: Perhaps the Minister could give us some indication of what exactly this section means?

Minister of State at the Department of Agriculture (Mr. Connaughton): This is the centrepiece of the Bill in the sense that what is intended is to delete certain aspects of the old legislation relating to leasing in the last century. We want to give a cast-iron guarantee to the owners of land that irrespective of the length of time they have the land actually set to another person, at the end of the period agreed at the time the deal was made the land reverts to the land holder. This is a very important part of this legislation and it is important for me to point out that, contrary to what many people would suggest, this gives absolute protection to the owners of land. Heretofore there was a big question mark in the minds of nearly all Irish farmers as to what would happen if, for one reason or another, they leased their land for more than the 11 month conacre system. That is why that particular system has become so commonplace and it is a system with which everybody disagrees. Under this proposed legislation whatever may be the agreement arrived at between the lessor and lessee, [408] that is exactly what will happen at the end of the lease.

Mr. T. Hussey: May I inquire if the Minister has any definite term of years in mind for the leasing? A period of 12 years has been mentioned as the most popular term for leasing but I would have mixed feelings about that because the 12-year lease might be too long. I would like to inquire if the Minister has set the term of years that will apply under this Bill.

Mr. Ferris: In elaborating on that point, in my opinion the length of time that is involved in the lease is irrelevant. It is a question of whether, in fact, the security of ownership of the owner of land let for more than the present 11-month conacre system is protected in this Bill because from what the Minister said initially that is what he wants to do. The length of time is a matter between the owner of the land and the person who wants to lease it from him, whether it is for a year and a half, or two years, or three, or five, or 12 years. Obviously the longer the lease the better for the person who is leasing it, but provided the ownership of the land is protected the length of the lease is not important and possibly should not be spelled out in the Bill. Could the Minister clarify that?

Mr. Durcan: I think the point raised has a certain validity. It seems to me that despite the enactment of this section the Land Commission still have substantial powers under section 45 of the 1955 Land Act whereby their consent must still be sought and given in relation to any lease which is entered into by any party. If that consent is not applied for and if that consent is not given then the lease is null and void. That is my understanding of how the matter lies. What I am concerned about is what criteria the Land Commission will apply in considering applications to them seeking their permission to lease land. This is the nub of the matter.

It is all very well repealing these provisions which inhibit entering into new leases but the problem is the terms which the Land Commission will themselves impose when allowing people to enter into [409] leases. Ultimately that is a policy decision and ultimately the power there lies with the Government of the day who presumably can allow their policy to be carried out by the Land Commission. I would like to hear the Minister's general comments on that. Secondly, I would like the Minister to assure the House and the country that if this section is passed into law the owners of land will receive a very definite assurance that at the end of the lease period there will be no interference by the Irish Land Commission.

It is important that potential landlords, if I can use that phrase in this context, be assured that at the end of the lease period there will be no danger of a Land Commission inspector coming around and a notice of inspection being slapped on that land and the person, in effect, losing guarantee by roundabout methods. If land leasing is to take off and if the repeals which are specified in this section which remove certain inhibitions are to have their full effect, it is important that those who are likely to lease land be given a guarantee that at the end of the period there is no danger that the Land Commission will move in. I would like to get the Minister's comment on that.

Finally, I want to query whether this ultimately will be a matter for the lay commissioners or a matter for the Land Commission officials. I make that point because I am concerned at certain decisions reached by the lay commissioners in determining other matters. I had experience in my own constituency recently where the lay commissioners have made orders dividing estates between people in a most peculiar and a most haphazard way. I have had a situation where land has been divided and given on order of the lay commissioners to disabled and infirm elderly people and legitimate farmers excluded. I would be worried if that kind of policy on the part of the lay commissioners were to operate in relation to the applying of conditions when they give the consent to lease land.

Mr. Connaughton: First of all, many fundamental questions have arisen in the last few minutes. With your permission, [410] I will give a certain amount of time to them because there are fundamental importance.

In answer to Senator Hussey, there is no such thing as a particular pre-determined length of time as far as any lease is concerned. That is not what we are trying to get at. The spirit behind this Bill is simply that we want to try to get a new type of farming package that is far superior to the 11-month conacre system.

Senator Hussey mentioned a 12-year lease. That terminology was born ten or 12 years ago when we joined the EEC the first time. What happened on that occasion was that it was glibly said around the country that we were going from an 11-month conacre system to a potential 12-year lease situation. As we have all found out, it did not work for a variety of reasons. In my view one of the reasons it did not work was because it was far too long in so far as the mentality of Irish farmers is concerned. I do not have to explain to the House that a farmer who is 60 years of age when leasing his land for 12 years would be 72 when he got it back. He might hesitate to let it go for that length of time.

Senators are well aware that since I got this job I have been trying to promote the idea of a short to medium term lease on the basis that, first of all, half a loaf is better than no bread; secondly, the idea is that once we get people off the 11-month conacre system where this is appropriate, a five, six or seven year lease would be possible. For that reason, there is nothing written into this Bill about the actual length of the lease at all. It is now entirely up to the lessee and the lessor to come to an agreement themselves as to what length of time that would be. This is usually agreed between the two of them. In so far as that is concerned obviously we are not legislating for it.

Another reason why we could not possibly legislate for the length of time is that if you take the tillage areas of this country, they are in effect using a three-year lease as things stand at the moment. but they are three one-year leases because tillage rotation lends itself to that. When you take the grassland areas as such obviously it would have to be [411] much longer than three years before it would be worth the tenant's while to build up fertility and get a return on his money. In the grassland areas it is a personal suggestion of mine that we are talking about five, six, seven years — that type of thing — so that the farmer who is the tenant in this case would have some hope of recouping his money. The bottom line in all this business is that there is a few pounds out of it for him.

To come to Senator Ferris and Senator Durcan, the most important statement that I could make today is that I am giving an absolute guarantee to every Irish land-holder who will decide to enter into agreement on a medium to long-term lease, a bona fide lease as approved by the Irish Land Commission, when that lease has expired the Land Commission will not start proceedings for that land because it has been so registered. That is of vital importance. There are many farmers up and down the country, and particularly elderly farmers, who genuinely believe that once the news goes out that they have actually rented their land on a long-term lease that that is the last they will ever own of it, that by the time the lease is up the Land Commission will serve a section 40 order and will acquire it. I am prepared to go a step further because I appreciate, as much as most would appreciate, that this could be a great deterrent to getting people interested in medium to long-term leasing. I would be prepared to have it written specifically on each approval issued by the Land Commission, on the bona fide leases as approved by the Land Commission. I cannot go any further than that. It is an important message to go from the Seanad today that any land so leased will not attract the attention of the acquisition section of the Land Commission. If there was the smallest doubt that the Land Commission might acquire then the whole concept of leasing as I am promoting it would obviously fall. I cannot be more specific than that on that matter.

The other question I would like to refer to is that the Land Commission themselves at the end of the day will be solely in control of the actual leasing arrangements in the sense that they will have to [412] be approved by the Land Commission. That will give an adequate guarantee to people who ask whether there is any danger that this thing could get out of hand. There is no danger, and the Minister of the day will have the authority to decide what conditions might apply to it at that stage.

Mr. T. Hussey: I am very pleased to know that there is no particular period of time for leasing because a lot of things have been bandied about since this debate started in this House. Periods of five years, ten years and 12 years have been mentioned. I am pleased to hear the Minister say that does not apply and that it will be up to the parties themselves to fix whatever term of years they want to fix for the lease. I think a period of five years might be the most suitable because when it goes beyond that people begin to worry.

The Minister said that he would give a guarantee that the Land Commission would not proceed with the acquisition of any holding involved in this leasing arrangement. I find it very hard to accept that the Minister can give that guarantee because every case is different and there might be a situation where the Land Commission might at some stage have to acquire a particular farm. I find it hard to accept that the Minister can write that guarantee into any leasing arrangement.

The other aspect I would like to raise with the Minister through the Chair is the question of elderly people. We know from our experience of the EEC farm retirement scheme that one of the biggest concerns there was the fact that they lost their social benefits when they became involved in this scheme. They lost their old age pension and they lost their medical cards and many of the other benefits that they would normally be entitled to. At the end of the day they found they would really have been as well off if they had stayed with the old scheme and did not get involved in the farm retirement scheme at all. I would like to ask the Minister if he can give any guarantee to those people now. This is one aspect that he should be harping on if we are to make a success of this scheme, because these [413] are the people whom we are aiming at, the people who are no longer able to work their land and who should be encouraged by whatever means possible to give up that land to younger people who are able to work it and who will make it more productive.

Can the Minister tell us that he will be able to overlook the income from the leasing in assessing their means for old age pensions or medical cards? We have to come down to those basics if we are to make a success of this scheme because if the Minister is not able to do something like that the scheme is not going to be the success that he thinks it will be. The people we are aiming at are people who are no longer able to work their farms, who may be within a year or two of getting the old age pension or who, in fact, may already be receiving the old age pension. Are they going to be hounded by the social welfare officers as people who are in receipt of farmers' dole are at present and is their income from this leasing arrangement going to be assessed against them when they apply for old age pensions or when their means are being assessed for old age pensions?

Mr. Ferris: I want to develop this a little bit further. We got an assurance from the Minister on the Second Reading that the income from land leasing would, of course, be assessed as an income but the actual privilege of the ownership of the land would no longer be taken into account in assessing somebody for social welfare. Perhaps the Minister would like to confirm that. I understand that is the fundamental principle underlying that and it is a very important point raised by Senator Hussey. I am pleased with the Minister's assurances about the fundamental right to ownership and the fact that land which comes into this system will not make it a target in the future. Maybe I am trusting as a Member of the House but if the Minister can give an assurance that it will be written by the Land Commission in each transaction, that should hold as being a proper assurance. I do not think it is possible to have it in legislation. Could the Minister tell [414] me — Senator Durcan raised this point but the Minister did not really elaborate on it — what actual norms are the Land Commission going to use to determine the eligibility of people to qualify for land leasing? Will they consider young, unemployed, rural people, the sons of small farmers, forestry workers and road workers who do not own land and who have no hope at the moment of employment? I know the Land Commission debar people who do not own land. They want to make holdings more economical by making them bigger. Will the Minister in this situation hold that against a young person in a rural area who might like to develop horticulture or some other such enterprise and, if so, is it possible that the enterprise allowance scheme could be applicable to such a person?

We have the scandal of imported vegetables and we have young people who are unemployed and disillusioned because they have nothing to do. Here is a chance, with tremendous job satisfaction, of being able to go into a leasing situation with the approval of the Land Commission and be able to use it productively for their own benefit and that of their local community.

Mr. Lanigan: The Minister said he was giving an absolute guarantee that section 40 would not be brought into effect after a leasing period. I would ask the Minister how can he give an absolute guarantee that the Land Commission will be there in five years time? There is no way that a Minister can come into this House and give an absolute guarantee. I was surprised to hear the Leader of the Labour group saying that the privilege of owning land would not be taken into account when assessing income. We have been told by the Minister for Social Welfare that when assessing—it was called farmers' dole——

Mr. Ferris: For land leasing only.

Mr. Lanigan: The Minister for Social Welfare has stated quite categorically that in all circumstances the ownership of land is to be taken into account when assessing income for social welfare [415] benefits and irrespective of the fact that there might be no stock on that land it will be assessed. It is categorically stated in the Social Welfare Act that the ownership of land, irrespective of the income from the land, has to be taken into account when assessing income even if there is no income. Therefore, in the case of a person who is looking for farmers' dole or unemployment assistance related to farm ownership, the ownership of land is taken into account. I would ask the Minister to say how he can give an absolute guarantee and also to say if there has been a change in Government policy so that the ownership of land is not now being taken into account when assessing income for welfare benefit.

Mr. Durcan: I am a little worried about the Minister's guarantee. I accept the Minister's bona fides with regard to this matter and I know that the Minister's intention, while he is Minister, is to ensure that the policy he has enunciated is carried out but it seems that the power here lies with the Land Commission. My worry is that in the event of an inspection notice being served and in the event of a matter of this nature arising before a Land Commission court, will they take note of any guarantee contained in a letter authorising a lease? I will draw an analogy with this. I am aware of a situation where the Land Commission gave consent to subdivide a holding. To do so, they had full details of the intended purchaser. Six months later the Land Commission themselves served an inspection notice on those lands and subsequently the court of the Irish Land Commission held that those lands would be acquired by the Land Commission. I can give the Minister details of a particular case if he wishes. That was a case where the Land Commission consented to allowing a particular person to acquire land and within a matter of months moved in. My worry is that in a case where the Land Commission would give consent to leasing for a particular period, at the end of that period, no matter what guarantees are given in this House, the Land Commission would then serve an inspection notice and that the court of [416] the Irish Land Commission would decide to acquire these lands.

Mr. M. O'Toole: I regard this Bill as a type of trial spin Bill, the views of the Minister and what he had in mind at the outset much diluted. It does nothing really. There is nothing in the Bill to attract people in a very sensitive area. There is no protection and no development structures in the Bill. I believe it will fall by the wayside in a very short time. There is a bit of flexibility in it as regards the 11-month leasing system. But the Minister must remember that he is dealing with hundreds of thousands of acres of derelict land that is in the possession of old people, widowers, disabled and incapacitated people who are unable to do anything productive on their land but have continued to lease it on an 11-month system just to hold possession.

If anything is dear to a farmer it is his land, especially if it has been handed down from generation to generation and he is not going to give in lightly. Unless he gets some measure of security in the leasing system there is no way that he will yield under this Bill or indeed any other Bill that has not got some protective measures built into it. The 12-year period would be ideal in a situation where a reclamation system was brought into being, whereby derelict land could be reclaimed and the lessee would avail of grants and in the long-term would improve the status of the land, on the one hand, and improve his lot, on the other. If he had to hand back the land it would be in a much more viable condition than when he took it over.

With regard to the social welfare side of it, there is no protection. It is all right for the Minister to give undertakings but Ministers are birds of passage and some of them are very short-lived, as has been shown in the past decade. They come and go and I am sure the Minister realises that. Even if you are not defeated at election time you are moved to the side if you try to do anything worthwhile. I am not disregarding what this Minister is trying to do. Nobody knows more about land leasing, about the structure of land and where this Bill might apply. I am [417] disappointed that it will not achieve the necessary acceleration of leasing. That is my view and I think it will be the view of most people who will examine it. It has not gone far enough. It would have been a good thing to have some provision in the Bill for a reclamation programme where the man leasing land would take it over and reclaim it. On a long-term lease he would have ten or 11 years of production capital recoupment in that type of policy.

With regard to the social welfare aspect I can assure the Minister that the people in the west who have very small holdings which they hold dear to their hearts will not go on a leasing spree unless they get guarantees that the pension officer and the social welfare officer will not be on the doorstep and that eventually they will be able to get back their holdings if they lease them. They like to see them productive; they do not like to see them going derelict. Nobody likes to see his farm go derelict. It is no good to the nation and it is no good to the lessee or to anybody.

My view is that the Bill does not go far enough. It is a trial operation that will probably die fast because it will not have the necessary attractiveness. The same happened in the case of many other Bills which were projected as positive Bills. It is a sensitive area. I am disappointed that it is not more attractive because it could then give more production.

Mr. Hourigan: The word “derelict” was mentioned. That is one of the problems that we hope this Bill will overcome. At present much derelict land is land that has been leased on the 11-month basis. Making it possible to have a leasing period for longer than the 11 months will overcome the problem of this derelict land. I would submit that it could be a very important inducement to the owner of the land because if his land is to be leased for a number of years, be it three years, five years, eight years or whatever, he must know that the person leasing it will attend to the land in order [418] to get the maximum out of it. Utilisation will be maximised and in the process the state of the land and the general standard of fertility and so on will be improved. That is a very important inducement.

I would also be concerned about the absolute guarantee that would be given and how well it would stand up in the future. It is a matter to which the Minister might attend before finalisation of this. On the question of attraction, incentive and inducement, I believe that the person owning the land will be attracted to a leasing arrangement, knowing that the land must be better managed if it is taken over a number of years; the person taking the land will be attracted to the process knowing that he or she can do something worthwhile over a number of years. It is important to mention that.

Mr. W. Ryan: I do not know whether this section deals with what I have to say now. It is in connection with a letter which I, and I presume every other Member of the Oireachtas received from the Department. It came from the Tipperary office in Thurles. I will quote from one section which states:

The Land Commission with the co-operation of the local solicitor or auctioneer wishes to encourage selected clients for whom it would be of benefit to enter a lease arrangement for three years, six years, nine years or twelve years. A bonus of up to £3,000 maximum in addition to the lease rent, plus a pension of £2,268 for a married person and £1,512 for a single person, is available to qualified farmers who lease their land for a minimum of twelve years under the farmers's retirement scheme.

The crunch there is that applications for this scheme were to be made by 30 June 1984. It seems from what has been said in this letter that this is a very attractive scheme, but how many know about it and know that the closing date is 30 June? What is going to happen after 30 June? Will there be the same attraction in the new Bill? If not, people will not be enticed to lease land. I feel that many people never heard about this at all.

[419] Mr. Howard: I wondered whether we were on the section or on Second Stage. There are two points I want to make that are relevant in this discussion. First of all there is the strength of the guarantee. I understood the Minister to say that the Land Commission will not attempt to acquire land that is made available for long-term leasing, against the wishes of the owner of that land. I assume that this guarantee is somehow or other grounded in the various amendments to the Bill before us. I would expect the Minister to clarify that.

The other matter is the attractiveness of getting this long-term leasing under way. I recognise the importance of the social welfare entitlements and the effects that leasing income could have on these. In reality the Minister is attempting to release the kind of land that is in the possession of elderly people. Therefore, it is the effect on old age pensioners we are concerned about. If we are talking about the dole, forestry workers and road workers and so on, if these are people in their prime and they are already employed for a normal week's working hours I would be amazed if they are not putting their land to some productive use. I do not imagine that the volume of land we are concerned about here is tied up in the hands of these people. I think the Minister is aiming at land that is in the hands of elderly persons.

The Minister is to be congratulated in at least facing up to a problem that has been there for a long time and getting this land, which has been described as derelict in many cases, back into productive use. We should be concerned with the guarantee aspect and with the implications where income assessment and old age pensions are concerned.

Mr. Fitzsimons: There should be a definition of the minimum time for a lease, in spite of what the Minister has said. It would seem that three years would be an appropriate minimum period. Otherwise it seems that it is possible to lease land for a period of one year and by doing so it would be possible to obtain the benefits from leasing without any advantage accruing. In other words, [420] the farmer could lease his land for a period of a year, there would be no great difference to the 11-month system and there would be benefits in doing it that way. The Minister has said that the Land Commission would have to approve of the lease. Does that mean that the Land Commission could veto the lease and could, for example, refuse to ratify a lease unless the period of time was increased?

Mr. Connaughton: The discussion has gone off on a slight tangent in the sense that what we are doing is creating an environment whereby medium to long-term leasing can actually flourish. Until the introduction of this legislation there were certain fears and anxieties held and expressed by many farm owners that, if they leased other than on the 11-month conacre system, under certain conditions they might not be able to get the tenant out. This is the fundamental reason this Bill has come before the House. It has nothing to do with attractions, although I will come to that later. Our entire goal in so far as this leasing Bill is concerned is to give the cast-iron guarantee in legislation that, save for the agreement that has been reached between the lessor and the lessee in the master lease, nothing else counts. That is it in layman's language. That is not the way the system has worked up to now. It is a fundamental change.

In my view this is one of the most important smaller pieces of legislation. We will never get the concept of long-term leasing as a profitable farm enterprise unless we change the ground rules and that is exactly what I am changing today. It appears that many Senators are beginning to think that this legislation will mean that we are only aiming at a very small minority of land holders. That is not the case at all. It has often been said to me that this was framed with a view to helping under-utilised land in the west. I would not agree with that, although I hope it will achieve that result. In the best and most fertile areas of ground I see long-term leasing becoming a concept in Irish agriculture as familiar as ownership. We have to distinguish at [421] this stage in the progress of agriculture between the ownership of land and the usage of land. I am giving a cast-iron guarantee in this legislation that any land holder who decides for one reason or another to allow his land to be leased is sure of getting it back. There is no more or no less to be said in so far as that principle is concerned.

Many Senators seem to believe that this is aimed specifically at creating the environment in which elderly folk will want to get rid of their land, particularly in the smaller farming areas. I can see a great use for this even in the Golden Vale, on the basis that there is not a townland in Ireland in which land is not set on the 11-month system or some other system, or held by various types of people who would not be in a position to farm their land, for reasons which have nothing to do with age at all. I am creating the environment now whereby those people can assist an already up and coming farmer who might want to get an extra 30, 40 or 50 acres to add to his existing holding. This is something I have been at pains to point out in the last 12 months all over the country. I want to organise this system on the basis that when this becomes law many medium-sized farmers in the best land in Ireland will use the home farm as the resource centre, in the sense that there is machinery there, and a farmer, with the help of his family locally, will get that self-sparking generation that will ensure an adequate income for himself and his wife.

We have missed the point in many of the contributions here today. We are not talking about one specific type of people. We are talking about a whole new area. Most of the people I have spoken to all over Ireland in the past 12 months would agree, because the price of agricultural land is so dear, even at this depressed stage, that based on the current interest rates it is almost impossible for anybody to borrow the money to buy the land, farm it and still make a living. I would not waste the time of the House in explaining the realities of life in so far as purchased land is concerned. Long-term leasing has a great attraction.

[422] Senator Ferris spoke about persons who have a particular qualification, an interest in farming and who have been highly trained, landless young people who would never have got a chance to get into agriculture and who would never aspire to be able to have enough to buy a farm. Through this legislation we are creating the groung rules whereby all those things are possible.

Senator Hussey and Senator O'Toole and many others spoke about this Bill as a side-kick measure. There are many things that I have been looking at in the last 12 months that will run with this Bill once it is passed into law and will make it attractive to people to get involved. It is a two-sided business. On one side, the farmer who actually owns the land will certainly not get rid of it just because it is the “in” thing to do, a novel idea. He will only do so when he believes that it is the best thing in his circumstances. Principally he will know that he will get his land back in good heart and in a high state of fertility at the end of the lease. As well as that, he will know that he will have a set income for the number of years involved, far removed from the hustling to get a customer every 11 or 12 months. He will have a guaranteed income for the duration of the lease. Built into all those leases will be escalator clauses and cost of living allowances that will mean that all those leases can be looked at after two, three or five years to ensure that the lessor's income will pace itself with inflation or the cost of living index.

We have to talk also about the tenant. What is in it for him? Many Senators have mentioned this point. There is one very important aspect which has not gone unnoticed but in my view has not got the type of exposure to which it is entitled. For the first time ever I am able to inform this House that stock relief facilities will now apply to land leased to the tenant. I will not waste the time of the House in explaining in detail all the ins and outs of stock relief but it is important to point out that for the first time ever this facility will be made available to the tenant.

I now come to the social welfare aspect. Because of where I come from and the background that I have which is [423] similar to that of most Senators, I am fully aware of the impact that the social welfare system has on the mentality of Irish farmers, particularly small farmers. I am very well aware that if a system is introduced which will ensure that certain type of benefit will not come to a farmer, then it is more than likely we will not have any change. Senator O'Toole mentioned the farm retirement pension scheme. One of the reasons that did not work out as well as we would have liked was that many of the farmers found that they were better off holding on to their land and getting the State benefit available to everybody than giving up their land.

There is one very important facility that I have negotiated with the Social Welfare Department. Heretofore there were two different types of assessment for old age pension. When a farmer reached the age of 66 he, being a land holder, was assessed in a particular way if he was the owner of the farm. For some strange reason within the Act itself his income was calculated on a different basis if he had his land leased. There was a major difference there and it was far more advantageous to an old age pensioner to own land than have it leased. The Minister for Social Welfare saw fit to equalise that and we can give an assurance to every potential old age pensioner in rural Ireland that he or she is at no disadvantage whether the land is leased or owned. That is a very important change of policy and I would certainly congratulate the Minister for Social Welfare on a change which has been spoken about for many years. I remember when this was first mooted ten or 12 years ago. It is now a fact of life and a very important one.

Many Senators, Senators Durcan in particular, spoke at length about the guarantee I am giving in regard to the acquisition of land leased on a long-term basis. All I can do as Minister of the day is give an absolute commitment as I see it that land so leased will not attract the eye of the Land Commission. A number of Senators mentioned that Governments and Ministers come and go and Senator Lanigan asked what would happen if the [424] Land Commission as we know it went out of business. Obviously it goes without saying that if the Land Commission were not there they could not be in a position either to change the decision that I am making now or to do anything else. Even if they were there, we have to acknowledge that this is a very serious national issue outside the mainstream of party politics. We have a natural resource of abour five or six million acres that are underutilised, while we have 220,000 people out of work. That is a luxury we cannot afford. Through this legislation I hope that we will be doing our bit even away from farming in the sense that we will be creating extra jobs as well. It is not beyond the bounds of possibility that this will give an opening to the second son on many farms in the best farming areas.

There were many other aspects mentioned. What I am doing today is something that has been looked for in this country for many years, to change the balance between the landlord and the tenant, between the farmer and the tenant in this case. We are giving this absolute guarantee to the farmer that on the expiry of the lease he will get his land back.

Mr. W. Ryan: The Minister did not reply to my question.

Mr. Connaughton: I am sorry. I missed that point. The Senator was referring to the farm retirement pension scheme. There was an increase in the pension rates recently. That is the scheme we were speaking of that had not the attraction we would have liked. Whether the final date id 30 June, 30 August or 30 December would not make much difference. Because of the various impediments on that retirement pension scheme it never really got off the ground.

Mr. W. Ryan: The impression the letter gives is that it is not a retirement scheme. It mentions lease arrangements. The retirement scheme was where the farmer gave up his farm altogether. It was never his again but under the leasing system it will be his. Whether or not it is a mistake, this letter came from branch [425] offices of the Department around the country.

Mr. Connaughton: This retirement pension scheme would extend to long-term leasing as well in so far as the farm retirement pension scheme would extend to the 12-year lease system. The Senator is very well aware that we have quite a long way to go before we actually get 12-year leases as the rule of thumb but one would hope that in the future this scheme would take off. What we are doing here today is of fundamental importance.

Mr. T. Hussey: The Minister mentioned that this Bill would not apply to any specific type of people and I am satisfied that that is so. There will be people in the midlands and in the better off regions of the country who will avail of the provisions of this Bill just as they will do in the west. But statistics have proved that the greatest acreage of land lying derelict at present rests with people who are in receipt of social benefits such as old age pensioners and people who are in receipt of other benefits also. For that reason it is very important that those people would be reassured that in the event of their participating in this scheme at any stages they will not suffer any loss of benefit. Unless you can do that it is going to be a major weakness in the Bill. I pointed out before the problems we were confronted with in relation to the EEC farm retirement scheme. We are going to have the very same problems here under this Bill unless we can get those people who hold the greatest acreage of land at present and who because of age, infirmity, or other reasons, are not able to bring that land into productive use, to take part in this scheme.

It is very important, particularly for people in the west, that that type of guarantee should be given. It would be more important than the guarantee that the Minister is talking about, the guarantee that in the event of people participating in this leasing scheme the Land Commission will not proceed with acquisition of the holding at the end of that leasing. For [426] the present time it would be very important that people who are in receipt of social benefits would be given some assurance before they participate in this scheme.

There are a couple of other things I would like to know and to which the Minister has not referred yet. At what stage would the Land Commission come into the picture here? Are they consulted before the lease is drawn up or are they merely brought in to vet the participants after the lease has been signed? Do they have to verify the farmers who are taking part? In other words, what criteria are the Land Commission going to use — I take it that most of the people participating in the scheme will be young people — to decide the type of young person who is going to participate in this scheme? What type of farmers are going to be allowed to participate? Will farmers' sons, or people who had no knowledge of farming qualify? If a shopkeeper's son or a businessman's son is anxious to go into the agricultural business, will he be allowed by the Land Commission to participate in that scheme? These are just a few points that I would like the Minister to clear up before we leave this section.

Mr. Connaughton: First of all, in reply to Senator Hussey on the question of the social welfare benefits, as the Senator is well aware — he has been in this particular hot seat himself — over the years this has always become a very vexed question as to the relationship between the owners of property and their entitlement to social welfare benefits. If one were to take at face value what Senator Hussey appears to be implying, that no matter who leases land a guarantee should be given that he would actually qualify for social welfare benefit——

Mr. T. Hussey: No, not so. It is only those who are in receipt of social welfare benefits already because those are the people — the majority of whom I take it are not capable of working their land — we would want to encourage to surrender their land for a period of five or ten years to younger and more progressive farmers. [427] Those are the people I am thinking of.

Mr. Connaughton: Sorry, I misunderstood the Senator. There would obviously be a major problem if one were to look at it from the other side. What my Department and myself are looking at are various other methods by which we would ensure that there would be no deterrent or impediment to farmers leasing land in so far as their social welfare benefits are concerned. At the moment we are negotiating with the Department of Social Welfare on a number of aspects of this matter. It is very important — and I agree with Senator Hussey — that we would do everything possible to ensure that persons who are in receipt of social welfare benefits would not be worse off at the end of the day just because they lease their land. I will accept, coming from the area of the country that I come from, that that is a reasonable point and it is something that I am looking at. I would also say, a Leas-Chathaoirligh, that in regard to many of the items that have been mentioned here today this is an entirely new ball game. For the length of time that I am in the Department sufficient gains have been made to get it across that this particular system is on the right road. There are other aspects of it that would be mentioned through taxation and so on, combined with social welfare benefits, at which we are looking at this very moment. It is important at this stage that the package that will develop after this, once the legislation is there, should be attractive in the sense that people will genuinely believe that they are better off having their land leased and that there is no great obstacle in so far as social welfare benefits are concerned.

As regards type of participants and the type of people that are likely to be allowed to lease land, that is another big area. In my view — this is something which would almost go without saying — it is important that people who would actually lease land would, if you like, have a training in agriculture or have an interest in it in such a way as to have shown by their experience that they have [428] attained a certain standard which would allow them to farm the land in a very efficient manner. What is important in this is the land usage to ensure that persons who are suitably qualified will in fact be allowed to expand. I think there is a great future for landless trained young people, first and second sons on Irish farms and so on. It opens up a whole new horizon. From time to time there will be certain conditions laid down for entry. The Land Commission will be very, very interested in the whole concept of land leasing.

Some months ago a number of our local inspectors were brought to Dublin and they were assigned special responsibility in all the Land Commission offices in the country to go out and sell the concept of leasing. That is what they are doing. Might I put it on the record of the House today that they are available to attend farmers' meetings of any description or indeed deal with anybody who wants to talk to them about leasing, or potential land owners and tenants. They will be delighted to talk to them.

In reply to Senator Hussey, the Land Commission would be officially concerned with the ratification of the actual lease itself when the lessor and the lessee present the lease to the Land Commission. You can take it from my reply that persons interested in making a living from the land will be very much in vogue in as far as land leasing is concerned. Everybody in the House would agree that a better utilisation of our land is the primary objective.

Mr. M. O'Toole: Is the Minister saying that as a result of the passing of this Bill the investigation at present taking place into the incomes of over 80,000 farmers in this country under the provisions made in the budget is going to cease? The factual assessment of all farmers will cease as a result of the passing of this Bill. The Minister said that the income from leasing will not be taken into consideration in the case of unemployment assessment. I think that is what Senator Hussey is trying to point out: it will be assessed under the factual assessment of 80,000 [429] farmers taking place over a three-year period.

Mr. Connaughton: No. What I said was — and I am not sure whether Senator O'Toole was in when I was explaining it — that the change that has been made in so far as land leased is concerned is that heretofore — and I gave the example of where a particular farmer on reaching old age pension age of 66 was disadvantaged by the fact — if a farmer had his land leased on a long-term lease he was at a greater disadvantage than if he actually owned the land. Through negotiations with the Department of Social Welfare that has been equalised: in other words, whether he has long-term leases or actually owns the land he is on the same level. Heretofore, there was positive discrimination against him if he had his land leased. That is what I said.

Mr. Ferris: Senator Lanigan was unhappy about my interpretation of this. I am quoting previous social welfare legislation in which there is a specific section, section 9, which excludes the actual advantage of owning the property for social welfare purposes. But the actual income from the leasing of course is taken into account to determine a person's income, and rightly so. Senator Lanigan seems to be amazed that I should suggest for a moment that the ownership of land should not be held against somebody. But for the purpose of leasing, the advantage of owning the land will not be held against the person, only the income derived from the leasing itself. That is a legitimate income that can be documented and proved and that will remove some of the anomalies that are at present used in the system of determining what the income of a smallholder is because there are so many different ways of calculating what a person is supposed to be earning, as he owns the land, that discrepancies have arisen since the new Act has been brought into being providing that everybody would be assessed on means. Heretofore, it was on a valuation basis. We discovered through the investigation process that not alone were farmers treated in a different way now, but [430] they were unable to determine on what basis the social welfare investigating officer made his decisions. That is the fundamental change made recently: they now have to be told on what grounds they are being debarred. So, in other words, the person investigating them will have to say how the supposed income is arrived at. In this case of leasing you will know the income because it will be there in black and white.

Mr. T. Hussey: But the fact that they will be told why they are being debarred does not make the medicine any sweeter, I am afraid. There are still quite a few of them being debarred. But again, I go back to this point. It is very important and I would like it if the Minister could have some guarantee written into this Bill under this section to accommodate those people who are in receipt of social welfare benefits. Unless he does that, again I repeat he is not going to have the success with this Bill that all of us would like him to have.

I would like to ask the Minister in relation to young people in particular leasing land, has he considered the possibility of bringing in the lending institutions such as the ACC or the banks to help those people, because we know that most young people, whether they are farmers' sons or whatever, would not have the necessary capital to go out and purchase stock to put on land and also to pay the annuities on that land? Would it not be possible to devise some scheme now that this Bill is going through whereby those farmers would be able to get money at reduced interest rates?

It is very important that something like that would be done, particularly for the younger people who are starting off in farming, who may have completed certain courses in agriculture and who are anxious to prove themselves in agriculture. It is very important that the lending institutions be brought in here, but not as they were in 1978 or 1979 or in those years of Irish agriculture when the lending institutions were throwing out money all over the place and farmers are now finding themselves in serious financial trouble as a result of the policies at that [431] time. It is important to have them in and to give certain guarantees as regards the financing of young farmers, who are willing to participate in this scheme, for the purchase of livestock.

Mr. Connaughton: I have already taken the step of meeting the Banks' Standing Committee. I met them some months ago when I put the proposal and my views on the way leasing was likely to go in this country. Let me state here today, that as far as the concepts were concerned they gave me every assurance that they would be prepared from a commercial point of view to be involved in this. The whole question of leasing, as the Senator would be aware, raises the question of guarantees and security and this kind of thing. Obviously, in a leasing set-up, the banking institutions would not have access to the title deeds of farms. This is something that I was very anxious to discuss with them. I must say I was informed by the Banks' Standing Committee on that occasion that where suitable long-term leases were drawn up as such and while obviously there are many other sides to this story where this long-term lease was decided on and given the “go-ahead” by the Land Commission, from a commercial point of view the banks — and indeed, the ACC — would be very interested in lending finance to this type of project. It is something that many young people around the country have actually used since then. I know what Senator Hussey was speaking about was a reduced level of bank interest. This is something that I obviously would have to look at in the overall context of where leasing will actually go from now.

Question put and agreed to.

SECTION 4.

Question proposed: “That section 4 stand part of the Bill.”

Mr. McDonald: The Minister is taking power under this section to waive purchase annuities or land reclamation annuities or other payments to the Land Commission of £2 and under. I would have [432] thought it might have been more easily understood by very many landowners and farmers in the country if the Land Commission collection branch in Castlebar had written to people with those small annuities and offered to dispose of the payments by shortening the term of years. If the annual repayment is £2, you are talking about deals especially for the land annuities, perhaps in the earlier Land Acts of the last century. Perhaps it would have been more economically appropriate for the Minister to have offered to have the people shorten the term of years and people might understand it a little better.

For a number of years there has been a reluctance by the Land Commission to allow farmers to redeem their annuities. I know that I tried unsuccessfully a few years ago to get a clearance on 15 shillings a half-year. There was only about £18 outstanding at the time. I cannot understand the policy of a Department that maintains that kind of rigidity. Yet you have the Minister specifically taking power in this Bill to discontinue the collection because by virtue of the fact of inflation and so on, it has become uneconomic to collect it. I should imagine — the Minister can correct me if I am wrong — that what he is talking about is the land purchase annuities going back to the 1883 Act and perhaps earlier Acts in the last century. We are coming on to the tail end of the repayments.

Mr. T. Hussey: I would agree with what Senator McDonald said. Indeed, I cannot understand why the Land Commission would not be prepared to accept redemption of land annuities from farmers who are in a position to pay them. You would imagine it would be a source of income for the Land Commission. I do not know whether many farmers would avail of that or not. I know that in the allocation of new lands at present — indeed going back over the last two years — the Land Commission give the option to farmers to buy out whatever land they are allocating. I think that is a very good thing. Quite a few of the farmers availed of that scheme and paid for the land and they were finished with it then. The same [433] should apply here in regard to this money that is outstanding to the Land Commission. If people were reminded that they can redeem their annuities if they pay X number of pounds inside a certain date I do not think this would be any problem. The Land Commission should avail of whatever they get. Maybe the Minister would be able to tell us what amount of money is involved, how many million, or whatever. I think there is included in that a land reclamation annuity. The Department of Agriculture had a scheme some years ago whereby the cost of reclaiming land was put on to the rent and perhaps that makes up part of this outstanding money. If there is an opportunity of collecting it by voluntary effort I see no reason why the Land Commission should not put it to the farmers and see what they would get out of it.

Mr. M. O'Toole: I think this is a very fundamental issue and I think the Minister should make a statement on this because terminating this agreement by this Bill would be fatal but if there is built into it an agreement whereby redemption of the annuity is on the cards there would be a number of farmers who would have almost reached the stage of getting the land back as freehold, they would welcome this. It may be unconstitutional to interrupt or terminate the annuity law that we have in operation, but if we have an assurance that there is going to be provision made for immediate redemption and that the people are aware of this when this Bill is passed, that is all right. Some people may not be able to redeem, short-term people who have a very high land annuity who got into possession of land recently. There are a number of old holders, such as the one mentioned by Senator McDonald, and others who would redeem their holdings now if they got the opportunity of doing so and the Minister should answer it because it is a vital question and should be answered.

Mr. Connaughton: First, I note the concern of the Senators involved. I want to give the background as to why that is there at all. As the Senator would be very [434] well aware, there are farmers whose annuities payable to the Land Commission are ever so small, shillings in certain cases. We arrived at the situation a year ago when we found that anything under £2 was costing nearly £3 to collect. It goes without saying that that is not a very profitable exercise. What we are actually doing now is that we are enacting legislation that will allow us in the years to come, where that £2 would have become £5 maybe in ten years' time, to write it off as being uneconomic, as not just worth collecting. This is not adding anything new at all or increasing annuities or anything like that. To go back to Senator O'Toole's point, it is a good one. Arrangements are being made now in my Department to send a circular to everybody concerned announcing that it is now possible to redeem the annuities. For many of them there will be very small amounts involved. I assume many of them will avail of the opportunity as they have done in the past. I am surprised at Senator McDonald's assertion that on numerous occasions he found there was inflexibility by the Land Commission in allowing this to happen. I would have thought that the Land Commission would always like to be able to get revenue in. It is something that I am surprised to hear. That is the basis of the Bill and all it does is give enough flexibility in future 4years to change to a particular figure which would be uneconomic at that stage. I will take up what Senator O'Toole and Senator Hussey said, that if many people knew at this stage that they could redeem they would do so. This information will be circulated to them very shortly. I assume that many of them will do that.

Mr. McDonald: The one thing that I, as a landowner or farmer, would cherish dearly is the fact of being on the register of freeholders. If the Minister stopped at due payments of £2 or less, what I want to know is does it take from my legal right to be a freeholder. If someone turns over the book in five or ten years time and sees that there is some outstanding payment there, will the Department say: “This file is now closed and the debt has been met in full and you are now a freeholder”? [435] Can you get a note from the collection department saying that?

Mr. M. O'Toole: My question is the same. Will the termination of the annuity automatically mean vesting of a right of freehold?

Mr. Connaughton: Yes, the intention is that it will. It is an administrative problem after that but I am giving the guarantee here that where that happens it is my intention to do that.

Question put and agreed to.

Section 5 agreed to.

SECTION 6.

Question proposed: “That section 6 stand part of the Bill.”

Mr. T. Hussey: I would like to query this statement in the explanatory memorandum:

empowers the Land Commission to determine that a purchase annuity technically set up only on vesting, has been set up at an earlier date. Allottees holding land from the Land Commission under certain types of temporary agreements are merely paying interest. Under the law as it now stands such allottees do not begin to repay their purchase moneys until the property is invested in them.

We know that in many cases that takes a long time and this can be caused by many reasons where you have legal problems and where you have problems as regards title and so on. I understand that the Land Commission can now go back over the years from the time the land was allotted and collect their annuities from that date. I am just wondering is this going to create difficulty for some people who might be allotted land for which in some cases the annuity was fairly high. Is it going to create many problems for them now?

Mr. Connaughton: No, I would not think so. What is envisaged here is that, in so far as the temporary agreements are [436] concerned, he would be paying anyway and whatever length of time is involved——

Mr. T. Hussey: He would be paying the interest up to now.

Mr. Connaughton: That is right and we obviously had to change that. That is something that was overlooked in many of the Land Bills and particularly in the sixties when it was last looked at. The matter is now regularised at this stage. The tenant would have been paying anyway but this provision allows whatever money would be paid to go against the actual amounts owed, so, in so far as that is concerned there is no real change.

Question put and agreed to.

SECTION 7.

An Leas-Chathaoirleach: Amendments Nos. 1 and 2 are similar and may be taken together.

Government amendment No. 1:

In page 5, subsection (3), line 13, to delete “said”.

Mr. Connaughton: These were errors of typing and are of no significance other than that.

Amendment agreed to.

Government amendment No. 2:

In page 5, subsection (4), line 15, to delete “said”.

Amendment agreed to.

Section 7, as amended, agreed to.

Section 8 agreed to.

SECTION 9.

Question proposed: “That section 9 stand part of the Bill.”

Mr. Durcan: As a matter of curiosity is the Minister able to say how much unregistered land there is in the country? [437] Has he any indication to hand? I understand there is a procedure under the Registration of Title Act whereby in certain designated counties any dealing affecting land has to be registered compulsorily in the Land Registry. I should like to know if the Minister would consider, in consultation with the Minister for Justice, extending that provision to ensure that all land in future is registered when any dealing affects it. I raise the point because the issue arises in my own county, particularly in the north-west Mayo area, in the Erris area, where there are vast tracts of unregistered land. This can create difficulties when one is dealing with title to those lands. This in turn is the cause of many disputes and, indeed, agrarian warfare is still occurring in parts of north-west Mayo.

Mr. Connaughton: I am not in a position, for obvious reasons, to let the Senator know how many acres of unregistered land there are. We do not know. Senator Durcan spoke about a very important aspect which the section relates to. As the House is aware I have initiated a national scheme for the rearrangement of land. For obvious reasons it will certainly happen — indeed it has already happened — that farmers will want to exchange land with each other and some of it will be registered and some not. Before this that could not take place unless we went a very long way about it and having the Land Commission acquire and so on. When this section is passed we will be in a position to exchange the procedure and have rearrangement in a voluntary way as we are now approaching it. The Land Commission will be able to help farmers who own registered land and unregistered land to exchange. That is very important. With regard to what Senator Durcan mentioned, I will talk to the Minister for Justice about that matter. I do not know how far away we are from that but we are certainly on the right road now.

Question put and agreed to.

Section 10 agreed to.

[438] SECTION 11.

An Leas-Chathaoirleach: Amendments Nos. 3 and 4 are similar and may be taken together.

Government amendment No. 3:

In page 6, paragraph (a), line 26, after “place” to insert “where”.

Mr. Connaughton: These amendments also arise from typing errors.

Amendment agreed to.

Government amendment No. 4:

In page 6, paragraph (b), line 29, after “place” to insert “where”.

Amendment agreed to.

Section 11, as amended, agreed to.

Section 12 to 14, inclusive, agreed to.

SCHEDULE.

Government amendment No. 5:

In page 7 to delete

“16 and 17 Vict. c. 71

Income Tax Act, 1853

Section 40”.

An Leas-Chathaoirleach: Amendments Nos. 5 to 9 are related.

Mr. Connaughton: Amendments Nos. 5 to 9 are technical amendments.

Mr. Durcan: I do not wish to be pricklish at this stage but as the Minister referred to typing errors I notice on the rear of the Bill — I do not know if this forms any part of what has to be enacted by this House — it is headed the Land Bond Bill, 1984. Clearly that is another error. It may not be part of what is enacted here but it is erroneous.

An Leas-Chathaoirleach: That will be corrected by the printers.

Amendment agreed to.

[439] Government amendment No. 6:

In page 7, in the third column of the second entry, to delete “Subsection (2)” and to substitute “Paragraph (2)”.

Amendment agreed to.

Government amendment No. 7:

In page 7, to delete

“44 and 45 Vict. c. 54

Royal University of Ireland Act, 1881.

Section 1”

and to substitute

“44 and 45 Vict. c. 52

Royal University of Ireland Act, 1881.

The whole Act”.

Amendment agreed to.

Government amendment No. 8:

In page 7, in the third column of the seventh entry, to delete “Section 28;”.

Amendment agreed to.

Government amendment No. 9:

In page 7, in the third column of the ninth entry, to delete “Section 4 and 8” and to substitute “The whole Act”.

Amendment agreed to.

Schedule, as amended, agreed to.

Bill reported with amendments, received for final consideration and passed.