Mary Coughlan (Donegal South West, Fianna Fail)

I move: "That the Bill be now read a Second Time."

I am delighted to present the Land Bill 2004, which was passed by Seanad Éireann last October. This Land Bill is designed to achieve several objectives. The main thrust of what I propose is a further and final, equitable means to address long-standing difficulties with the collection of land purchase annuities. I want to resolve the ongoing accrual of land annuity arrears by providing for a reduction in the numbers of land purchase annuities, and more effective collection of any remaining annuities in the future.

I propose a write-off or buy-out offer for annuitants, which will be of direct financial benefit to thousands of farmers. I also want to make it easier for trustees of general and sporting trusts to transfer trust land without having to bear the legal and financial responsibilities themselves. I intend to reduce red tape by providing for greater administrative operational flexibility and reducing some of the expense involved in completing land transfers.

To put these measures in context it is important to give some historical background. The Irish Land Commission was established in 1881. It was originally a rent fixing body, but its main business became that of facilitating transfer of freehold ownership of land from landlords to their tenants. It examined the landlord's title, paid him or her the purchase money and vested the freehold interest in the occupying tenants.

As many tenants did not have access to sources of capital to pay for the land, the concept of the land purchase annuity was introduced. Capital was provided to tenants by the former Land Commission and repaid by the tenant owner by way of an annuity spread over a term of years.

These capital advances or mortgages played a very important part in bringing about tenant ownership of agricultural land. The Land Commission radically altered the face of rural Ireland. In the process, the juxtaposition of the absentee or powerful landlord against the powerless agricultural tenant was fundamentally changed. Tenants became owners of their land and ongoing structural reform improved the re-arrangement and enlargement of holdings. Overall two thirds of the land in the State, some 5 million hectares, changed ownership with the assistance of the Land Commission, a body with which the issues of land ownership and land reform are synonymous.

By the early 1980s it was generally accepted that the Land Commission had achieved its primary objectives. Accordingly, it was decided to terminate acquisition of further land and actively dispose of the remaining lands on hand. The Land Commission was eventually dissolved by the Irish Land Commission (Dissolution) Act of 1992, which came into effect on 31 March 1999.

Since the transfer of the Land Commission functions to the Department of Agriculture and Food, officials have continued to wind up the affairs of the former Land Commission. This Bill is a further step in that task. The measures in this Bill deal primarily with better administration of annuities; easing the transfer of trust lands; reducing bureaucracy and reducing the cost of conveyancing transactions for all agricultural land.

I am pleased this Bill meets one of the commitments to the farming sector in the partnership process under the Programme for Prosperity and Fairness and the Sustaining Progress Agreement. In bringing forward this Bill, the Government is fulfilling the commitment to introduce a Land Bill on the operation of land purchase annuities and the management of former Land Commission lands.

One of the principal aspects of the Bill is the land purchase annuity write-off in section 2. I propose to make legal provision for the write-off of all annuities of €200 per annum or less. As a result of this provision two thirds of all existing annuities will be written off. The measure will benefit more than 4,500 annuitants at a cost to the Exchequer of approximately €4 million an average write-off of nearly €1,000 per farmer. The good news for some 4,500 farmers is that they will no longer be liable for further half yearly payments to the Department and their land will not have the burden of an annuity attached to it.

Under the Sustaining Progress agreement, the Government committed to reducing the burden of the land purchase annuities. By introducing this provision, I am going far beyond the Government commitment, as I am removing the burden altogether for two thirds of all annuitants. In section 3, I propose a further incentive to encourage the remaining farmers who have land purchase annuities to take the final step towards fully owning their land and finally achieving the primary objective of the former Land Commission namely, tenant ownership of agricultural holdings, that is, full unburdened title to the land with all the advantages that full ownership entails.

When this is enacted, a scheme will be introduced to allow those farmers with land purchase annuities of more than €200 per annum to buy them out. Some 2,300 farmers will be able to avail of this concession, to redeem their annuities at a substantial discount of 25%, subject to their annuity payments being up to date. The scheme will operate for six months, starting in the spring and ending in late autumn of 2005. Precise dates have not been set.

The Department does not require clear title from farmers, who wish to avail of the buy-out scheme. Those annuitants, however, who wish to raise finance to avail of this offer may need to show clear title to their bank or other financial institution in order to obtain a loan. These farmers will have, in effect, a timeframe of almost 12 months to regularise their title affairs and I urge them to attend to this without delay.

The Department will contact each annuitant personally in due course to advise him or her of the scheme. The farming organisations can also play their part by drawing their members' attention to this offer. The yield to the Exchequer as a result of this measure could be as much as €18 million, depending on the numbers who avail of the buy-out scheme. This measure has the capacity to alleviate an existing debt problem for certain farmers and improve the financial situation of most annuitants. I encourage farmers to consider what is a final offer very carefully. It is, however, just an offer. Those annuitants who wish to continue to pay their half-yearly instalments to the Department, on time, can continue to do so. Farmers should discuss the attractive benefits of this offer with their financial advisers with a view to obtaining capital to pay their purchase annuity redemption price and improving their overall financial position.

In addition to reducing the number of annuities it is necessary to provide greater control measures for the future collection of annuities owed, in the interests of the taxpayer. As part of this initiative on annuity compliance, section 4 makes legal provision to set off any grant or single payment entitlements due to farmers by the Department, against annuity payments that are owed and not discharged. Before these set-off provisions will be utilised, there will be a comprehensive consultation process with the annuitant concerned. These powers will not be applied without notice being given to the annuitant and in a proportionate manner, if applied. Furthermore, section 5 provides that individuals with land purchase annuities will be required to present a certificate of compliance to the Land Registry in cases where they propose to dispose of all or part of any land subject to an annuity. The Department will furnish such certificates only where arrears outstanding have been cleared or, preferably, the entire annuity redeemed. I will deal sympathetically with cases where sites are being transferred to family members without financial consideration.

I also propose in section 6 to amend section 28 of the 1933 Land Act. The new provision will enable the Department to recover payment of arrears of annuities from defaulters by way of application to the courts, in cases where such moneys are not recoupable, except through payment owed to the defaulter by third parties. The proposal will provide that a warrant issued under section 28 of the 1933 Land Act may take the form of an attachment of debts by garnishee order or the appointment of a receiver by equitable execution, following an application to the court. Being facetious, I advise it is best to stay out of the court and take up the offer. That would make life simple for all of us.

These improved collection measures will not be implemented without a prior attempt to come to some voluntary arrangement with individuals regarding their arrears position. Every case will be dealt with on its merits and there will be genuine consultation and a sympathetic approach adopted by the Department in bringing about payment resolution by consensus. It is not the intention of this legislation to bring about hardship for annuitants and the ability to pay will be taken into account.

I want to resolve the problem of land annuity arrears. These control measures are designed so that action can be taken against individuals who refuse to pay for the land, which they purchased through the former Land Commission and who have consistently failed to discharge their repayment commitments. It is worth pointing out that currently there are 49 cases amounting to almost €1 million in arrears.

The total amount of annuity arrears owed to my Department amount to approximately €5 million. In summary, the write-off and buy-out incentives would be rendered meaningless if they were not accompanied by new powers to safeguard the taxpayers' interests. We must ensure that all revenues outstanding are paid.

I turn now to the next element of the Bill dealing with easing the transfer of trust land. This is land held in trust under the Land Acts, usually for sporting or general community purposes. I propose to simplify conveyancing procedures to ease the transfer of title ownership, by removing the legal and financial burdens from trustees. There were approximately 500 of these local trusts set up by the Land Commission, some of which have been disposed of over the years. Local GAA and other sports clubs use almost half of these trusts. The balance is mainly turbary trusts and cow-park trusts, which were established to provide some communal land for keeping animals by those in rural communities who did not actually own agricultural holdings.

In the case of the sporting trusts, because the sporting organisations using the trust lands do not own the property, they are reluctant to commit to significant development of, or investment in, the trust property. As a result, many properties are not maximising their potential benefit to the community in which they are situated. The measure I propose should greatly facilitate the legal transfer of these lands from trust to actual user ownership, which should allow greater development of these sporting and other local amenity facilities, and ultimately benefit the whole community. There may be as many as 200 trusts interested in availing of this measure and I recommend that other trusts should also consider the benefits this measure offers.

Vesting orders are the means by which the Department transfers land into the ownership of the person or persons named in the order. Section 28 of the Land Act 1931 currently provides for publication in the prescribed manner, which is costly, onerous, cumbersome and ultimately results in delays. I propose a technical change to be made to legislation governing the publication of vesting orders by repealing and replacing section 28, with a requirement to publish only a notice of the making of such orders while still continuing to forward copies of the vesting order to the individuals concerned or their legal representatives. This will lead to speedier transfer of land and administrative improvements.

At present, certain statutory instruments, known as rules under the Land Acts may only be made following the convening of the rules committee. When this provision was introduced, the Land Commission was separate to the Department. Its workload was heavy and it was sensible for all relevant parties to meet and consider new proposals. However, since the dissolution of the Land Commission, there is little point in having a law that specifies that two officials, the Secretary General of my Department and an assistant secretary, must meet the President of the High Court before a statutory instrument is made. I propose to amend section 3 (1) of the Land Act 1933 and remove the necessity of having to convene meetings of the rules committee, in favour of my Department consulting the President of the High Court or his nominee, as Judicial Commissioner and the President of the Law Society, before making rules under the Land Acts.

On the advice of the Office of the Attorney General, I propose to make amendments of a technical nature in sections 10 and 11. In section 10, I propose to provide a statutory base for Government decisions made in 1989 and 1992, whereby small amounts in respect of land purchase annuities-land reclamation annuities were written off. At the time, the write-off was introduced on an administrative basis, but as annuities have a legal base it is prudent to provide a legal basis for the write-off. There are no implications for the beneficiaries and the measure is merely to provide legal certainty.

In regard to section 11, I propose to provide a statutory basis for the Government decision in 1992, which approved concessions to land purchase-land reclamation annuity payers where they were offered the opportunity to buy out their annuities at a discount. However, there was no provision in existing legislation authorising the Minister to accept less than the full amount to buy out such annuities. In order to provide this, it is necessary to introduce this measure in the Bill. As with section 10, there are no implications for the beneficiaries of the measure except it confirms their position in law.

On subdivision control of agricultural land, it is proposed to repeal section 12 of the Land Act 1965. The control on the division, letting or leasing of agricultural land was first introduced when the former Land Commission was primarily concerned with the elimination of congestion and fragmentation of agricultural holdings. The Commission achieved the enlargement, consolidation and re-arrangement of holdings to a viable size, through the compulsory acquisition of land and its subsequent re-allotment. Subdivision control was a logical concomitant to the process of enlarging and maintaining such holdings in order to prevent landowners from disposing of their property in a manner incompatible with the State's agricultural policy. As long as the former Land Commission was active in redistributing land, there was logic in controlling any increase in the number of smallholdings whose owners could then join the long queue of applicants for Land Commission land.

The State policy of enlarging holdings was aimed at creating viable farming units. It was a policy that was appropriate for its time as it was logical for the State to protect its investment by controlling the indiscriminate division of holdings. As the State is no longer engaged in acquiring and redistributing land, there is no need for continuing sub-division control. In fact, time has shown that economic factors lead to the consolidation of holdings, rather than their continued subdivision, as evidenced by the increasing size of farms in the State. Let me provide an example. In 1973, the average farm size was 23 hectares. By 2002, it had increased to 32 hectares, an increase of almost 40%. As a result, the granting of consent has now become a formality and in no case in recent years has consent been withheld. However, as section 12 of the Land Act 1965 has not been repealed, solicitors for landowners, who wish to subdivide or lease their land, must still apply to the Department for consent, giving rise to more than 15,000 applications per year to the Department and additional costs for the landowners. The abolition of subdivision control will save landowners legal and other costs involved in making subdivision applications. In addition, there will be a visible benefit in the reduction of administrative time incurred by staff in issuing the relevant section 12 consents.

It is proposed to repeal section 45 of the Land Act 1965. For historical and cultural reasons, foreign investment in land, particularly non-resident foreign investment in the State, was a sensitive issue. Prior to the Second World War, there was no restriction on the purchase of land in the State by non-nationals. However, after the war, primarily due to changes in the tax laws in the United Kingdom, there were increasing purchases of agricultural land by non-nationals. This trend met with strong resistance from owners of small uneconomic farms who had hoped to acquire, with the assistance of the former Land Commission, the lands being bought by non-nationals. Section 45 consent was introduced as a result of this pressure and the rationale was to ensure a fair and equitable distribution of land to Irish nationals and long-term residents and to prevent the creation of a class of non-resident landowners.

In practice, a section 45 consent is required in all agricultural land purchases, which is all land except that which is wholly situated in a county borough, a borough, an urban district or a town. Consent is not required where agricultural land is being purchased by a class of persons known as "qualified persons" as specified in section 45 of the Act. For example, an Irish citizen or someone who has been resident in the State for a period of seven years is deemed to be a qualified person. On Ireland's entry into the European Community, it became obvious that the restrictions on purchases of land by non-nationals, or more specifically by nationals of other member states, imposed by section 45, were contrary to our freedom of movement and establishment obligations under the Treaty of Rome. As a consequence, various statutory instruments have over the years extended the categories of qualifying individuals for whom consent was not necessary. These changes and the cessation of land acquisition by the former Land Commission in the early 1980s further reduced any justification for withholding section 45 consent, so much so that the issue of consent has become a formality. No applications have been refused for several years, but because the section has never been repealed, some 300 applications are received and processed each year. More importantly, in conveyancing transactions solicitors have to establish the nationality of their client, insert the appropriate nationality certificate in the deed of purchase or, in limited cases, apply for a formal consent for their clients and perhaps charge their clients accordingly.

I want to end this unnecessary red tape and bureaucratic expense in checking nationality for the small number of non-qualified persons or companies seeking a consent. Nationality certificates will no longer be required in deeds of purchase for any land purchased in the State. Section 13 contains the Short Title, construction, collective citation and commencement date.

The proposals in the Bill provide for a potential contribution to the Exchequer by way of a capital lump sum being paid to it, will significantly reduce the burden of land purchase annuities for a significant number of farmers and reduce the administrative burdens on the Department permitting staff to be redeployed to more urgent and productive areas.

The proposals in the Bill also provide for the removal of the burden of annuities for many farmers, better administration of land annuities, simpler vesting of trust land and rule making and a significant reduction of bureaucracy and costs involved in completing land transfers. For all those reasons I commend the Bill to the House.

See this speech in context