Funding for farm schemes must be kept at 2013 levels
Following two years of growth, farm incomes fell significantly in 2012. The main factor affecting farm incomes and profitability was the dreadful weather, which resulted in a reduction in output in some commodities and an increase in input use. The difficulties continued into this year, with fodder shortages experienced across the country, resulting in increased feed costs and pressures on farm viability.
Notwithstanding these pressures, agriculture and the agri-food sector continue to play an important role in the country’s economic recovery, with an increase recorded in both employment numbers in agriculture and continued growth in agri-food exports of 8.6% in the first half of 2013.
Since the start of the economic downturn, funding for farm schemes has been significantly reduced in successive budgets through cuts to, or closure of, a number of schemes such as the Less Favoured Areas, REPS and Suckler Cow schemes.
Within the agriculture budget itself, farm schemes have been targeted for disproportionate cuts.
With the conclusion of the CAP reform negotiations, the next seven-year Rural Development Programme will commence in 2014. The budget allocation for agriculture in 2014 must ensure that the full amount of EU funding that is available to Ireland is drawn down and that there is sufficient national funding to fully support all farm schemes. This requires a Government commitment of 50% national co-financing of EU Rural Development funding.
An estimated €290m of EU Rural Development funding is available for farm schemes in 2014, which is an increase of over €100m compared with the 2013 budget allocation. This funding will be available at no additional cost to the exchequer. The IFA is demanding that, in addition to this increased EU Rural Development funding, national exchequer funding for farm schemes in 2014 is maintained at 2013 levels.
As agriculture is the only sector to generate a significant level of EU funding, the rigid adherence to a reduction in the Gross Ceiling in the 2014 agriculture budget, given the increased EU funding that will be available, does not make sense.
A strong funding allocation is required for the agri- environment schemes and Less Favoured Areas, with increased support for the Suckler Cow herd and funding for discussion groups across all sectors. Under capital expenditure, funding must be provided for on-farm investment, including horticulture and forestry programmes, and young farmers’ supports.
The IFA supports the objective of maximising the contribution of the agri-food sector to the economy and acknowledges Government action to maintain taxation measures to support restructuring, farm investment and land mobility. In parallel with a strong CAP and funding for farm schemes, the retention of key taxation measures and introduction of new measures will be critical to continue development and growth.
This includes:
* Retention of 90% Agricultural Relief and no further reductions in CAT exemption thresholds;
* Maintenance of Pay & File self-assessment dates;
* Extension of the land leasing tax exemption scheme to encourage uptake and land mobility;
* Incentives for dairy farmers to invest in industry expansion;
* Enhanced stock relief to encourage investment across all farm enterprises.
Also, to encourage investment and enterprise, and to support overall economic recovery, there cannot be any further increases in personal income or capital taxes.
* John Bryan is president of the Irish Farmers’ Association
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