Michael Creed (Cork North West, Fine Gael)

I move amendment No. 41:

In page 13, subsection (3), lines 5 to 9, to delete all words from and including: "subsection (1)— " in line 5 down to and including "concerned." in line 9 and substitute the following:

"subsection (1) a tax credit equivalent to the interest charged shall accumulate.".

I am not sure whether many farmers in the Minister's constituency are victims of the Government's decision to unilaterally tear up the contract it had made with farmers under the farm waste management scheme. I can advise the Minister that many farmers are angry. I do not propose to give him chapter and verse of the debacle of the Department of Agriculture, Fisheries and Food's handling of the farm waste management scheme.

We propose the amendment in light of the provision in the Bill to defer payment of moneys legally due under a contract to farmers who had undertaken work under the farm waste management scheme enabling them to comply with the nitrates directive. The proposal is to defer those payments but no cognisance is taken of the accumulated interest payments that farmers must meet while the payment is deferred.

The simple purpose of this amendment is to enable individual farmers to claim a tax credit to the value of the interest they will pay on the loans they have secured with their banks. Through no fault of their own, they are no longer in a position to repay those loans as promptly as they would have if the Government grant had been paid in full. Obviously, that provision would only assist farmers who have a taxable income. It would be preferable if we were not in this situation at all — if the Government was paying the moneys up front. I appreciate that we are facing a difficult financial situation. I accept the principle that if one makes one's tax returns late, one is penalised by the State. In such circumstances, one has to pay penalties and interest. If the State is proposing to defer payment, it is fair that the same principle should apply. The State should meet the cost of the interest farmers have to pay in the interim. That would be the preferred remedy, obviously. The Ministers for Finance and Agriculture, Fisheries and Food should agree to solve the problem in this manner. In the absence of such an agreement, a minimum arrangement is needed.

I welcome the fact that the Minister, Deputy Smith, is now present to deal with this issue. Perhaps he can update us on his negotiations on this issue with the farming organisations. I understand that discussions on interest rate provision in respect of these loans have continued until the last few minutes. I exhort him to do the honourable thing by accepting this amendment, thereby meeting the fair and reasonable requests of the farming community. The 17,400 farmers affected by this measure undertook works in good faith to enable them to continue farming. The works in question were concluded in difficult circumstances in advance of the mandatory conclusion date, which was 31 December last. The rug has been pulled from under the farmers. I implore the Minister to take action. It would be preferable if the Minister for Agriculture, Fisheries and Food could tell us that he has successfully concluded his negotiations with the farming organisations and now plans to meet the cost of the interest payments. In the absence of such an agreement, the interest element of farmers' loans needs to be covered, at a minimum.

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