Budget 2020 swerves demands for action on farm incomes crisis

Limited package of measures includes Brexit fund access and extra Fair Deal funding

Minister for Finance Paschal Donohoe pictured in his office in the Department of Finance preparing Budget 2020. Photo: Gerry Mooney
Minister for Finance Paschal Donohoe pictured in his office in the Department of Finance preparing Budget 2020. Photo: Gerry Mooney
Minister for Finance Paschal Donohoe arrives at his department ahead of delivering Budget 2020. Picture: Gerry Mooney
Pat McCormack President of the ICMSA. Photo: Kyran O'Brien
Margaret Donnelly

Margaret Donnelly

Budget 2020 will provide scant relief for farmers, with the Government doing little to tackle the deepening income crisis in the sector.

The Farming Independent understands that the limited package of measures from Finance Minister Paschal Donohoe for farmers and rural Ireland includes:

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  • The BEEP pilot scheme announced last year will now run in 2020 with an allocation of €40m;
  • A €3m ‘Go Green Scheme’ for farmers

  • A €110m no-deal Brexit fund for farmers;
  • No deal fund - €85 million will be provided for beef farmers; €14 million for fisheries; €6 million for other livestock farmers and mushrooms sector; and €5 million for the food and drinks processing industry.

  • “First wave” of Brexit support will be targeted at the beef industry, fisheries, agri-food producers and for farm diversification programmes.

  • An increase in the Inheritance Tax threshold for agricultural land from €320,000 to €333,500;
  • An increase in the Earned Income Credit from €1,350 to €1,500;
  • Extra funding for the Fair Deal nursing home scheme to address waiting lists;
  • The midlands is to receive a special fund worth €31m from the Carbon Tax income.
  • Extension of Section Capital Gains Tax Relief for Farm Restructuring

  • The lack of measures to address falling farm incomes, particularly in the beef and tillage sectors, is likely to ramp up anger at the perceived neglect of rural issues by the Government.

    ICMSA President Pat McCormack warned yesterday that "we're putting the Government on notice here: the Brexit fund had better be accessible to the farmers, all farmers, and had better not be reserved for factories, processor or promotional boards or promotional boards."

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    Farm supports

    Referring to the 2020 provision for his department notwithstanding Brexit, Minister Creed focused in particular on the difficulties in the beef sector, “Regardless of Brexit I am providing almost €85 million in targeted schemes to support sustainable beef farming. This includes almost €45 million for the Beef Data and Genomics Programme (BDGP), and a further €40 million for targeted supports. I intend to consult with stakeholders as to the use of these funds.

    In broad terms the following options will be considered:

    • the continuation of the pilot BEEP suckler cow/calf weighing scheme, under de minimis State Aid provisions, with a view to such a measure becoming part of the next RDP, subject to an evaluation of its effectiveness. Farmers have responded very positively to this scheme. It will encourage weighing as a matter of course, in order to improve the environmental and economic performance of each suckler cow.
    • the provision of supports for beef farmers rearing dairy beef animals, to encourage best practice and improve the efficiency of such enterprises. There is real potential for dairy beef to provide a new income stream for beef farmers, provided we get the fundamentals right;
    • encouraging farm practices that ensure the very highest standards of animal welfare on beef farms.

    The Minister indicated that €18 million is included for the continuation of the sheep welfare scheme, and that the budget for Bord Bia will be increased by more than €1.6 million with much of the additional funding to be used to promote Irish beef and sheepmeat.

    Brexit

    Finance Minister Paschal Donohoe has announced a €1.2 billion package of measures to respond to a no-deal Brexit.

    Mr Donohoe has told the Dáil that a no-deal Brexit would be “very challenging” for Ireland as he outlined his Budget 2020 plans to TDs on Tuesday afternoon.

    "A no deal Brexit will be very challenging. But it is a challenge Ireland has the measure of,” Mr Donohoe said. "Brexit is the most pressing and immediate risk to our economy."

    Some €110m will be provided through the Department of Agriculture, Food and the Marine Vote in the event of a No Deal Brexit. The provision of immediate supports of €85m for the beef sector will be the first priority, as will support for our fishing fleet.

    Of considerable importance to farm families, the Inheritance Tax threshold for agricultural land has increased from €320,000 to €333,500.

    It has been acknowledged the €150 increase in the earned income tax credit in closing the gap that exists between the self-employed and those in the PAYE sector, but farmers will be disappointed it has not reached the full €1,650 as committed in the programme for Government.

    However, concerns have been raised over the increase in the stamp duty rate from 6pc to 7.5pc that would hit farmers who were trying to expand their holdings.

    An extension of a capital gains tax relief for farm restructuring was also announced.

    The current scheme provides for capital gains tax relief where an individual disposes of and purchases land and/or exchanges land with another farmer in order to consolidate an existing farm.

    Meanwhile, in what will be seen as a further blow to rural Ireland, the Government raised the carbon tax by €6 per tonne in the first of what will become annual increases over the next decade.

    The price of a litre of petrol and diesel increased by 2c.

    The Irish Independent revealed that €31m brought in from the tax will be ring-fenced to help the midlands.

    Part of the €1bn Brexit package has a new 'transition fund' to provide SMEs with support ranging from €200,000 to €1m.

    IFA President Joe Healy said the funding provided for the agri-food sector will fall short of what will be needed as Ireland faces an agricultural Armageddon.

    “While the €110m committed to the Department of Agriculture for next year is a step forward, much more will be needed now as farmers are already suffering huge losses due to Brexit uncertainty,” he said.

    Joe Healy also said the carbon tax will disproportionately affect farmers and rural dwellers as they don’t have an alternative.

    “We expect a significant amount of the funding to be ringfenced for agri-environmental schemes, renewable initiatives that have a farmer and community focus,” he said.

    Meanwhile, President of the Irish Creamery Milk Suppliers Association (ICMSA) Pat McCormack said that Budget 2020 would come as a profound disappointment to farmers in general and stated that there was no sense of urgency of the threat facing Irish farming time.

    The ICMSA President said his association has consistently highlighted the challenge of income volatility on farm families, but yet again this fact has been ignored in the Budget and “put bluntly, inaction on this matter is leaving farm families cruelly exposed to volatility and undermining their very future”.

    Indo Farming


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