Minister Michael Creed must respond to income crisis

The severe income crisis in farming needs a strong response from the new minister for agriculture, writes Joe Healy, IFA president.

Now that a new Government is in place, we need immediate action to address unsustainably low incomes on Irish farms.

IFA made detailed proposals to the political parties in advance of the general election and during the government negotiations. A significant number of the measures contained in the Programme for Government reflect the issues raised by IFA and I look forward to working with Minister for Agriculture Michael Creed on the implementation of these measures.

The new Government must also progress further measures that will secure the profitable growth of farming and the future of the agri-sector in Ireland.

Farmers need tangible measures that address these threats. 

We need the full restoration of national funding for farm schemes, stronger CAP supports, robust defence of Ireland’s interests in trade policy and climate change negotiations, action on input costs, including the cost of finance, and the opening of new markets for Irish farm produce.

Direct payments and supports

With farm incomes under pressure in every sector, the role of the CAP and direct payments in supporting farm families was never more important.

There can be no further cuts to payments. Delays in payments will not be tolerated this year. Timely payment is critically important for farm incomes and cashflow — this is a red line issue for IFA with the Minister for Agriculture.

The minister must make full use of RDP funding for farm schemes. We need increased supports for low-income sectors and vulnerable regions. In this regard, I welcome, as an initial step, new funding for sheep and Disadvantaged Areas (ANCs) in the Programme for Government. 

Both measures must be included in this year’s budget and paid out to farmers in 2017.

Fairness in the food chain

It is totally unacceptable that farmers, who do most of the work in producing high-quality food, are receiving a price below the cost of production.

There is unrelenting downward pressure by powerful retailers and processors on farm prices. Based on what consumers are paying, farmers are entitled to more — a viable price above the cost of production and a fair return on work and investment.

Effective measures are needed to redress the balance of power in the food supply chain and ensure fair and viable commodity prices for farmers. The aggressive behaviour of dominant retailers towards smaller suppliers must be halted.

The new Grocery Regulations must be strongly enforced — contracts must be effective; complaints must be investigated and offenders prosecuted. IFA will continue to push for stronger legislation to include an independent ombudsman, and a ban on below-cost selling.

In Brussels, the Irish Government must support the Commission proposal that all large multinationals, including retailers and processors, will be obliged to publish their profits in each member state.

Farm finance and taxation

Farmers need taxation measures that improve farm profitability, promote on-farm investment and encourage young farmers. The tax credit for farmers and the self-employed implemented in the last budget must be quickly brought into line with the PAYE allowance.

Addressing volatility through the tax system is a new challenge to be addressed by the ministers for agriculture and finance. 

Farmers need measures to provide them with flexibility and the agri-industry must also come forward with risk management measures, including contracts, to provide greater stability on supplies, prices and inputs.

The €15,000 State Aid concession which was introduced by the EU Agriculture Council to address serious cash flow issues on farms must be used without delay. 

IFA has called on the Minister to make use of the allowance to provide short-term loans for farmers under serious pressure, including facilitating a suspension of superlevy repayments and converting merchant credit.

The cost of bank borrowing remains unacceptably high — Irish farmers are paying an average of 2% more that our European counterparts. The new Government must prioritise new sources of finance to increase competition and drive down borrowing costs.

All government ministers must work to deliver a more balanced economic recovery across the regions. IFA has identified a number of action points to kick start a re-energised rural economy, including the rollout of a high-quality broadband network, and increased funding for rural infrastructure.


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