€150m loan fund surprise in budget

IFA president Joe Healy said the budget responded positively to IFA’s farm income campaign, with low-cost loans, increased funding for farm schemes, reversal of Farm Assist cuts, and flexibility on income averaging.
€150m loan fund surprise in budget

ICMSA president John Comer said farmers generally consider Tuesday’s budget as steady and solid, but he warned some measures could represent bad value.

The IFA president welcomed the €150m cash flow support loan fund for all farmers.

He acknowledged the €69m increase for GLAS, to €211m, for 50,000 farmers, the new €25m sheep welfare scheme (€10/ewe), and the re-opening of the Beef Genomics Programme to new applicants, with funding of €52m for next year.

Funding of €50m for TAMS, €111.6m for forestry, and €5m for horticulture have been confirmed. However, he was disappointed restoration of ANC funding is delayed.

He particularly welcomed reversal of Farm Assist cuts, plus the across-the-board €5 per week social welfare increase, and 500 extra rural social scheme places.

Mr Comer said changes to the USC, and extension of tax credits for self-employed, are general benefits.

He also welcomed extension of the CGT farm restructuring scheme to 2019, the higher CAT tax free threshold, capital allowances for energy efficient equipment.

But he said the “Step-Out” facility in income averaging is at best a “niche solution” irrelevant to most farmers, who would have been far better served with a farm management deposit scheme, to address “destructive” income volatility.

Step-Out allows farmers on income averaging, in a very poor income year, to pay only the tax due on the current year. The deferred tax liability will be payable over subsequent years. This measure will be available immediately.

Mr Comer said the €11.1m EU crisis fund is diverted into the low interest loans instead of being utilised in a flat payment per dairy farmer which ICMSA proposed.

CGT relief for farm restructuring is extended to 2020. The increase in group thresholds for exemption from CAT will increase the value of farms that can be transferred, through Agricultural Relief.

Payments under the raised bog restoration incentive scheme will be exempt from capital gains tax.

At an estimated annual cost of €9m, the flat-rate addition for farmers not registered for VAT is increased from 5.2 to 5.4%.

Among measures to support industries challenged by Brexit is a Department of Agriculture, Food and the Marine spending boost of €119m.

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