IFA warns new farm income figures likely to show 20% reduction

DETAILS of farm income for 2009 due to be released next week are likely to show a reduction of at least 20%, the Irish Farmers’ Association predicted yesterday.

Its president Padraig Walshe said government cuts already imposed are contributing significantly to this situation.

He made the comments as the IFA told Finance Minister Brian Lenihan at a pre-budget meeting that investment in the productive sector of the economy makes excellent sense.

Mr Walshe said the money stays within the country and generates added value, export-led growth and badly-needed economic activity in rural Ireland.

The IFA said it highlighted the serious income situation facing the primary production sector and emphasised the need to retain fully-funded, vital farm schemes.

It pointed out that farmers cannot afford a carbon tax which would take another 1% off an already disastrous farm income situation.

Mr Walshe said the income levy discrimination against farmers as sole traders must be addressed in this budget. This year’s farm income drop comes on top of a 13% decrease in 2008. Government cuts in farm schemes amount to €130 million. They are impacting on farm income and this will be much more severely felt in 2010.

“Government support for farm schemes amounts to less than 1% of total government spending and no further cuts, extra costs or levies can be added to the sector at this time as farmers have already been disproportionately cut in previous budgets,” he said.

Mr Walshe said the proposed carbon tax would further increase farm production costs by about €17.5m a year, which is a further 1% cut in national farm income.

“I proposed to the minister that farming must be exempt from the tax because no alternative fuels are available; farmers cannot pass on the extra cost to the market and any further income cut is intolerable,” he said.

“The precedent is already established in France for example, where the Government is offsetting the carbon tax for the farming sector.”

The IFA proposed that in the 2010 budget the Government must reform the Income Levy system by applying it to the taxable income after the deduction of capital allowances, ensuring equitable treatment of all tax-payers.

The IFA said improved scale and efficiency in farming are necessary, as is access by young farmers to the sector.