Income set to dominate the conversation at the National Ploughing Championships

This week will see tens of thousands of farm families attend the National Ploughing Championships in Tullamore — an event that celebrates rural Ireland and demonstrates just how important agriculture is to the social and economic fabric of rural communities.

A vibrant rural Ireland is dependent on a strong agriculture sector in each county, providing employment and generating output not just in farming, but in the thousands of regionally-based jobs dependent on and linked to the sector. The Government must keep that to the fore in framing next month’s Budget.

Budget 2017

Farm families are under serious pressure as cashflow tightens heading into the autumn. The Government must use Budget 2017 to take funding and taxation decisions that will alleviate farm income difficulties and underpin the longer-term development of the sector.

Having experienced a reduction in funding to the agriculture budget of almost 40% during the downturn, there must be an increase this year for important farm schemes. We expect Agriculture Minister Michael Creed to fight for this at the Cabinet table.

Our expenditure priorities for farm schemes are:

  • Funding of €250m for GLAS and other agri-environment schemes;
  • More funding for ANCs;
  • €50m for TAMS II and much quicker approvals;
  • Re-opening of Beef Data & Genomics Programme, with €25m extra funding;
  • Increase rural social scheme places.

Farm Assist

Farm Assist is a vitally important scheme for low-income farm families, particularly in a year like 2016. We welcome the commitment to a review. The income and child disregards that were abolished in recent years must be reinstated in this year’s Budget.

Budget 2017 also provides the opportunity to address ongoing challenges in farming through the taxation system. Income volatility is a real challenge. The barriers preventing more farmers from using income averaging must be removed as a priority. A more targeted and individualised volatility scheme is required.

Taxation measures

On the subject of taxation, IFA has proposed that:

  • More flexible income averaging to cope with volatility and inclusion of farmers whose spouses have self-employed income;
  • Earned income tax credit must equal PAYE. Extension of CGT farm restructuring relief;
  • No agri-diesel increase.

Last October’s budget finally saw the first steps in removing the discrimination of the self-employed in the income tax system with the introduction of the earned income tax credit. We recognise the commitment in the Programme for Government to increase this to match the PAYE credit, by 2018.

However, IFA believes the Government should equalise the credits fully by 2017, which would give a direct cashflow boost to farmers and other self-employed.

Low-cost credit

Farm income difficulties are being compounded by a clear market failure in the Irish financial sector. The lack of competition and flexibility within that sector is affecting farmers’ ability to secure finance at a reasonable cost IFA has identified clearly that the Government, and Mr Creed, must deliver alternative sources of lower cost long and short-term funding for farm enterprises.

The €11.1m funding allocation for dairy and other livestock farmers agreed by the EU in July must be matched by national funding. This must be used to help farmers with their cash flow difficulties.

The minister must not lose sight of the need to allow farmers in all sectors to convert their accumulated merchant credit, utility, superlevy and other bills into low cost, short term loans.

This type of loan package, based on the €15,000 state aid de minimis rules, has been proposed by IFA earlier this summer. While the response from the minister has been positive, the time for delivery is now.

All payments for farm schemes must be made on time, in line with the deadlines set down in the charter of farmers’ rights. This is particularly important in a year when farmer’s cashflows are under stress.

High input costs

High input costs are also a challenge to viable farm incomes. The Government must take a strong stance at EU level to support the IFA campaign to remove the tariffs and duties on EU fertiliser imports. This would deliver €50m-€70m for Irish farmers.

This is of particular importance for tillage farmers, who, through a combination of low prices and yield are facing an income drop of up to €100m this season. There is also an urgent need to develop a national certification scheme to promote Irish grain.

Finally, all payments for farm schemes must be made on time, in line with the deadlines set down in the charter of farmers’ rights. This is particularly important in a year when farmers’ cashflows are under stress.

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