Adequate funding of farm schemes must feature in budget, says ICMSA

The Irish Creamery Milks Suppliers Association (ICMSA) has told the Government that Budget 2014 must ensure adequate funding of farm schemes as these payments are critical to low income farms.

John Comer, the association’s president, said disadvantaged areas payments and agri-environment payments must be maintained.

The ICMSA was totally opposed to any further cuts in these payments, he warned in the association’s pre-budget submission to the Government.

Mr Comer said farm families have experienced a very difficult and challenging period due to weather related fodder and financial difficulties in 2013.

It followed a severe 2012, with National Farm Survey preliminary estimates indicating that family farm income fell by 15%.

As a result of the difficulties in the past two years, many farm families are experiencing extreme financial and mental hardship.

He said the ICMSA has compiled data that sets the cost of the fodder crisis at €1bn in 2013 which equates to 0.6% of GDP at 2012 levels.

The importance of the agri-sector to export driven growth in the economy was further highlighted by the fact that the total value of food and drink exports from Ireland in 2012 was a record €9.2bn.

This represents a 2% increase on 2011 and is the first time that the value of Irish food and drink exports exceeded €9bn in a calendar year.

In this context, Mr Comer said the ICMSA believes the Government must ensure farm families are not targeted for further cuts in Budget 2014.

He said the association has proposed targeted tax policy adjustments to facilitate further growth and development in the agri-sector.

It has serious concerns regarding Government policy on capital taxes in recent budgets with an increase of 65% in the rate of capital gains tax and capital acquisitions tax since October 2008.

Coupled with a reduction of 58% in Group A thresholds for capital acquisitions tax, this represents a significant disincentive to land mobility.

Mr Comer said it is crucial that the transfer of a typical family farm can take place without incurring any tax liability.

The 90% agricultural relief must be retained to encourage timely transfer and continued viability of family farms, he said.

Mr Comer added that Irish family farms have a high dependence on direct payments and this will be amplified further given the extreme financial hardship being experienced on family farms.