20 May 1999 Edition
Investors profit from West's impoverishment
The West - A quiet rural setting for tax concession investments
Where is state investment in fishing or sustainable farming for Achill?
Many claim this coastline as the most beautiful of all - a mile of silver sand, a landscape dotted with the small cottages of the many sheep farmers whose flocks' hardy little black faces are on a 24-hour job culling the scant grass left to them on the bare and lonesome mountains that run down the strange cliffs to the sea.
To some, especially of the diaspora, forced through poverty to leave, it's paradise; to others, it's an investment in holiday home settlements for tax rebates.
Phil McFadden, who lives in Achill, is generous and wise to what they are doing to her homeland, to the survivors of generations whose sons went to Cleveland to seek a living. ``Look what they are doing here - building rows of little houses which cost over £100,000 - just for tax rebates. These houses aren't meant for local people at all.''
Achill is one of the 15 resort areas selected around the seaside for the `Pilot Tax Relief Scheme', which allows investors and developers to build in these resorts and reclaim the cost of the development against tax. It's a condition of getting the tax rebate that the house is let for a part of the year.
It is not development for local people, but for investors who get a property investment which costs them nothing, and they come here because it's a mirror of the old days in Ireland. The peace and quiet of the rural setting is the attraction and this exists precisely because there is no viable livelihood for local people - apart from the black face.
``Mayo people are proud. They try to hide their poverty, and they share what little wealth there is,'' says Phil. ``But it's the very paucity of the living here which makes the tax concession investments so attractive to those who buy up the properties. ``They are making the rich rich by keeping the poor in poverty.''
Achill Industries, owned by Mr. and Mrs. Robinson, is one of the developing companies, which has built 22 houses overlooking the Keem Bay explicitly to capitalise on the Section 48 tax concessions. Under the Pilot Tax Relief scheme for Certain Resort Areas, a developer can write off double costs against tax. Mr. Robinson says the building costs of each Toblerone house was around £45,000, ``but they sold like hot cakes. We couldn't believe it. Prices, which started four years ago at £50,000, have now gone to £100,000.''
Now there is an even better scheme, with apartments at £75,000 apiece. Under Section 23, an investor can write off tax against income from that investment and all other sources of income. The buyers are all invited to take a share in the Achill Club Leisure Centre - a new project ``which we are all very excited about'', says Mr. Robinson of Achill Industries.
Achill people aren't quite so excited. The Centre will offer all the `necessities' from sauna to pool to jacussi and so on with the cost of the original investment written off in 10 years. All their income is tax free. An investor gets a stake in an income-generating property for absolutely nothing. It doesn't apply to locals - they've no income tax to write off.
Tax free income costs us £110 million
Rita Meehan of the Department of Finance says that the scheme, which started four years ago, has cost the government in tax foregone some £110 million, but, she adds, ``that would be a gross underestimate. We don't have the updated figures''. The scheme is scheduled to end in December. Could it be renewed? ``At the moment,'' she says, ``it is being reviewed. I couldn't coment on whether it will be renewed. It was, after all, only a pilot scheme.''
Where would £110 million have done for Achill? What about real income foregone through lack of employment?
``What is needed here is jobs'' says Phil. ``Jobs which make it possible for us to survive in our community, not investments which enable those who don't live here to make money out of our impoverishment, our `quiet rural setting'.''
Denying Mayo Fishing?
``Look along the coast of Mayo, not a harbour, not a fishing boat larger than a rowing boat,'' says Phil. ``Nothing was ever done to allow Mayo people to exploit the offshore fishing grounds. Instead, they were opened up through the EU fishing agreements to other member states, like Spain, with their huge fleets. Twenty years ago our fishing could have been developed. Now the fishing is decimated. EU fishing policy worked to favour the largest boats. We didn't have any boats at all, or anywhere to pull them in, and no processing plant for fish products.''
Denying Farmers a living?
Farming is the same story. At the start of the CAP, incentives to farmers were based entirely on volume. Sheep headage payments and premia pushed the flock size from 4 million sheep in the early 1980s to 8.4 million by 1995. The sheep had to eat, and so, predictably, this had an immensely damaging effect on the environment, with overgrazing and erosion
Then into the 1990s, the CAP emphasis was towards reducing output, and development of low intensity, sustainable farming, but there was no government regulation imposed on the massively inequitable distribution of the EU CAP money, which averaged £911 million between `92 and `96. No policy was introduced to redistribute this towards the smaller farmers, or to arrest the disgraceful 80:20 split, whereby 80% of this money went to the top 20% of producers,'' says Joe McHale, a Sinn Féin candidate in Castlebar.
``And now we're into the Santer package, CAP 2, with inexorable reductions in support prices. Export subsidies are down by 36% and domestic support down by 21%. Direct payments, in the case of cattle and sheep have averaged 100% of farmers' incomes - that means it's only the cheque in the post which represents any income above costs to farmers. Approximately 40% of all farms have an income of less than £5,000 and rely on `Own resources' for their investments. You can be sure Mayo farmers are in that 40%.''
But in Mayo the farmers have no second jobs, because there aren't any going. In the situation where you are working only for the cheque in the post, which in any case gets deducted from your farmers' dole, when the cheque stops coming, then your inclination as a farmer is to stop farming altogether, and this is what is happening, especially now after the terrible year which hit farmers with the rain and the storms,'' says Joe.
Did the REPS scheme, and the heritage and organics programmes offer any respite to small farmers, schemes which offer payment on acreage to help fund environmental protection? Eanas McNulty, a small farmer on Achill, lives in a beautiful farmhouse in a little oasis of an oak grove, that only County Mayo has, below the mountain. He explains how just to get a farm plan to join REPS costs £300 - and that is before you start. If you are thinking of going organic, then your farm plan will cost you £900. Where does a small farmer find that kind of money?
``You would have gotten a lot of farm plans for £110 million,'' says Sinn Féin EU election candidate Seán Mac Manus. ``It would have helped a great many small farmers, with no other means of earning a livelihood, into developing agriculture, undoubtedly viable on the small Western farms, which command premium prices of between 25% and 40%. While the government and the Irish Farmers' Association twitter together about 1p here or there on a CAP price for livestock, no one bothers to help farmers to get real returns. This is what we need MEPs to work on - so the West benefits,'' says Mac Manus.
``£110 million would have bought a lot of advice to Bertie Ahern's government to let them all know that organic farming not only might preserve the beautiful landscape of the West, but would fit Ireland into a niche agricultural market, where consumer demand is growing at 24% a year. This would pay a price to farmers allowing them to stay in farming, where competition from U.S. rancher farmers, who use aeroplanes instead of tractors, will inevitably put our agriculture out of business - with or without cheques in the post.
``Its crazy'' says Joe McHale. ``Why isn't local government helping small farmers with their farm plans? Why haven't they pushed for funding for development of organic farming? It means their survival, but also the survival of agriculture in Ireland, if we can tap into this specialised market which commands the premium price?''
Eanas says it is the difference between a £5 if you are lucky, for a little sheep, against an organic sheep which might sell at the premium price of 40p a pound. As it is, farmers are selling their sheep at the mart and instead of a cheque they get a bill from the butcher to cover the £5 cost of killing them.''.
Where is state aid to help small farmers who have been starved of capital over the previous decade of farming, to help them go organic? ``Why, for example, is the farm plan not funded?'' asks Seán Mac Manus.
Why didn't councillors campaign?
``Why has there has been no help to encourage small farmers into the organic farming, when this might mean sustainable small agriculture for the foreseeable future? Where have political representatives been all these years?'' asks Joe. ``These are the initiatives which local government should have taken on board all across the West. Local authorities needed to bring pressure to bear upon the Leinster House government, pressure to rectify the gross inequities in the CAP and redirect the huge resources which came in under the CAP, which have served to weaken prices and small farmers, leaving them with no real alternative except to go home and go to sleep. For all its boards, commissions, and committees, the West needs a dynamic, at the local government level, to reverse the exploitation by the rich at the cost of impoverishment of the West.
``Local government has changed. It is no longer a question of filling in forms for people to claim benefits. It is up to full time political representatives to listen to the needs of the people, all of the people and to take steps to meet them, before it is too late.''
Bantry Bay Mussels grow to £7 million exports
If you happen to be travelling along the French Riviera this summer and fancy a light snack of Moules Marinières at the local Bistro, chances are fairly high that your Cordon Bleu chef will be snapping open a packet of Tim O'Leary's mussels, cold foot from Bantry Bay.
``It is a shining example of just what could have been done to provide sustainable living to people who live in the natural beauty of the West, but actually can't earn a living in it,'' says Anne O'Leary, who is a teacher but also a most committed combatant on Bantry Town Commission, for survival of the West.
``And it still can be done, if only this time around we elect people who are committed to the development of the West itself. Where did all the money which was allocated to the town, after the Whiddy Bay Disaster go? It wasn't spent on us.
``What did local authorities do to ensure these funds were spent to the benefit of our community? Not very much'', says Anne. The people of the West have got to fight for their survival and they need political representatives who are going to do this. We have to make sure that we get a slice of the cat meat from the Celtic tiger.''
Bantry Bay Mussels is just that indigenous development. It employs 70 people from the town and is building a new factory which will take on another 30. Already, exports are up to £7 million, processing 4,000 tons of mussels which are grown on 24 foot long ropes, which stretch down in below the sea in Bantry Bay.
Tim O'Leary is one of the initial shareholders who started off this very successful project. ``The only trouble'', he explains, is that it wouldn't do for everywhere on the coast, because you need shelter from the Great Atlantic Ocean, that roars in in a storm and would tear your ropes apart.''
Did no one hear of a harbour in Mayo? No, because the government never built any. Instead, they built roads for the tourists to look at the sun going down.