Farm tax reforms planned to boost dairy expansion

A RADICAL overhaul of farm taxation is being planned in Budget 2015 in a bid to fast-track dairy expansion and allow younger farmers greater access to land, the Irish Independent has learned.

The abolition of EU milk quotas next year will see Ireland expand dairy production by 50pc in just five years.

The National Dairy Council (NDC) is predicting that 15,000 new jobs could be created by 2025 thanks to the surge in production.

Agriculture Minister Simon Coveney revealed he is now negotiating with Finance Minister Michael Noonan over a radical revamp of the farm taxation regime to ensure that while Exchequer revenues are maintained, incentives are provided for the expansion of Ireland's biggest domestic industry.

Critically, the new agri-food tax regime will also include special allowances for environmental protection, easier land leasing and greater farm access for younger operators.

"Michael Noonan and I have put a team of people in place to look at all of these measures and to look at ways in which we can re-orientate agri-taxation," Mr Coveney said.

"This will maintain the actual financial benefits that are there but making sure that those benefits are now focussed on the modern challenges of agriculture," he said.

"These include climate change, generational change and protecting bio-diversity," he added.

"Obviously, we need to allow and support people who want to expand but also we need to promote land mobility and access to land for young farmers."

The minister said that the aim is "to switch from con-acre which is essentially the leasing of land for less than a year to a more long-term lease programmes".

"All of those things need to be promoted and encouraged through a progressive taxation system."

The IFA is expected to outline its own budget proposals at next week's National Ploughing Championships in Laois.

Central to the tax reforms is the potential expansion of Ireland's prized dairy sector.

Mr Coveney said Dairygold's creation of 115 new jobs in a €117m plant expansion at both Mallow and Mitchelstown is proof Irish firms are reacting to the huge export potential.

Taoiseach Enda Kenny said it was an exciting time for the dairy sector.

"This is a reminder of just what a giant the Irish agri-food sector is for our economy and, in particular, for the dairy sector."

"You are seeing €500m being spent at the moment in the Irish dairy sector preparing for a very significant expansion which will take place from March 2015 when milk quotas are abolished across the EU," he said.

Mr Coveney said Ireland will grow dairy output by 50pc in just five years.

"It means a lot of new, younger farmers and it means about an extra 300,000 milking cows. It takes one person to milk 100 cows so you are talking about 3,000 extra people milking cows in Ireland along with all the other jobs that are created."