Tom Barry (Cork East, Fine Gael)
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I call on the Minister to establish an agricultural review board within the National Asset Management Agency. The importance of agriculture to the Irish economy cannot be underestimated. While previous Governments took their finger off the pulse in respect of the importance of agriculture, we are now back to basics once again. Agricultural value added products are a key part of our exports. If treated properly and maintained over the next few years, they have the potential to grow our exports by €1 billion per annum.

However, many agribusinesses were targeted by banks. They were targeted because they had good cash flow during the boom years, but they also did not have much leveraging on their assets. The buzz phrases at the time were about diversifying portfolios and leveraging assets. However, now we know the real truth of what was going on. Many of these businesses got into property and so on because they were tied within quotas and growth restrictions within their own industry. We now have a situation where these businesses have a two-tier business model. They have a core agricultural part that is profitable, and an unprofitable property part.

Agriculture is cyclical. It has peaks and troughs. NAMA could learn some of the lessons from agriculture before it begins to dispose of its assets. Many people in agricultural communities know how to manage property over generations. Disposing of assets quickly is certainly not the way to do this. If NAMA officials think that there is a quick fix method to disposing of its property, then they are sadly mistaken.

I have heard complaints about how NAMA was dealing with its property portfolio, and it often sounded incredible. However, I was horrified to learn how it was dealing with a large piggery containing up to 30,000 pigs. NAMA froze the agreed facilities of this operation and changed its trading terms. A person who cannot feed his animals cannot sell his product and will have a welfare issue down the road. This is unbelievable. As I dug into the issue, further questions came up. I ask the Minister to consider amending section 221 of the NAMA Act to allow constructive representation from people like myself and other Members of the House. NAMA is independent of politics by legislation, and this is a terrible mistake. I also urge the Minister to consider the appointment of a Minister of State with responsibility to NAMA, because at the moment nobody seems to be responsible for what is now €70 billion of State assets. If NAMA is not taken under control, there might yet be a tribunal over it. It is too serious for there to be no control over it.

By their very nature, piggeries create indigenous employment. Everybody wants to see indigenous employment, because it is the ultimate in buying Irish. Piggeries purchase a lot of grain from our cereal industry and keep many other family farms and businesses going. They displace imports, and food imports cost €5 billion over the last few years. That is incredible. While we must increase our exports, we must also be conscious of reducing our imports to make ourselves more competitive in the longer term. If we lose our indigenous pigmeat production, we will be at the mercy of imports. If we are at the mercy of imports, we will have no control over the price inflation that will take place. Once foreign producers know that we are dependent on importing pigmeat, the price will increase. The consumer will not thank us for having a more expensive shopping basket.

We are at the end of the supply chain in Ireland and it is absolutely imperative that NAMA understands the food industry. It will have to deal with food businesses. NAMA cannot act with impunity. I urge the Minister to create a review board immediately, so that any agricultural issue that comes before NAMA is dealt with in a knowledgeable and constructive fashion.

Róisín Shortall (Dublin North West, Labour)
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I thank Deputy Barry for raising this issue tonight. I am responding to this Adjournment matter on behalf of the Minister for Agriculture, Fisheries and Food, Deputy Coveney.

The Minister for Finance does not consider it necessary to establish an agricultural review body within NAMA, although I understand that the agency has agreed to review its procedures where farming assets involving livestock are concerned.

Incidentally, the NAMA board has established four statutory committees under section 32 of the NAMA Act; an audit committee, a credit committee, a finance and operating risk committee and a risk management committee. It has also established two advisory committees under section 33; a planning advisory committee and a Northern Ireland advisory committee.

NAMA has acquired the property loans of about 850 debtors. The loans of the largest 180 debtor connections, accounting for €61 billion of debt, will be managed directly by NAMA. The rest will be managed by the banks under delegated authority. It is expected that nearly all, if not all, debtors who have farming interests or a significant interest in agribusiness will fall into the latter category and will be managed by the banks.

In the particular case which has prompted the Deputy's motion, the loans had been advanced for agricultural purposes and the properly development element was not material. NAMA did not consider it appropriate that it should manage the loans. Section 84(1) of the NAMA Act provides that NAMA is not obliged to acquire each and every loan, even where loans are eligible under the legislation. In this instance, the loans had been acquired under expedited transfer and therefore in advance of due diligence being carried out. When the purpose of the loans became apparent, the NAMA board made a decision to reverse the transfer and the Minister understands that the loans were re-acquired by the bank concerned.

In regard to the suggestion that NAMA is shutting down viable businesses, NAMA has assured the Minister that it is committed to contributing to the objectives of the National Asset Management Agency Act which, among other things, requires it to contribute to the social and economic development of the State, in addition to protecting the interests of the taxpayer by ensuring that the value of any assets securing its loans is not diminished.

Furthermore, as part of the business plan process and ongoing management of the debtor relationship, NAMA is actively engaging with debtors to get their assets to produce income and is approving decisions relating to the underlying security, including lease agreements between the debtor and third parties where it makes commercial sense to do so. There is no reluctance on the part of NAMA to approve commercially viable arrangements.

NAMA has assured the Minister that it is a particular priority for the agency, where it has acquired loans, to minimise the adverse impact on the viability of any business or on the sustainability of any jobs that may be at stake. NAMA fully recognises the importance of ensuring the continued viability of businesses, which can generate cash flow to repay debt and provide sustainable employment.

NAMA has advised that it is currently developing sectoral policies which will govern its strategic approach towards key sub-sectors in its loan portfolio. These policies will be publicised after the completion of the debtor business plan process. In that context, NAMA has advised that it has now reviewed the business plans of the largest 40 debtors whose loans it has acquired and that the business plans of most other large debtors are currently at advanced stages of preparation.

A debtor's business plan essentially consists of individual asset plans for each of his properties. For those debtors who can satisfy NAMA as to their viability, the agency will agree specific asset plans for each of their assets. Those plans may, among other options, involve disposals or completions. In determining a plan for any asset, NAMA will assess the supply and demand for similar assets in the same area or region. In particular, the agency will also be very mindful of whatever planning policies have been set by the local authority in each instance.

NAMA will not normally directly manage the loans of debtors who have farming interests or a significant interest in agri-business nor will it seek to shut down viable businesses. Under these circumstances, the Minister does not consider it necessary to establish an agricultural review body within the National Asset Management Agency. NAMA has, however, agreed to conduct a review of its procedures where farming assets involving livestock are concerned. I thank the Deputy for raising this matter.