Comment: Farmers left with many unknowns despite Budget positives
Budget 2018 has delivered some headline bonuses for farming, but the underlying figures will leave many farmers disappointed as the fundamental issue of income volatility remains in their hands to deal with.
When the Minister for Finance Paschal Donohue took to the floor of the Dail yesterday it was interesting to note that it was a good 40 minutes into his Budget speech before he mentioned the agri-food sector in any detail.
This was in marked contrast to his predecessor Michael Noonan, who prioritised farmers in his last budget.
Back then, the sector was lauded as the saving grace of a country on its knees. But this is now and the agri-food sector is facing a huge crisis in the form of Brexit and the beef sector in particular, as a trade deal with South American countries threatens to cripple Irish beef production.
This year one of the key themes of the Government’s budget was to ‘Brexit proof’ the economy, but it looks like farmers could be the least Brexit-proofed of the agri-food sector.
Putting his money where his mouth is, the Minister for Finance allocated €300m in low-interest loans to SMEs to help deal with Brexit, but farmers, who have been identified as the sector most exposed to Brexit, will have to be happy with just €25m in similar loans.
Many will question why the banks, which will play a key role in administering the low-interest loans, are not providing loans at similar interest rates to their European counterparts. Further, such low-interest loans do not address the issue of income volatility.
Indeed, calls for changes to the taxation system that would allow farmers put money away in a good year, for a rainy year, failed to materialise. And it’s a pity as farming incomes can vary significantly from one year to the next. Income volatility is a growing feature of Irish farming as Irish food and drink becomes more exposed to worldwide currency and demand fluctuations – all impacting on the farmer’s bottom line.