Brendan Smith (Cavan-Monaghan, Fianna Fail)

I thank all Deputies who contributed on the new Land Bill. It is heartening to hear that agriculture is still of major interest and considered to be of high importance and value to the country as a whole. As Deputy Durkan stated, the measures contained in the Bill will benefit many, including farmers, sporting organisations and ultimately the taxpayer.

Almost two thirds of all land annuities, which are no longer economically viable to collect, will be written off. In 1989, the Government of the day wrote off all annuities of less than £10. In 1992, another write-off was introduced for all annuities of less than £20. This final write-off should be seen in the context of what has already been granted and balanced against the legitimate concerns of the taxpayer who would regard further concessions, as requested by a number of Deputies, as inequitable. In the €200 to €500 category some of the annuitants have not paid annuities for many years and have current arrears of up to €5,000, in addition to the outstanding capital. The cut-off point of €200 per annum for a write-off is fair and realistic.

A discount redemption of 25% will be on offer for a limited period as a further inducement to farmers to buy out their land annuities. Despite the introduction of a 50% buy-out scheme and review of repayments in 1992, significant arrears still exist. My Department has not imposed additional interest for late payment of annuities. It would be inequitable for the State and taxpayers in general to go beyond a discount buy-out offer of 25%, which would only benefit those who have failed to maintain their obligations over a long period.

The Bill will introduce a simpler means to collect arrears of land annuities. A far more simple and cost effective means for trustees of former Land Commission land will be established to enable the transfer of such property to the mainly sporting organisations which use it. The obligation to obtain sub-division consent from my Department will be removed, apart from those with annuities. Furthermore, the obligation on people from countries outside the European Union to obtain departmental approval prior to purchasing agricultural land will no longer be necessary.

I noted the remarks made by Deputies and will take a minute or two to address some of the concerns expressed. To increase the write-off to annuities under €500 per annum would cost the Exchequer a sum of €9.6 million or an additional sum of €5.7 million over the figure of €3.9 million, which relates to annuities up to €200 per annum. It would benefit an additional 1,000 farmers. This would be an unacceptable additional cost. Deputies must remember the many thousands of farmers who have paid their annuities down the years. It would be unfair to them if those who did not make any meaningful attempt to pay were now rewarded.

As Deputies have stated, the justification for writing off the annuities up to €200 per annum is mainly due to the fact that the cost of the write-off will be offset by staff savings over a number of years. I do not intend to re-examine the write-off threshold of €200 per annum, as provided for in the Bill.

The collection method utilised by collection staff in Castlebar is largely computerised and not manual, as stated by Deputies. The intended period of six months for operation of the scheme is more than adequate. The Bill was published in July 2004 and introduced in the Seanad in October 2004. Already, a period of 11 months has been available to annuitants who will qualify for the discounted buy-out to regularise their titles. These annuitants do not need to wait until the Bill is enacted to check that their title is in order or approach their financial institution about raising finance to participate in the buy-out. By the time the scheme is introduced and finalised, much more than one year will have passed since the Bill was published. All annuitants over €200 per annum should take immediate steps to organise their affairs.

Deputies have asked me to increase the discount from 25% to 50%. The 25% discount to the 2,300 annuitants affected will cost the Exchequer approximately €4.7 million. The 2,300 annuitants in question have current arrears of €4.1 million. If all arrears were paid off, it would almost cover the cost of the 25% discount. If the 25% were to be increased to 50% as requested by some Deputies, it would cost the Exchequer another £4.1 million. Those being offered the proposed 25% discount were offered a previous discount in 1993 and did not take it up. They are being offered a second bite at the cherry in the space of more than ten years. I do not intend to increase the discounted buy-out figure from the level set out in the Bill.

My Department has not used debt collectors for the purpose of collecting annuity arrears since early 2002. The collectors used generated a payment of €400,000 to the Department in respect of arrears. The fee charged by them was 8.5%, not 20% as claimed by Deputies. I decided it was better and more favourable to farmers to introduce another discounted buy-out scheme, rather than continue with debt collectors as a means of extinguishing land purchase annuities and any arrears. Deputies have stated that annuity rates of 18% are currently being charged by my Department. This is not the case and no current annuity interest rate exceeds 10.3%. In 1993, all interest rates over 10.3% were reduced to this more favourable rate for all annuity payments. Current mortgage and loan rates are favourable and it is likely annuity holders can avail of a loan rate lower than their annuity rate and thereby participate in the buy-out scheme. The scheme, however, is voluntary and some may not wish to participate or may be unable to participate in it.

I do not intend to extend the proposed discount of 25% to cover arrears and arrears will have to be paid off. Deputies have referred to the additional collection powers which will be available to me after the Bill is enacted. The powers contained in the Bill ensure that farmers who retain their annuity maintain payments thereafter. For too long annuitants at the top end have neglected to make any payments to the Department and I have an obligation to the Exchequer to ensure that ongoing financial obligations are met. I have already given a commitment in the Seanad that before set-off powers are utilised, there will be a full discussion with any annuitant in arrears to ascertain his or her exact financial position and to determine what, if anything, might be set off from payments to be received by that annuitant in respect of the discharge of arrears. Any payment due to an annuitant by my Department will be subject to the additional collection powers. If all annuitants over €200 per year took up the scheme on offer, there would be no need for collection powers to be utilised.

I do not intend to introduce specific consultation provisions into the legislation because they are not warranted. The powers set out in section 6 of the Bill do not place my Department in a better position than any other creditor. It will be necessary for an application to be made to the appropriate court of competent jurisdiction to obtain relief, for example, a garnishee order, as provided for in the section. My Department is unable to seek direct payment from third parties who might owe money to an annuitant without first making an application to a court.

As far as the sporting trusts are concerned, the current trustees will decide to pass their interest to the user clubs to maintain such sporting trusts in perpetuity. As for the other trusts, cow park and turbary, it has been the practice for the trustees who own this land, but subject to the specific trust, to transfer it to either local authorities or local development community companies. This enables a local community interest to be maintained and enjoyed into the future. It was never the intention that cow parks that were no longer being used for their intended purpose and were transferred to county councils would be sold off by councils to the highest bidder. In future, before a cow park is transferred to a county council, a specific commitment will be obtained from that council that the land will be used for sporting, recreational or other purposes for the benefit of the local community and will not be sold on to generate income for the council. In fairness to councils, in many cases the councils were themselves the trustee and maintained and protected the cow parks down the years.

The Department can apply conditions if it wishes when lands are being transferred but policing them would be difficult and we would lose our powers once the land is transferred. Embankments are not owned by the Land Commission or the Department of Agriculture and Food. Maintenance was never a duty of the Land Commission even though some of it was carried out on an ex gratia basis. Trust funds were set up for some embankments and these funds are now kept by the public trustee, an officer of the Department of Agriculture and Food. Turbary owned by the Land Commission has been owned by the Minister for Agriculture and Food since the 1992 dissolution Act.

I thank all Deputies who contributed and appreciate their support for the Bill. I commend the Bill to the House.

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