Farm organisations react to Budget 2020


"Farmers will be hugely disappointed by Budget 2020"

Farm organisations react to Budget 2020

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  • 15 days ago

"Farmers will be hugely disappointed by Budget 2020"

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 Dept 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.

“Beef farmers have incurred huge losses since May 12th when the Beef Exceptional Aid Measure (BEAM) was introduced and these have to be covered,” he said.

He stated that now that the Irish Government has set out its plans, the EU Commission needs to put its “Brexit-funding cards on the table”.

Schemes:

Healy outlined that clarity is needed regarding the implications for certain schemes such as the BEEP pilot scheme introduced last year.

“We also need clarity on the Minister for Agriculture’s plans for the €20m underspend in the Beef Exceptional Aid Measure,” he stressed.

He welcomed the allocation of €3m for pilot agri-environmental schemes, adding “it’s a very modest allocation”. “Environmental schemes are an area where farmers can make a significant positive contribution to climate action.”

He said the increase in the NPWS Farm Plan funding to €1m is “a step in the right direction”.

Healy also acknowledged the €150 increase in the earned income tax credit, but said that farmers will be disappointed it has not reached the full €1,650 as committed in the programme for Government.

Other

The IFA president 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.

He said it was very disappointing that there we no reference to the Fair Deal Scheme. “The Government needed to provide assurances that the changes agreed by the Cabinet are provided for.”

The organisation’s Farm Business Chairman, Martin Stapleton, said the increase in the stamp duty rate from 6% to 7.5% would hit farmers who were trying to expand their holdings.

He noted that the extension of restructuring relief is important for those farmers who are trying to consolidate their holdings.

Its Rural Development Chairman, Joe Brady, welcomed the increase of €12.1m in TAMS to bring the overall allocation to €82m. He expressed concern that the overall RDP Budget of €395m will "not be spent unless Minister Creed takes urgent action".

ICMSA:

The president of ICMSA, Mr. 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” being communicated around the threat facing Irish farming at this time.

He outlined that the Government has simply washed its hand of the many challenges facing farmers.

“In a normal year, that Budget would be underwhelming but where we are now – 23 days from the Brexit cliff – its lack of urgency and detail will be profoundly shocking certainly to ICMSA’s family farm membership and the wider rural economy.”

“For a start, where was the reference to current Brexit-related losses? It would appear the Government has decided to let farm families take the hit on this which is completely unacceptable.”

“The ‘big ticket’ Brexit fund announced was in the event of a ‘no-deal’ – but what about the losses suffered as and from May 12 and we must remember that even the fund before May 12th actually excluded dairy farmers with herds over 40 cows.”

“ICMSA won’t be alone in finding it very concerning that there was not a single specific reference today to our hugely valuable dairy exports and the potential impact in the event of a no-deal Brexit”, said Mr McCormack.

He said his organisation has consistently highlighted the challenge of income volatility on farm families but yet again, this fact has been “ignored in the Budget". He stated that inaction on this matter is leaving farm families "cruelly exposed" to volatility and undermining their very future”.

He said the 1.5% increase in stamp duty will hit farmers trying to build viable units and is “hugely disappointing” in that context.

“We also note the announcement of a ‘Just Transition Commissioner’; I’ll ask the question that every farmer in Ireland wants answered: ‘Just’ for who? Whose idea of ‘Just’?”

We want to be part of the solution on climate change and carbon reduction, but I’m very concerned by unelected officials who’ll be given sweeping powers and we’ll be watching this very carefully”, said McCormack.

“I regret to say that I do not think the Government has shown any degree of understanding about the depth and multi-pronged nature of the threat that Irish farming and food production is facing right now and farmers will be hugely disappointed by Budget 2020,” he concluded.

ICSA

ICSA president Edmond Phelan has said today’s budget provides very little detail on how a no-deal Brexit will be mitigated.

“The Minister for Finance indicated a fund of €110 million for the Department of Agriculture, of which €85 million will be targeted at beef farmers, in the event of a no-deal Brexit."

"However, it is clear that a no-deal Brexit would also require support from Brussels. The problem with all of this is that Brexit uncertainty has been almost as bad as the no-deal scenario for cattle and sheep farmers. Nothing in today’s budget acknowledges that reality.”

“We still are not clear as to what will be done to deal with the shortfall in applications for the BEAM programme. ICSA believes that the rate per qualifying animal should be adjusted upwards so that the full exchequer contribution of €50 million, along with matching EU funding can be utilised.

'Sheep farmers are going to need a package'

“Sheep farmers are also feeling the impact of Brexit as low sheep price in the UK is completely undermining our sheep farmers."

It believes that sheep farmers are also going to need a package "along the lines of the BEAM scheme for beef farmers".

In other sections of the budget, ICSA is "appalled" at the further increase in stamp duty on land purchase which has been increased to 7.5%. “This is a totally gratuitous assault on farmers trying to expand their enterprise."

"We do welcome the extension of the Capital Gains Tax relief for Farm Restructuring for another two years to the end of 2021.”

Phelan said that the increase in carbon tax, which is likely to be the first of many, is simply an unfair tax on rural dwellers. “Most rural dwellers cannot afford an electric car."

"Hybrid cars are okay for urban commuting but totally unsuited to rural or long-distance driving and not practical for towing. Carbon tax without an alternative way of travel or haulage is simply personal tax dressed up in virtuous clothing.”

Mr Phelan described the minimal adjustments to the self-employed tax credit and the Capital Acquisitions Tax Group A rates as begrudging.

Initially, he said, there was a commitment to rectify the injustice of income tax credits in three tranches of €550 a year.

"If that had happened, the self-employed person would have already achieved income tax parity with the employee."

!It is manifestly unfair that we are heading into yet another tax year whereby the earned income tax credit is still less than the employee tax credit (€1500 vs €1650).” Phelan concluded.

Macra na Feirme

Macra na Feirme is questioning whether the "largely uninspiring budget" goes far enough to mitigate the potential damage this generation’s young farmers and rural youth are facing, given current market conditions, climate change pressures and a looming no-deal Brexit.

It has welcomed the continuation of farm restructuring relief and noted that the commitment to beef farmers in the event of a no-deal Brexit in the Budget is "especially promising".

"The beef industry has been hit by a perfect storm of European oversupply and Brexit driving prices unsustainably low."

Its president, Thomas Duffy, outlined that "we need to see how the €85 million investment, in the event of a no-deal Brexit, will help young beef farmers adapt to new markets”.

It stated how additional investments in the Department of Agriculture, Food and the Marine and the Department of Rural and Community Development demonstrate an "understanding of the importance of agriculture and rural Ireland to the overall economy".

“We are happy to see government recognize the unique challenges facing agriculture and agri-food in adapting to climate change,” said Duffy.

The budget, the farm organisation said, presents some concerns for the organisation as it lacks details in areas of rural transport, the development of the rural broadband network and real action on addressing climate change for rural areas.

“As they say, the devil is in the details and we really need to see how the Government intends to roll out funding,” Duffy added.

"Rural youth need more public transport options, access to rural broadband to increase rural innovation and work from home opportunities."

“Government needs to really address climate change in rural areas rather than just carbon taxes for greenways and bike lanes,” Duffy concluded.

INHFA

The Irish Natura and Hill Farmers’ Association has said the budget fails to deliver for smaller suckler farmers and the hill sheep sector.

The organisation said that while it has no issue with the decision to continue with the BEEP scheme, there is the need to recognise that many small scale suckler farmers have entered into this scheme as they “see no value in it”.

National President Colm O'Donnell outlined that a welfare-based scheme as outlined in the INHFA beef cow/calf health plan paying €200 on the first ten cows is a “proposal popular” with these farmers.

O’Donnell said there was an opportunity to use some of the unspent funds in the sheep welfare scheme and make a top-up payment.

“This opportunity has once again been missed as too was our proposal to pay for the cost of EID tagging from these unspent funds."

In relation to the emergency fund available to farmers in the event of a no-deal Brexit, the farm leader expressed reservations that the fund in this eventuality, will be enough.

He concluded by emphasising how for many farmers Brexit is already impacting as regards the price the farmer is getting at the factory gate for beef and lambs, which, he stated, "is why immediate support is needed not a vague promise of support in the future, which for some will be too late”.

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