Budget 2024: Key measures for farmers in this year's round-up
Minister McGrath also said he would increase the maximum aggregate lifetime limit of a number of farm-related reliefs to €100,000
Measures to improve farm succession pathways and farm safety were among the key announcements for farmers in this year's budget.
Announcing the changes, which include accelerated capital allowances for farm safety equipment and a five-year increase to the upper limit on retirement relief, Finance Minister Michael McGrath said: “Farming is the lifeblood of rural communities across Ireland. A number of important agricultural tax reliefs are due to expire at the end of this year. These reliefs provide important supports to our young farmers and the farming sector generally."
Among these are the extension of consanguinity relief - a measure which supports the transfer of farms from one generation to the next.
The minister announced he would extend this relief for a period of five years - a move he said would provide "more certainty to farming families as they plan for the future".
These reliefs include the Young Trained Farmer Stamp Duty relief, Stock relief for Young trained farmers, and the relief for succession farm partnerships. The maximum amount of enhanced stock relief for farmers who are partners in a Registered Farm Partnership will be increased from €15,000 to €20,000 in line with EU regulations.
The Land Leasing Income Tax Relief will be amended so that it only becomes available when the land has been owned for seven years so that it is better targeted to active farmers.
Minister McGrath also announced changes to Retirement Relief specific to the agricultural sector.
Making the announcement, he said: "Retirement Relief supports the intergenerational transfer of businesses and farms and works to ensure their smooth transition so that they continue to play their important role in the Irish economy.
"In line with Government policy on the age of retirement, I am extending the upper age limit for the relief from 65 until the age of 70. The reduced relief which was available on disposals from age 66 onwards will now apply from age 70."
The changes will come into effect from 1 January 2025 so as to allow for an appropriate transitional period. A limit on disposals to a child up to the age of 70, as recommended by the Commission on Taxation and Welfare will also come into effect.
IFA President Tim Cullinan said the budget of the Department of Agriculture, Food and the Marine (DAFM) is reduced from €2.14bn to €1.94bn, a 10% reduction.
“Farmers will see little or no ambition in this Budget and will be frustrated to see the farming budget reduced while other Department’s budgets have been increased,” he said.
Elaine Houlihan, national president of Macra na Feirme, an organisation representing 10,000 young people from rural areas, was among the first to welcome the announcements.
Ms Houlihan said they "provide recognition that a suite of measures, including taxation, that address generational renewal in Irish rural farming communities is vital in ensuring that our system of family farms is passed onto the next generation".
Ms Houlihan said increasing the lifetime threshold for young farmer reliefs under the EU Agricultural Block Exemption from €75,000 to €100,000 is a "positive step forward" for young farmers and better reflects the reality of modern farming.
Increasing land leasing tax reliefs to a minimum of seven years, from five years, improves land mobility for young farmers, and the continuity of this important relief to provide certainty around access to land for activity farmers is welcome. Finally, to recognise the role of farm partnerships, the Minister will bring registered farm partnerships into line with EU regulations by increasing stock relief from €15,000 to €20,000.
Houlihan added: "While these reliefs provide important supports to our young farmers and the farming community more generally, more focused supports are required.
"Young farmers face many challenges, such as access to land and finance, which is now compounded by changing climate, inflation and rising input costs as we move collectively to a more environmentally aware future.
"To increase the attractiveness of working in agriculture, we must look at different measures in a complementary way, such as taxation and incentives that enable land transfer. Generation renewal needs both the younger and older generation to work together, and Macra’s proposed pilot Succession Scheme specifically promotes and rewards intergeneration cooperation."
However, other were less impressed. Irish Creamery and Milk Suppliers Association president Pat McCormack said that the initial response of farmers would be one of "confusion and disappointment", branding the announcements today as "nothing burger" for Irish farmers.
"[There are] very serious problems in the sector that were not just there to be solved – but had in most cases been caused by the Government itself," McCormack said.
“There’s nothing here that shows the Government even understand the scale of problems – still less want to solve them. All we seem to have got is a rollover of existing reliefs with some minor technical adjustments”, said Mr McCormack.
While noting that more announcements will be made later today, the ICMSA president said that the Government had "again" completely failed to recognise both the income and regulatory pressures on sole trader farmers, citing the fact that only €3bn of the new Infrastructure, Climate and Nature Fund will be devoted to climate and nature measures between now and 2030.
"This Government – like so many of its immediate predecessors – was content to point at alleged agri-environmental problems while shying away from the kind of on-farm funding that would deal with them," he said.
"The perfect example of this was the absolute vacuum around the consequences of the recent nitrates decision to reduce to 220kg of N that will – beyond any dispute - wipe out many small and medium-sized dairy farmers."
