‘Tax concerns put pressure on farms’

DAIRY and beef farmer Anne Keohane believes a likely shift to view farmland as a capital asset for taxation purposes is placing undue pressure on the family farm.

“Average farm incomes last year were €14,000 to €15,000,” said Ms Keohane, a West Cork-based farmer and chairwoman of the IFA in Cork.

“How could you expect a young person to come into farming if they know they’re starting with a €250,000 tax bill? Farm land is only an asset if you’re selling it.

“If the value of land increases, the capital gains tax and the inheritance tax will crush the industry. We need young blood in the industry, and people just will not pass on the farm to the next generation.

“Only 7% of Irish farmers are under the age of 35. If people hold onto ownership of the farm until their death, the next generation will be in their 50s when they take over. Clearly, that can’t be good for Irish agriculture.”

Ms Keohane also believes the doubling of the carbon tax will add pressure to input costs next year. The price of oil options rose 14% during November, with experts predicting further significant rises next year.

“We will be cutting 40 acres of silage on our farm,” said Ms Keohane. “Our diesel costs already went up this year. The tillage farmers said that the original carbon tax was costing them €3 an acre, which means that the double tax will cost them €6 an acre.

“Everything will go up in price. Contractors and anybody having anything to do with transport will have to put up their prices.

“All of that will be built into the price of the gallon of milk, and the transporting of cut silage.

“After the years the country wasted on property, the Department of Agriculture are talking about building a strong agricultural economy again.

“We need to see evidence of that being delivered in the budget. Has the penny really dropped, or is it all just talk?

“In 2005, there were 1.1 million suckler cows in the Irish herd. That is now down 150,000,” she said.

“The funding for Agri-Environment Options Scheme (AEOS) shows they’ve effectively closed it off for new entrants. They want to expand farming, but it won’t happen without support.”