Coveney: Milk levy to fund overseas market research
Speaking in response to dairy sector resistance to the new milk levy, Mr Coveney said the 0.1c per litre levy would fund essential Bord Bia market research in new emerging markets in preparation for the end of the EU’s milk quota regime in 2015.
Mr Coveney said: “The IDB does not represent the entire dairy industry. It does a lot of good work finding new markets for Kerrygold butter and Irish cheese products and milk powder, but Bord Bia also has a broad remit to promote all of Ireland’s dairy products. I am meeting the IDB next week to discuss any concerns they may have about duplication. The dairy board is a private body, whereas Bord Bia is a publicly-owned body, and that is the reason for the levy.
“The levy will pay for Bord Bia marketing executives in Russia and the BRIC [Brazil, Russia, India and China] countries. Their work will help ensure there won’t be a dramatic drop in milk price with the huge increase in milk volumes post-2015. It is a very small levy, and in 2016 people will see that it will be money well spent.”
All of the major farm groups have criticised the levy. The Irish Co-Operative Organisation Society (ICOS) questioned the logic of imposing a levy on dairy farmers to fund Bord Bia, noting this function is already being carried out by the IDB, to whom dairy farmers already pay a levy.
Irish Creamery Milk Suppliers Association (ICMSA) dairy chairman Pat McCormack added: “Bord Bia is not involved in marketing; they are involved in promotion. The Irish food export sector does not need more ‘soft focus’ promotion; what it needs is hard-nosed marketing, selling a product at a profit.”
Meanwhile, Irish Farmers’ Association (IFA) president John Bryan welcomed the tax measures for farm transfer, investment and land mobility, but said the reduction in the capital acquisitions tax (CAT) transfer tax threshold to €250,000 is an excessive drop, and the increase to 30% in the tax rate on the balance, will discourage the transfer of commercial farms. “The detail in relation to the age profile for farm transfer is too restrictive,” he said. “This issue must be addressed prior to the Finance Bill.”
Mr Coveney said he accepted that farmers would have issues with some of the decisions, but added that agriculture had been given preferential treatment relative to other sectors.
He cited the retention of the 90% agricultural relief on CAT, farm partnership and transfer measures, stamp duty reductions from 6% to 2%, stock relief of 50% and 100% for young farmers, reopening of the TAMS scheme, the favourable universal social charge exemption rate, and a series of other pro-farmer taxation measures. “I am comfortable that the decisions we have taken are the right ones. We consulted with all the farming groups prior to the Budget, and the voice of agriculture has been well heard in the framing of this Budget.”
