Call for cut to VAT rate as fodder crisis set to continue

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Tipperary TD Jackie Cahill wants a VAT cut for farmers
Wayne O'Connor

Wayne O'Connor

Farmers will receive tax cuts to help reduce the cost of feeding animals and help them cope with the ongoing fodder crisis under proposals from Fianna Fáil.

The measures would see VAT on plastics and materials used in the production of fodder and silage wiped out for 12 months.

Levies paid on silage would also be cut.

The measures are being proposed to prevent a further escalation of the fodder crisis and to prevent it rolling into 2019.

Tipperary TD Jackie Cahill made the proposals at a parliamentary party meeting this week and has put them to Agriculture Minister Michael Creed.

Mr Cahill said extreme measures are needed to maximise fodder collection this year to ensure there are adequate supplies next winter.

He has called on Mr Creed to take urgent action.

"I suggest that the minister remove VAT on silage-wrap plastic for 2018 and on silage harvesting because it is essential that all fodder that can be garnered in the summer of 2018 to avoid similar circumstances next autumn and winter," said Mr Cahill.

"We cannot blame the minister for the weather of 2018 or the bad autumn of 2017 but his response, and that of the Government, has been completely inadequate.

"The Government has to recognise there will be ongoing losses in addition to the bills. The battle is already on to ensure enough fodder for 2018 and 2019.

"In the vast majority of cases, fertiliser has not yet been spread for first-cut silage."

Farmers usually pay 23pc VAT on silage wrap and plastics used in fodder production. However, there are occasions when a reduced rate applies.

Mr Cahill said axing VAT for 2018 would help farmers be better prepared for next year after an extremely poor winter.

"Unfortunately, a couple of fine days will not rectify this problem. Huge losses have been, and continue to be, incurred," he said.

These included costs for the beef and dairy sectors.

He warned the fodder crisis would have a knock-on effect on the fertility of dairy cows and had already hit tillage farmers unable to sow crops due to the bad weather.

Mr Cahill said: "There are ongoing costs. The Government has to recognise there will be ongoing losses in addition to the bills."

The Department of Agriculture said VAT was the subject of an EU directive and there were strict rules around its application and rates.

However, Fianna Fáil finance spokesperson Michael McGrath is examining how such measures could be implemented to offer farmers some financial relief to cope with extra costs associated with the fodder crisis.

In cases where a farmer produces their own silage they must pay 23pc on the plastic used. Farmers can pay a rate of 13.5pc, such as when the farmer supplies the wrap to a service provider making silage.

Junior Agriculture Minister Andrew Doyle said efforts were being made to ensure there are adequate fodder supplies going forward.

He insisted the Government had acted appropriately to the fodder crisis in a "targeted and appropriate way" in recent months.

"Notwithstanding this, Teagasc is being asked to prioritise fodder conservation for future winters in its farm advisory campaigns to ensure there are adequate stocks for next winter," said Mr Doyle.

"I am confident that the actions will ensure that farmers will be able to successfully plan more effectively for winters such as the one we have just witnessed."

Irish Independent