'Ground-breaking' €150m loan plan
Published 12/10/2016 | 02:30
The measures introduced for farmers in Budget 2017, which include a €150m loan scheme and taxation measures, were made against the backdrop of falling farm incomes.
The headline proposal for farmers in the Budget is a €150m fund to facilitate low-interest loans to the agriculture sector.
Under the scheme, which will be administrated by the main banks, farmers can avail of loans of up to €150,000 at interest rates of 2.95pc. The Minister for Agriculture, Food and the Marine Michael Creed described the fund as "ground-breaking" and said farmers should look at their own financial circumstances to see if the loan schemes can work for them.
The loans do not require collateral and while the maximum loan request will be €150,000, the Department is expecting the average drawn down to be less than €75,000.
The low-interest loans are available to all livestock, tillage and horticulture farmers and the Department expects the first loans to be issued early in the new year.
Agri-taxation measures include an adjustment to the 'income averaging' system, which will give farmers the option to 'step out' of the system in years of difficulty - including 2016.
Minister Creed confirmed that further income deferral measures pushed for by farm organisations are being considered for inclusion in next year's Budget.
The Capital Gains Tax threshold has been increased by €30,000 to €310,000 for children and spouses. This is an important issue for farmers looking to transfer land to the next generation at the lowest cost possible.
Minister Creed also announced that his Department would be allocating €601m for investment in the Rural Development Programme, an increase of 21pc, which will allow for the re-opening of GLAS.
The Minister said this would allow an extra 12,000 farmers enter the scheme. The scheme is expected to reopen in mid-November for approximately six weeks.
A new Sheep Welfare Scheme is also to be introduced, which will give farmers €10 per ewe as part of the €25m scheme. The scheme is expected to open in 2017 and include a menu of options focusing on animal welfare measures.
Minister Creed also announced an extension of the Sustainable Energy Authority of Ireland's (SEAI) capital allowance scheme to non-incorporated businesses.
This is designed to incentivise investment in energy efficiency by farmers.
Farmers can also avail of an increase in the Earned Income Tax Credit of €400. Forestry will get an injection of €111.6m in 2017 to increase forestry cover and mobilisation of the existing timber and biomass.
The organic sector will receive €10m towards the Organic Farming Scheme, which has 1,600 farmers.
Farmers with raised bogs will benefit from an exemption on Capital Gains Tax for payments under the new raised bog restoration incentive scheme.
Overall, the Department of Agriculture's budget increased by €120m to just over €1.5bn, with increases in staff numbers also planned.
Teagasc will be one of the beneficiaries with an increase in teaching staff, while Bord Bia will be getting €2m specifically to deal with the issue of Brexit - which is expected to impact the agriculture sector more than most.
The Farm Assist scheme also got a boost with means testing reduced to 70pc of farm income.