The Farmers and Land Tax

"Joe Rea seems to regard socialism as any transaction in which the state tales money from the farmers; when the farmers get money from the state, that's what he calls free enterprise" - Ruari Quinn

Story by Olivia O'Leary. Additional reporting and research by Mark Brennock

THERE will be a land tax, confirms Labour Minister, Ruairi Quinn.

It will be related to the adjusted acreage basis and will bring in substantially more tax than farmers are paying at the moment, he says.

And for it, he declares, grateful farmers should thank IFA President, Mr Joe Rea.

"There was always a distinct probability that some form of land tax would be introduced in the National Plan,. but Joe Rea's hamfisted intervention has made it a certainty," declared Ruairi Quinn, to Magill this week.

Quinn was bemused. Labour had naturally expected an interparty wrangle with Fine Gael on the land tax issue.

Instead they watched Joe Rea and the IF A go in and do their work for them. Heavy-handed lobbying and a demand for public pledges brought back too many memories of the abortion amendment campaign to government deputies. They were getting fed up with being bullied. The Taoiseach actually began to fumble for his self-respect.

"The IFA put it up to Fine Gael to prove they were not paid lobbyists and they made us more determined than ever," says Quinn. "If I was a farmer I would question the value I was getting from my IFA contributions."

Quinn said he could not recall any parallel to the IFA's tactics. "They were heavier than the amendment campaign tactics. I never recall a group of pro-amendment people coming in the form of a delegation to any TD asking him to sign a public declaration, or else. And they targetted in on Fine Gael TDs. It's the heaviest form oflobbying that we've ever had."

Though it's not yet clear whether the cabinet will decide to apply a flat or adjusted rate of tax, Quinn says that "any land tax at this stage is going to be related to the adjusted acreage basis and the yield will be substantially higher than currently received."

Quinn argues that the tax gives an amount of leeway since it assumes a certain level of productivity from a farm. A hard-working farmer who produces more than that level will not be taxed on the extra, unlike the PA YE worker who is taxed on anything over and above his or her basic income. The tax fulfills Labour's promise to replace the funds lost to local authorities by the abolition of the PLV system and farmers rates. "It will also be more socially and locally acceptable since it will be collected and spent by local authorities."

Asked to comment on Joe Rea's assertion that Labour was trying to introduce socialism by the back door and that most Irish people had voted for "nice prudent middle-of- , the-road politicians," Quinn said: "Joe Rea seems to regard socialism as any transaction in which the state takes money from the farmers; when the farmers get money from the state, that's what he calls free enterprise."

SINCE death and estate duties were abolished in the early seventies farmers have fought. a fierce and mostly successful battle against every new tax successive governments have tried to impose on them.

Farmers wreaked a fierce revenge in the 1977 election for the wealth tax imposed by the 1973-77 coalition governnment. The 2% farm levy imposed by George Colley as Minister for Finance in 1979 brought in only £12 million and survived for less than a year. It was chopped due to farmers pressure in October 1979. The resource tax introoduced in 1980 brought in only £700,000 though it was meant to bring in an annual £7 million and it was abolished by the incoming 1981 coalition government.

Finally, there was the total abolition of the rates system as a result of the court decision declaring the Poor Law Taxation system unconstitutional.

As a result, farmers as a group, who had risen to pay 13% of their income in tax by 1980 are now paying only 3.3%. The equivalent accepted figure for the P A YE group is over 18%.

So from farming income of £918 million forecast for this year, farmers will pay only £30 million tax.

According to the Irish Farmers' Association, all fanners are looking for is the opportunity to pay their fair share of tax, and they say that the oft quoted statistic that farmers only pay 3.3% of their income in tax is misleading. The majority of the country's 140,000 farmers earn less than heir tax free allowances, and so are outside the tax net.

Those who are inside the tax net pay a much larger proporrtion of their income than 3.3%.

A further 30,000 farmers tax returns haven't been proessed , says IF A General Secretary, Michael Berkery, because of an industrial dispute within the Revenue Commmission. This means that farmers are getting away without paying tax but through no fault of their own, he claims.

Farmers have seen no reason to complain about being victims of the tax system in this instance, however, and the fact remains that for the £30 million expected tax take this year, the state has allocated over £360 million for a series of grants and services to farmers.

Among these are:

Advisory services from ACOT, the Irish Cooperative Organisation Society, and commercial firms with farming interests, eg, the sugar company.

Higher Education courses in Agriculture, Horticulture, Dairy Science, Vet medicine and forestry - also a creamery management course.

Research from An Foras Taluntais - they analyse soils, fertilisers, water plants and pollutants for farmers. They produce a wide variety of publications for farmers.

Farm modernisation scheme - It gives financial aid to farmers for land improvement and for certain farm builldings and fixed assets.

Drainage - Farmers in the West get 70% of the cost of draining their land paid.

Western Development Programme - Grants for fencing, roads, land reclamation, sheep dipping and shearing, planting trees, cheap electricity, private group water schemes.

Also available are interest subsidies for farmers in finanncial difficulty; exemption from stamp duty under certain conditions; free soil testing; performance testing of bulls; various aids for keepers of cattle, pigs, horses sheep and poultry; quality control for all agricultural products; disease eradication schemes; subsidies for planting grass.

The Land Commission prepares maps, gives housing loans.

The ACC gives loans.

There are other miscellaneous aids from the Department of the Environment, the Land Registry, Ordnance Survey, Met Office and Forestry Department.

Some of the. services and facilities to farmers, which are listed in the Department of Agriculture booklet Specially For The Farmer include: for every 100 grams of perennial ryegrass that a farmer plants, the farmer gets £17.63. For Italian and hybrid ryegrass the farmer can only get £10.60 for the same quantity. Department officials will call to a farm and weigh all the pedigree beef calves for a fee of £15 per annum.

High class British rams are obtained annually by the Department and leased to farmers. Grants are given to groups of farmers to get facilities to dip and shear their sheep.

The Department of Agriculture also leases British Boars to service Irish sows. The Veterinary Research Laboratory in Finglas will post semen to the farmer belonging to Large white and Landrace boars. Alternatively it can be sent by public transport or collected by the farmer.

THE IFA began to gather its troops against the present land tax proposals after various Labour Party signals in early August.

On the Sunday following the dismal mismanagement of the food subsidies issue, Senator Timmy Conway of the Labour Party went on RTE's "This Week" programme and spoke about the imposition of a land tax. An Urban and County Councillor from the Naas area, he was conscious of the deteriorating state of the roads from lack otIocal authority revenue from rates, and the effect this was having on the employment of County Council gangers and maintenance men.

The following Sunday, Joe Rea first broadcast his intention to lobby individually every Fine Gael TD on the matter. IF A branches and then County executives had met and expressed their concern on the issue. It was a point on which Rea could hardly afford to be seen to be lagging beehind his members. On August 30, the taxation committee of the IF A met and discussed the lobbyists charter which was later sent out in letter form to every branch. The letter told branch members to ask for an absolute and unambiiguous commitment that there would be no land tax and promised to make it clear who had given such a committment and that those who hadn't "were hostile to the interests of the farming community."

Donal Cashman mightn't have handled it that way but Joe Rea is, to put it mildly, an abrasive man and not all that far removed from the Joe Rea who, in a famous phrase, told a 1979 anti-levy protest meeting in Portarlington that "the gloves are off" .

The taxation committee might have baulked a little at the tone of the letter that was subsequently issued, but the content was basically what they had agreed.

What they hadn't counted on, however, nor had Rea, were the internal political factions within the IF A in areas like Cork. There have long been bitter Fianna Fail-Fine Gael splits within the large organisation in the Cork area and it was felt that some members may have taken the opportunity to settle old scores. In any case it was Fine Gael TDs from Cork and indeed from Galway who complained loudest and most damagingly about the pressure they were subjected to.

By the time the Fine Gael parliamentary party met to discuss the matter, feelings were running so high that back bench dissatisfaction with the government was almost forgotten and FitzGerald won an amount of lost ground by redirecting backbench anger towards the IFA.

AND these are the sort of stories that depuuties had to tell.

Bernard Allen The chairman of the Cork County Executive and a member of the IF A national executive called to see him on Friday night, 14 September. They had an "amicable discussion" according to Allen. They said that they had a directive from the IF A chairman to get a clear indication, yes or no, on whether or not the TD was opposed to the land tax. Allen said he would consult with people first before making a decision.

On Monday morning he received a telegram saying that because of his failure to give a commitment, the IF A were assuming that he was in favour of the tax, they would innform his constituents of his stance.

"I took it as a threat and an attempt at blackmail", says Allen. He sent a telegram to Rea, asking to meet him. He told Rea that he (Rea) was uninformed of social condiitions in urban areas, and invited him to come to his connstituency and see the poverty that exists in urban areas that doesn't exist in rural areas. Rea is going on October 13. Rea also told him that Fine Gael was being influenced by a small left wing rump, and that Marxist/Leninist innfluences were being brought to bear on the Fine Gael party.

Fintan Coogan He was invited to a meeting with the IF A to discuss five topics. The land tax was last on the agenda and was the major point of concern. He refused to give a commitment on it, saying that he didn't know the details of the proposal.

They asked him again and he told them he did not like the -ay their campaign was being run, An IF A member was raking notes throughout the meeting.

In the papers the next day the IF A announced that Coogan was going to vote against the land tax. Coogan says this is misrepresentation of what he said. "I'm not going to go down the road with pressure groups, we've been down that road before with the amendment."

Frank Crowley The Cork IF A asked to meet him, and came to see him on Saturday 15 September. He told them that he was opposed to double taxation, that he'd oppose it at the parliamentary party, but that he wouldn't make a public statement. On Tuesday he received a telegram from the IF A, saying that they were disappointed at his failure to give a commitment to oppose the tax. The telegram pointed out that a lot of his constituents were farmers, and that they: would have to let his constituents know that he was in favour of the tax. '''1 don't like receiving threatening telegrams," says Frank Crowley. Joe Rea later said that he didn't know that these telegrams were being sent out.

Jim O'Keefe On Friday 14, two IFA people arrived in his clinic in Clonakilty, having joined the queue. They raised the land tax question. He said that if there was such a proposal he'd voice the views of his farming constituents at the parrliamentary party, but under the circumstances, he couldn't give a commitment to vote against the measure as he hadn't seen it. "On Wednesday I found myself on the front page of he Cork Examiner being pilloried by the IF A, and I found the contents of a telegram which I subsequently received." The telegram expressed dismay that he had refused to commmit himself, and went on to assume that he was in favour of such a measure and said that they would inform his connsziruents of this.

Three or four farmers also made contact with his home, and said that they would be reporting on his attitude to Joe Rea. and that some list of TDs unfavourable to farmers would be published in the Farmers Journal.

Willie O'Brien told the IF A he would make no commitment until the party meeting. Then he saw his name in a list in the Irish Press of eleven deputies who were opposed to the land tax. He immediately got on to RTE who broadcast his denial of this report.

Michael D'Arcy Met the IF A Saturday 15 and refused to make a statement. He was told that his two fellow Fine Gael TDs - Ivan Yates and Avril Doyle - had agreed to a statement - he still refused. At a meeting in Dublin on Monday, he received a phone call from the secretary of the IF A in Wexford, who again told him that his two constituency colleagues had signed, and that if he didn't his name would be on a list in the Farmers Journal the following week. He signed.

Eddie Collins Eddie Collins is believed to have been phoned by the IF A and told that his constituency colleague and Agriculture Minister, Austin Deasy, had declared him self against the tax and that Collins should be careful in the position he adopted in case he isolated himself. He was also told about the list in the Journal.

The IF A was so dismayed by the press coverage given their campaign over the week-end, much of it based on the retelling of their experiences by angry TDs, that they've decided to give a special briefing to the press this week. The briefing is planned, not for the usual agriculture correspondents, but for the political correspondents who have the ear of Leinster House.

It would seem however, as though it's a little late to change the picture. The Labour Party is quite confident that the land tax is now a part of the National Plan. Mr Rea might as well put his gloves back on. •