Farm Ireland

Thursday 26 April 2018

Aid schemes under Budget cuts threat

Spotlight on AEOS for 2012 as €300m reduction in spend sought

Darragh McCullough

Darragh McCullough

Speculation is mounting on where the axe will fall as the Minister for Agriculture seeks to cut more than €300m from his Department's budget for next year.

Agriculture Minister Simon Coveney has already agreed to cut almost €100m from the capital budget, which has drawn widespread criticism from farming representatives.

However, major savings will also have to come from the Department's current spend, with industry sources predicting cuts in the allowances for the Suckler Cow Welfare Scheme (SCWS) and Disadvantaged Area Scheme (DAS), as well as the possible abandonment of AEOS for 2012.

While the winding down of payments under the Farm Waste Management Scheme and Farm Improvement Scheme will result in €40m savings in the capital budget, it has been suggested that horticulture is likely to see a 25pc cut to €3m and the bioenergy development budget slashed by 66pc to just €0.5m.

However, the biggest savings are likely to come from the forestry budget, as well as marketing and processing grants. A spending shortfall of up to €15m a year has occurred in recent years in the marketing budget, making it a likely target for cuts.

Farmers will be anxious that the €112m of forestry premiums and establishment grants remain untouched. But with forestry now accounting for nearly two thirds of the total capital budget, it will be difficult for the Minister to protect the sector.

The Targeted Agricultural Measures scheme which was closed to applicants from the dairy, poultry, pig and sheep sectors earlier this year will also be scrutinised. It has funding of €19m but as it was closed before farmers had an opportunity to access grants, it is estimated that less than €1m of this allocation was actually used this year.

IFA president John Bryan said that the funding allocation for agriculture up to 2016 was totally inadequate for the expansion plans of the sector.

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"Even though the allocation of €168m is more than the previous Government's proposals, it is still 37pc lower than 2011's allocation," he said.

He estimates that a capital programme of €200m next year would be necessary for farmers to fund growth in the sector.

ICMSA president Jackie Cahill said that while the Government had put substantial resources into enterprise, it had decided to cut back in a self-defeating and incoherent fashion the capital spending programme.


ICSA president Gabriel Gilmartin said that the minister had already conceded too much ground by suggesting that agriculture could be hit with 16pc of the total expenditure cuts in next month's Budget.

"This is completely disproportionate when compared with the expected cuts in other departments," he said.

Meanwhile, with the cabinet convening for its first full day of talks about the up-coming Budget yesterday, more attention is beginning to focus on the current expenditure budget for the Department next year, where the programme for Government has stipulated cuts of €216m. Again, the winding down of the Early Retirement scheme, REPS3 and the dioxin compensation fund should yield savings of more than €55m.

But the fear in farming circles is that the Minister will be forced to look at some of the larger schemes such as the SCWS and DAS schemes. While the DAS is co-financed by the EU to the tune of 40pc, this still leaves the exchequer stumping up more than €132m on payments.

The SCWS is also vulnerable given that only half of the €61m allocated to the scheme was drawn down by farmers this year.

Meanwhile, senior farm advisers have predicted that AEOS will be scrapped for the coming year. Up to 8,500 farmers joined the scheme last year but all these have not been cleared for payments -- uptake for this year was far lower. Expenditure on the scheme for this year was capped at €4,000 per applicant but the total spend is likely to be well below the €30m allocated.

Savings from reductions in staff numbers and costs within the Department itself are expected to yield approximately €13m.

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