IFA wants trend of cuts to schemes reversed

With details of Budget 2014 to be announced in eight days’ time, the IFA’s campaign has emphasised to ministers and Government TDs the importance of investment in farm schemes and 50:50 co-financing for the next Rural Development Programme, which will run from 2014-2020.

IFA wants to see a reversal of the trend in recent budgets of cuts to farm schemes. The focus for Agriculture Minister Simon Coveney must be on new investment for the sector. Our clear message is that every euro spent is good value for money and a major stimulus to jobs, exports and the economy.

Despite a difficult economic environment in our main export markets, there has been an increase in food exports of 8% during the first half of 2013. The minister must hammer home this message around the Cabinet table. Underpinning this growth is a primary agriculture sector that is delivering a high quality, sustainable raw material to the food sector.

Agriculture contributes to economic activity in every part of Ireland and is of particular importance in the rural economy. However, farming remains a low-income sector and the importance of farm schemes to farm income and production must not be forgotten.

A combination of dreadful weather conditions, which continued into spring 2013, soaring input costs and the resulting fodder crisis impacted heavily on profitability and output.

In addition, the impact on farm incomes from excessive budget cuts and cuts to farm schemes is challenging the viability of thousands of low-income family farms.

Farmers at local level through the IFA county executive and branch structure have been driving home to TDs the importance of maintaining farm production for the rural economy.

IFA analysis of the Government’s figures shows the dis-proportionate impact on the agriculture sector of successive budgets. Since 2008, the total Agriculture spend has been reduced by 41.2%, compared to a reduction of 12.6% for total spending across all Government departments. In fact, we are now back at 2003 levels. Rising input costs are a constant threat to viability, and we will continue to push for greater competitiveness. The burden of taxation on farm families has, in common with other sectors, increased significantly. Marginal rates of tax are now at a very high level, and lower income farmers have been negatively affected through the introduction of the USC and a reduction in tax credits.

In addition, increases in the rates of capital taxes and reductions in tax-free thresholds have added to the costs of investment and asset transfer. IFA believes that, to encourage investment and enterprise, and to support overall economic recovery, there cannot be any further increases in personal income or capital taxes.

IFA fully supports the objective of maximising the contribution of the agri-food sector to the Irish economy and acknowledges Government action in recent years 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 the ongoing development and growth of the sector.

* John Bryan is president of the IFA