John Paul Phelan (Fine Gael)

The last Government of which Fine Gael and the Labour Party were members was very supportive of agriculture, which is acknowledged by virtually everyone involved in the industry. The former Deputy, Mr. Ivan Yates, was the best Minister for Agriculture there has been in a number of years. Notwithstanding that, the current Minister is doing a reasonable job and I am pleased she is present today. She is as good a Minister for Agriculture as Fianna Fáil has ever produced, which is about as high a compliment as I am able to pay her.

I am pleased the Minister is present to discuss the national agreement, in particular the emphasis on the farming pillar. We debated a Private Members' motion at the time the other pillars to the national agreement had been agreed. I remember making the point that it was premature to debate the national agreement when the agriculture end had not been finalised. Nevertheless, we are present today to discuss the agreement that has been reached. There is much good news in the agreement but a number of outstanding areas where serious problems for farmers still reside. The reason for the delay was the fact that a number of organisations left the talks because of the nitrates directive and an attempt, not so much by the Minister for Agriculture and Food herself but her colleague, the Minister for the Environment, Heritage and Local Government, Deputy Roche, to bully farmers into a particular course of action. That situation is not as fraught as it was when the farming organisations walked out.

I do not accept Senator Mansergh assertion that the problems with the nitrates directive have been resolved. The deadline for slurry-spreading under the directive was 16 October and the farmers spent that week spreading slurry. It was a dreadful week for that activity but in the following two weeks there were perfect weather conditions. The problems forecast by everyone who said one could not farm by dates but only by following weather and ground conditions came to pass. Far from being sorted, the problems still exist.

Senator Coonan and others mentioned the failure of the agreement to take account of inflation. They are correct; there is no index linking. Senator Mansergh and the Minister referred to the farm retirement scheme. I wrote to the Minister about this recently. A number of people who joined that scheme several years now find themselves with severely reduced pensions in real terms due to the huge increase in the cost of living in the intervening years. These people will not get any succour from this agreement, in terms of their farm retirement pension being index linked in future. That is unacceptable, particularly at a time when the Government takes every opportunity to crow about how much it is putting into pensions.

This is a significant body of people who entered in good faith into an agreement a number of years ago to retire. Everybody involved in agriculture wanted such an agreement to be put in place. A large number of older people were involved in farming and the objective was to get more young people involved. However, these retired farmers have been put at a severe disadvantage because their pensions are not index linked.

Other speakers have mentioned the issue of land purchase and farm consolidation. It is interesting that the changes announced in the budget two years ago have been a spectacular failure. Only two farmers in the first year and 12 last year took advantage of the changes announced by the Minister for Finance, Deputy Cowen. Those changes should be loosened up in the forthcoming budget so more people who need to consolidate their holdings will be able to avail of that scheme. A total of 14 farmers taking it up over the course of two years is most unsatisfactory.

Reference has been made to the compulsory purchase of land and the issue of capital gains tax. This affects my constituency as the Dublin to Waterford road goes through Carlow and Kilkenny and the Cork to Dublin route goes through part of the constituency. Effectively, if a farmer is forced to sell ten acres of land, the Government is robbing two acres of it. The farmer is an unwilling vendor but must pay 20% of whatever he receives in capital gains tax. That is the real effect of the policy. In addition there is 9% stamp duty on it.

The Minister of State at the Department of Finance was the leader of one of the farming organisations at the time the agreement on roll-over relief was reached. It is disgraceful that, as soon as he got his feet under the table in the Department of Finance, in the next budget the roll-over relief scheme was dropped. I have stated in the debates on every budget since then and in every discussion the House has had on agriculture that a new and improved version of the roll-over relief scheme must be introduced. These major roads are being built throughout the country. Farmers who are determined to stay in the industry and want a future in farming will be interested in purchasing land that is put up for sale. However, because a huge number of farmers are affected by the building of the new roads, the cost of land that is put up for sale in their area will go through the roof. It is necessary to re-examine roll-over relief, particularly with regard to people who are unwilling vendors of land for public infrastructure.

Dairy quota reform has also been raised in this debate. The Government has made a mess of this issue. In fact, it was the Minister's initial, ill-informed rumblings about quota when she was appointed that led to the cost of quota, particularly in my constituency, rising dramatically. Many people spent a great deal of money on milk quota as a result. The Minister and Senator Mansergh referred to working through the problems with the farming organisations. Perhaps that will happen but a considerable number of people have been burnt due to the bungling on this issue. In fairness, this bungling was not just by the Minister but also by her predecessor. Nothing has yet been resolved on this issue.

I agree with Senator Mansergh with regard to stallion fees. There is a need for the introduction of a new scheme to ensure the importance and value of the horse breeding industry are protected into the future. I would support such a measure.

The sugar industry should be mentioned. There is little solace in this agreement for farmers who were affected by the effective wipe-out of this farming sector, something that has never previously happened in this country. The Government and, more significantly, Greencore had a part to play in the downfall of the industry. The amount of the compensation package for producers is not sufficient. Greencore is also unhappy about the share it received but it will reap a rich dividend in terms of the value of the sites that were effectively handed over to it by the State when the sugar industry was privatised.

I am not particularly worried about Greencore. However, the value of the compensation awarded to the producers is not enough. It is also unacceptable that the producers' compensation will be taxed and I urge the Minister to do something about that. The initial allocation of compensation to the growers should have been far more significant.