Poverty in Ireland-The politics of poverty

SMALL FARMERS have been the predominant political force in Ireland for sixty years. At the end of tl1e nineteenth century the British government instituted a policy of encouraging the development of small titleholders in land. It rightly foresaw that they would be the conservative backbone of Ireland. By John Feeney, Dan Ruddy and Vincent Browne. Published in Nusight, November 1969.

The party which paradoxically has gained all its political strength from this policy has been the Republican party Fianna Fail.De Valera in 1932 began an economic policy of entrenchment of the small farmers in Ireland. He did this at a time when conditions were favourable with high international tariffs and depressed export markets, but the basics of his policy remained in paractice until the 1960's.

The government after 1932 followed four lines in attempting to make Ireland a country which was made up of small farmers and manufacturers. It strengthened the powers of thc Land Commission which increased farms of fifteen to twenty acres to thirty to thirty five acres. It made the gains of the small farmers under Balfour less financially crushing when it successfully attacked the Land annuities, and it introduced policies of protection and subsidisation for the products of small farmers and manufacturers.

Products such as beet received a price two and half times that of the international price and wheat was heavily subsidised. The government introduced penal tariffs on the importation of clothing, furniture and various other goods. Small manufacturers received large State grants in order to set up in rural areas.

The in1mediate problems entailed in this policy were twofold. Only a minority of small farmers increased their production of subsidised products and while products were diversified, the quantity of agricultural produce in most fields fell by 10-15%. The home market was flooded with an excess of expensive minor textiles, migration to larger industrial centres was diminished and there was a scarcity of many protected goods and of raw materials for the building industry.
But the long term effect was to create an Irish economy that allowed emigration and poverty to exist hand in hand. All effort was directed towards consolidating the power of thc small farmer and the finance for this was taken from the industrial working class. The cost of living in the 1930's rose nearly twice as fast as in Britain. In the first period of De Valera's reign the national average income rose from £60.1 to £60.3 in 1938. In Dublin it rose from £100.4 to £122.1 in the same period. Our national income per head fell to a mere 49% of the British one. This was occasioned by galloping inflation. The cost of home manufactured goods was often too high for most people and Ireland developed one of the highest indirect taxation systems in the world.
De Valera paid for the subsidies by raising the income tax on industrial workers and by taxing cheap consumer goods. He lowered taxation to a minimal point on farms of all sizes, introduced grants on favourable tcrms and minimised rates on agricultural land. This had the disastrous effect of creating an economic hostility between town and country and a ridiculous system whereby the peasant petty bourgeoisie and the Fianna Fail small capitalists depended on penal taxation of the urban population. This process was repeated after the Thirties, even during the War, and got worse. In the post-war period the crippling cffcct of the high cost of living which had been created by the client party of the small farmers not only meant that most industrial workers were always living in marginal poverty (in 1950's over half the industrial labour force depended on money from relatives working abroad) but it rebounded on the small farmers themselves.

Small farms had ncvcr fully employed a whole family. There was no large manufacturing centre for seasonal, migratory labour from the countryside. The high cost of living meant that most farms were on the edge of penury and the Land Commission did not attempt to enlarge farms beyond the level of marginal bankruptcy. Farms between 3D-50 acres were created and an extra 10,000 of this sort have been created by the Land Commission in the last twenty years.
The number of small holdings in Ireland have not decreased significantly but the agricultural labour force has. 37% of the labour force left the land in the 1930's, about 218,300 people, mainly from small farms. Significantly the number of people over 65 who own farms has increased in thirty years from about 20% to 38%. Tariffs once again meant that in Dublin there was no large export manufacturers except of beer and biscuits, and most of the agricultural movem;:nt from the land had to go abroad. Only the wealthicr offspring of slightly larger farmers remained in Ireland and comprised the membership of the Civil Service. In this manner has a group becn destroyed by its own political creation.

Politics and the large farmer
Thc main source of Ireland's unique poverty and depopulation so near to easy markets has been the failure of succcssive governments to tackle the land problem. An inordinate amount of State finance in agriculture has not achieved comparable growth. In 1939 the State spent £4,315,000 on agriculture while in 1963 it sp.::nt £37,318,000, a rise of 850%. But the comparable rise in the value of products has been only half that to a total of £172,476,000. The State failed to tacklc the problem of primogeniture land holding. Even a huge amount of propaganda has failed to force many aged farmers to make improvements And furthermore the State has failed to attack the cynical use of the plight of the small farmer by the big landowners. There are over 30,200 farmers holding over 100 acres in'Ireland who receive benefits in taxation, grants and rates. They are the most significant producers in Ireland and each unit makes a profit annually of at least £1,750. Yet this group does not pay a significant amount of capital into the exchequer.

Furthermore, their efficiency is limited. In 1957 farms of 5-50 acres all earned £20 per acre or morc, on average, while farms exceeding two hundred acres earned £15.6 an acre. This comes to over £3,000 sufficiently large a sum to be a disincentivc for efficiency.

This shows the hopeless imbalance in our agricultural policies which, though dominated by small farmers, in fact help the larger farmers and create high inflation in an economy where the working class has never been large enough to subsidise such expenditure.

Such economic policies have ensured that our State has never been able to afford a proper welfare system. Indeed the State could never even afford to finance a proper educational system, and depended on the wealth of the Catholic Church to provide a private enterprise alternative. Pensions in Ireland have always been among the lowest in Europe. Unemployment benefit always took up the most significant section of the welfare budget, but due to the high rate of unemployment it was never very generous a personal basis. In comparison with Great Britain, Irish unemployment benefits have always been the worst section of our welfare system.

Priority to foreign investment
State expenditure in the bourgeois era of Irish economics has risen in the field of social expenditure but the percentage of government funds spent on it has diminished by about 6%. Only in the field of Education where the needs of industry have required a different orientation has the ratio of State expenditure risen. The government now not only expends a good deal on agriculture but has channelled huge amounts of capital into incentives foreign investment, and for an export drive overseas. The influx of foreign capital has ameliorated the problem of a continually depressed industrial sector but the only incentive to foreign investment remains our high unemployment rate combined with a certainty of readily available migrating labour.