IMF axemen target €400m of farm cash
Supports in firing line as experts look to restore order in the public finances
Farm supports amounting to more than €400m could be in the firing line as the IMF team seeks to restore order to the public finances.
At an IFA branch meeting last week, the association's deputy president Eddie Downey said that the big worry for farmers was that any of the farm programmes funded from the national exchequer could be axed by the IMF. “The history of the IMF is to revalue currencies,” said the IFA man. “But they don't have that option here so they could just cut everything by 50pc. The farm schemes are big costs, so they are potential targets.”
The schemes that are most exposed to cuts are those that are 100pc funded by the Irish taxpayer. These include the Farm Assist, Suckler Cow Welfare Scheme (SCWS), forestry grants, Fallen Animal Scheme and Disadvantaged Area (DAS).
While the IFA has already launched a massive lobbying drive with TDs and senators, economist Jim Power believes this will be a pointless exercise. “I don't believe lobby groups will have any clout with the IMF whatsoever,” he said.
“Everything will be on the table, especially areas where there is no tax being collected at the moment, such as property tax, for example.” However, Mr Power said he did not believe that land would be subjected to such a tax. When asked if farmhouses could be exempt from a property tax, Eddie Downey said that it was unlikely that farming families would be treated any differently from the rest of the country.
It is widely believed that the IMF team will use the An Bord Snip Nua report as a starting point for possible cuts. The report, which was compiled by UCD economist Colm McCarthy, pin-pointed over €300m of savings in agriculture. Two of the biggest targets in that report were the SCWS and DAS.
McCarthy calculated that by axing the SCWS and cutting the DAS by 30pc, savings amounting to €110m could be made. TB compensation was also earmarked for a 25pc reduction to save €9m. The report also suggested that Bord Bia should be merged into Enterprise Ireland and the Department of Agriculture to save €7.3m. It also highlighted savings of nearly €50m and staff reductions of 1,140 by rationalising the Department. However, the Department will be able to present a strong case that it has already achieved significant savings. Staff numbers have fallen by more than 800 since March 2009.
Its expenditure has also dropped by €200m in the last 12 months following cuts to the DAS, SCWS and Fallen Animal Schemes and the closure of programmes such as REPS4 and the Early Retirement.