Farming industry welcomes moves to build viability

By Ray Ryan, Agribusiness Correspondent

However, farm leaders warned that a gap in the income tax treatment of farm families compared to families on PAYE had widened to €2,540 and was completely unjustified.

Finance Minister Brian Cowan said the Common Agricultural Policy (CAP) reform, the decoupling of farm supports from production, the WTO framework agreement and the demands of environmental standards represent major challenges for the farming community.

It was vital to build up the viability and capacity of the sector to cope with changes. A strong farming sector was crucial to maintaining a vibrant rural community.

Fine Gael spokesperson Denis Naughten said, while Mr Cowen talked big in relation to agriculture, there was very little in the detail.

The minister spoke of the need for farm consolidation but the proposal he outlined would impact on a very small number of landowners and only applies to land swaps of equal value. “It is disappointing that the minister made virtually no effort to encourage farm consolidation which is vital to ensuring that farm holdings are commercially viable in the future. It is also unacceptable that the minister failed to address the scandalous situation whereby the State forces farmers to sell land for the construction of roads and at the same time nails them for capital gains tax,” he said.

However, Agriculture and Food Minister Mary Coughlan said it was an extremely good budget for farmers. As well as benefiting from the general improvements in taxation and social welfare measures, the budget provided a further €20 million in concessions for the farming community.

“It will be of particular benefit to those farmers who wish to increase production or stock levels, consolidate farm holdings or invest in pollution control facilities,” said Ms Coughlan, who also announced that she intends to reduce by one third (€5m) the disease levies paid by farmers.

IFA president John Dillon said the budget recognised the importance of farm consolidation, especially in the face of increased competitive pressure, but further action was needed on a comprehensive package of measures to support consolidation and aid viability.

ICMSA president Pat O’Rourke said the relief of stamp duty on the sale and purchase of land was a welcomed move, but he hoped the minister could build on this in the Finance Bill and extend the relief to enlargement of holdings, the purchase of replacement land following CPOs as well as consolidating of holdings.

Budget summary:

A SPECIAL 100% stock relief to help trained young farmers starting off and 25% relief for all other farmers extended for a further two years.

Special stamp duty concession to ensure no charge for two years on exchanges of farm land of the same value for consolidation purposes.

Capital allowance for expenditure on farm pollution control to assist in meeting the requirements of EU Nitrates Directive.

Measures introduced to address income averaging in the context of change-over to new Single Farm Payment.

Rate of farmers flat rate VAT being increased from 4.4% to 4.8% to reimburse unregistered farmers for the VAT they pay on inputs as calculated by the CSO.

Animal disease levies cut by €5m.