Mr. Michael Hennessey:

Leased land is a major issue in the tillage sector. As the Chairman said, some 50% of land is leased in one form or another. There has been a big change in the past five years, on the back of the change in the taxation status of rented land. A tax-free allowance is available for a long-term lease, that is, anything over five years and up to 20 years. For a husband and wife, the maximum is €80,000 so it is very significant. It has brought good and bad things for the tillage farmer. Much more conacre land, with one-year rentals, has been converted into long-term leases. This is probably no more than 20% of the total but it has increased quite a lot. It has brought disadvantages too, including the fact that the dairy sector has the option of longer-term leases and they now offer 15-year leases, which are attractive to farmers converting from tillage or on grassland. However, they are competing with the tillage farmer for access to land and the latter cannot increase his profits or output unless he gets more land so the price has crept up steadily. In real terms, it has probably gone up by between €30 and €50 over the past four or five years. It is also because of competition from young farmers who are looking for a way into farming along with entitlements, both of which go hand in hand and require a longer-term lease.

I was asked about viability. Teagasc is worn out telling farmers not to do certain things for the past 35 years but the farmers have continued to do them nonetheless. Some have made a good success of it but others have certainly not. The pool of land is now getting smaller, however, and the level of tillage land is getting smaller, which is putting more pressure on the system. Mr. Spink will answer the question on beet.