Contact: Nicholas P. Bielenberg
AGRICULTURE INTO THE TWENTY-FIRST CENTURY
The Irish Landowners Organisation welcome the opportunity to make a submission to your Committee on strategies for Agriculture into the next Century.
INTRODUCTION
The Irish Landowners Organisation is a concerned group of people who directly or indirectly make their living from the land, and is affiliated to the European Landowners Organisation (E.L.O.), the Body representing all landowners in the E.U.
We are concerned at he dwindling influence of agriculture and rural enterprises as agricultural land owners decline at the rate of 4% per year.
Since Ireland entered the Community in 1973, in spite of the Common Agricultural Policy from which Irish agriculture now receives 1.6 billion pounds, and a 60% increase in volume of production, numbers of rural landowners have halved, and their income in real terms has declined by more than 12%.
While in Ireland we still have 9% of the working population employed in agriculture, in neighbouring U.K. and some of the more industrial countries the figure is down to 2% and is still dwindling.
It is important however to recognise that agriculture is more important to the Irish economy than it is to nearly all economies of the other E.U. Member States, and that the Agri-food sector still accounts for 13% of G.D.P.
The Irish farmer is already well aware of the threats to his and his successor’s future viability that will come from reduced E.U. support and the next W.T.O. round. The reduced demand for places in Agricultural Colleges is clear evidence of this.
Irish agriculture has already got serious structural problems which are not being addressed. Only about 10% of Irish farms are able to provide employment for two or more labour units.
Only nearly half of Irish farms the father/or spouse have an off-farm job.
We believe that in a Free Trade environment the stark reality is that a minimum economic size of a farm will be carrying 200 dairy cows, 400 beef or sheep livestock units, or 1,000 acres of tillage. This will be managed by a maximum of 30,000 farm operators.
While the outcome of the Agenda 2000 negotiations has been generally accepted as successful, in our opinion it is only a stop-gap measure which does not begin to address the problems which will face rural Ireland, and indeed Europe.
It is not within the scope of a Submission such as this to deal with agricultural policy generally, but we would like to focus on certain aspects of land ownership which need to be addressed if Ireland’s agriculture is to have a reasonable chance in the future. The areas that we would like to focus on are as follows:
Government Direction
It has to be accepted that National agriculture policy has become more and more under the influence of Brussels, and indeed it can be argued that it is almost entirely so.
While successive Governments and the Department of Agriculture have the ultimate responsibility for National agricultural and rural policies, these have been almost entirely framed on the basis of funds that can be obtained from the E.U. There is no National long-term strategy that embraces all aspects of our rural resources available to us in the form of land, capital and management. There is no comprehensive National plan for rural Ireland and all its various assets.
While we welcome that Rural Development will come under the aegis of the Department of Agriculture and Food, the recent White Paper on rural development is disappointing. While the future problems for rural Ireland are recognised, there do not appear to be any specific proposals to address the problems, and there are not indications of a budget to address the problems.
Rural Ireland is now under the direction and control of numerous State Bodies and Departments, all of which have their own agenda.
While the Department of Agriculture is still the main player for landowners, there are many other Bodies that impinge on land stewardship. These would include the Department of Environment and Local Government, Arts, Heritage, Gaeltacht and Islands, Marine and Natural Resources, Tourism, Sport and Recreation.
In addition to the above landowners also have to deal with Bodies such as the Environmental Protection Agency, Local Planning Authorities, and of course the Department of Finance.
Successive Government have also changed certain Government Departments and their functions. The classic case of this is Forestry, now a most important rural enterprise, which has been kicked from pillar to post, and has moved on at least on three occasions from one Government Department to another.
We would accept that a part of the problem stems from the European Commission where the responsibility for rural Europe is also dispersed in different divisions each with a different agenda.
For example, whereas the Common Agricultural Policy comes under the DGVI, Rural Environment is under DGXI.
In Ireland the Special Areas of Conservation come under the direction of Duchas. Most of these areas concern agricultural land. It is clear from the regulations of the S.A.C’s that Duchas has little or no knowledge of practical agriculture.
Apart from, in certain cases, impossible regulation, there has been a total failure on the part of Duchas to recognise landowners property rights under Article 37 of the Irish Constitution. We believe landowners property rights are being eroded in alarming ways by at times extreme and ill-conceived environmentalism and bureaucracy.
In our opinion it would be better if the S.A.C’s as well as forestry came under the aegis of the Department of Agriculture, Food and Rural Development. The Department of Agriculture has already got a record of successfully managing the Rural Environment Protection Scheme.
We believe that landowners have always been most concerned about the countryside and its management as at the end of the day it is their home.
Conservation however is dependent on families being able to earn a reasonable living on the land, if not in traditional farming, then in rural enterprises near their homes. We in the I.L.O. feel, as do our colleagues in Europe, that E.U. policy in this is lacking and without focus.
Taxation and State Aid
Since the 1960’s industry, property and the service sector developed by encouragement through substantial grants and Tax incentives. Forestry has also benefited from a similar strategy.
The agricultural community has not had such benefits since Income Tax was introduced in 1980, and the Farm Modernisation Scheme ended in 1984.
We believe the present agricultural and rural policy is too heavily reliant on what funds can be obtained from Brussels, and there is little incentive from National sources.
The well-being of the National economy has largely passed farmers by. Over the last thirty-five years industry and tourism have grown to their present levels due to State Grants and favourable Tax regimes. These have included up to 50% capital for grants for new industries, 12.5% Corporation profits Taxes, Urban Renewal relief, BES Tax relief, and accelerated depreciation allowances. Landowners do not have similar benefits. It is ironic that now the more successful agricultural entrepreneurs find it more profitable to invest in Urban renewal and other Tax driven schemes than to re-invest in their holdings.
We would regard it as essential that a farm Taxation policy is devised that will improve Irish farm structures.
As the price of land is too high and is being driven by non-agricultural factors, it will be difficult or impossible for farmers to expand the size of their farm without a strong Tax inducement. We would therefore submit that additional lands acquired could be written off against farm profits over a period of twenty years.
We would also propose that the purchase of milk quota could be written off over a period of three years.
Tax measures should be introduced to encourage partnerships, share-farming, and long leases. At present any schemes and premia that exist paralyse partnership and share-farming.
All these measures would be designed to improve farm structure.
We believe it unrealistic to Tax farm profits at full P.A.Y.E. rates, as a high proportion of the profits should be re-invested in the business.
We would propose therefore that the normal personal Taxation rates should apply to drawings only, and profits re-invested in the business should be Tax-free, or at most 12.5%.
We believe that arrangements such as the above which enable the committed farmer to become or stay viable should be encouraged. However, at the present time such arrangements are positively discouraged. For example, most livestock headage grant and premia schemes are capped on a per head basis, and the Rural Environment Protection Scheme is limited to 100 acres. The E.U. Early Retirement Scheme also suffers from the same flaw.
In our opinion a range of measures must be changed and a total re-examination of the farm Taxation scheme undertaken to encourage the operation of more viable holdings. We believe in certain respects that National Policy is confusing what is best for the future for Rural Ireland with social politics. If the objective of the Rural Environment Protection Scheme, for example, has as its objectives ‘to establish farming practices and production methods which conserve and protect the landscape and environment generally, and produce quality food in an extensive and environmentally acceptable manner’, then it is illogical that this should be Capped at 40 hectares.
To summarise, we believe that the whole area of grant aid, premia and Taxation must be examined, and where necessary changed, to encourage the development of larger and more economic operating units.
Rural Development
We submit that Rural Development is primarily about jobs, rural communities, agriculture and the environment.
The successful preservation or enhancement of the environmental value of rural areas will rest on continued sustainable land management. Rural communities and jobs will continue to be dependent on the management of the land.
While it must be recognised that the numbers employed in primary agriculture will inevitably be reduced, the strategy for Rural Development should be to stabilise populations by alternative forms of land use and small and medium sized enterprises.
We believe that no serious National thought has been given to this problem, and in some rural parts of Ireland we are beginning to see a form of desertification which has become a feature of certain parts of rural Europe also.
While we appreciate the need to protect the environment and sympathetic planning is important, this must be balanced with an opportunity for economic development.
There is now considerable evidence that many Rural Development projects are being frustrated by excessive environmentalism based on little or no scientific basis.
We believe that a bottom-up approach such as leader could be expanded and encouraged through National assistance rather than frustrated by central bureaucracy.
To summarise therefore, a strategy of Rural Development should primarily focus on keeping rural communities viable which must be based on continued land management. If our rural population is to be maintained, then alternative forms of land use and small and medium enterprises based on primary agriculture must be encouraged.
Natura 2000
In our opinion the proposed operation of Natura 2000 has got off to a bad start, and will continue to be fraught with difficulties.
The implementation of the Habitats Directive, which in Ireland comes under Duchas, fails to recognise normal and good sustainable farm practice and has not considered landowners property rights under Article 37 of the Irish Constitution.
We believe the implementation of the Habitats Directive should be based on securing the voluntary co-operation of the owners of the proposed Natura 2000 sites. For example, a National Law to implement the Directive should not provide any new power for Conservation agencies to require owners to manage land in specific ways at their own expense. The duty to secure the favourable conservation status of the species and habitat listed in the Directive lies on the Member State, not on the owner.
If the Irish Government wants to change the way in which land is managed it should so by negotiating a voluntary management agreement with the owner for that purpose. There should be a code of conduct for the Nature Conservation agencies to help them gain voluntary support from the landowners on their Directive.
In summary therefore, we believe in a voluntary approach, extensive consultation and National resources. It should be a basic principle that public benefits are secured at public costs and not a cost to the private owner.
CONCLUSION
In this submission we have concentrated on the improvement of rural structure both at farm level and in Rural Ireland generally. We recognise that there are also many other matters which your Committee will have to address.
We believe if rural incomes are to be of the same order as wages earned in other sectors in Ireland, that then similar special incentives as are being given to most other individuals and Companies in Ireland, must be offered to farmers and rural entrepreneurs.
Farm incomes have always lagged considerably behind the average industrial wage. In the past due to lack of employment opportunity young persons were prepared to remain on the land in spite of this. However, with better education and employment opportunity elsewhere there is a serious danger of a massive rural exodus to the detriment of the entire Irish economy.
We believe the enlightened Taxation policies that have been responsible for the development of Industry, Tourism and the Financial Services Centre must now be applied to Rural Ireland. Otherwise what in the not too distant past was our greatest employer and producer of export earnings will fade to insignificance.
Finally, we would like to see Rural Development and Environmental programmes based on co-operation between Government and the rural community rather than coercion.
We submit that Government direction should be concentrated, and as far as possible, come under the aegis of the Department of Agriculture. Agriculture can continue to be the main player in the rural world, and must not be regulated by Bodies that have no understanding of standard good agriculture practice.