The Budget is mere days away, but what can farmers expect? These are uncertain times in many ways for agriculture, with Brexit, poor harvests and further climate regulations all meaning the stakes are high for several sectors.
Below we take a look at what is on the cards and what is being floated ahead of Budget 2017 on Tuesday.
The UK’s decision to leave the EU has already impacted on Irish businesses, with the closure of a mushroom factory in Tipperary being just one example of jobs that are no longer there. Up to 95 per cent of Irish-grown mushrooms are exported to the UK, meaning this business is in serious danger.
The horticultural sector overall is at risk, and the IFA is urging for the rate of PRSI to be lowered, temporarily, to lessen employment costs for SMEs reliant on exports. Expect to see the Government tackle this in some way next week.
Farmers affected by weather losses
Persistent poor weather has held back farms throughout the north and west of the country this year. As a salve, a range of measures have been put forward. These include a reopening of the beef genomics and data scheme, with an increase of €200 per cow to be paid to the farmer.
There has been a call too for funding of up to €250 million for agri-environment schemes, with full payments for all GLAS, AEOS and organic scheme participants. Similarly, it is being urged that TAMS doubles to €60 million.
Sheep farmers meanwhile may benefit from the IFA’s proposal to bring in a targeted sheep scheme of €25 million. Aspects of this idea include having minimal bureaucracy in place to maximise its benefits on farmers. So far it is tricky to tell how many, if any, of these proposals will make it in.
One move that looks increasingly likely is the introduction of low cost loans for farmers, especially after Minister for Agriculture Michael Creed spoke on the matter this in the Dáil.
Following the emissions scandals involving car manufacturers, it is probable we will see a price hike on diesel. The Organisation for Economic Co-Operation and Development have “recommended at least an equalisation of excise rates on petrol and diesel”, according to the Irish Times. In effect this would mean 2.18 cent per litre for diesel over the next five years.
As for green diesel, it is not certain what will happen just yet. While environmental groups have called for the price to rise for the first time since 1988, political realities may keep it at its current level. According to the latest polling, Fine Gael are losing support among farmers. They’re an important constituency for the party so any move to raise the price of green diesel would be unwise when another election mightn’t be all that far away.
Staying with political concerns, farmers are almost certainly about to benefit from a cut to inheritance tax as Fine Gael believe it will shore up support among farmers. The idea has been on the cards since the summer, and will see the threshold for inheritance tax rise from anywhere between €20,000 to €40,000. This should mean the first €320,000 of inheritance is not liable for tax. The Government believes this will help the passing on of land for future generations, and increase the viability of the incoming generation.
Nursing home support exemption
It appears farmers can expect to see their annual nursing home fees reduced significantly as part of a plan mentioned above to help the transition between generations. Currently a family’s payment for support is calculated based on 80 per cent of their annual income, and also a 7.5 per cent charge on overall assets.
Under the proposal reported on by the Irish Independent, farm assets may be excluded from the calculation. It is currently unclear what the exemption rate will be, though unnamed Fine Gael TDs are quoted as saying it should be 100 per cent. That may be part of the attempt to sweet talk farmers though, as the Department of Health is said to favour an exemption rate of 50 per cent. The latter figure would raise fewer eyebrows from non-agricultural sectors too.
Farm Assist Payment
Minister for Social Protection Leo Varadkar hinted in several media interviews at the Ploughing that the Farm Assist Payment would increase. As is, farmers between the ages of 18 and 66 are means tested to see who qualifies. The minister also spoke of adding to the rural social schemes, saying “As the number of people on schemes like JobBridge goes down, I'm looking at whether it would be possible to increase the number of places on the rural social scheme”. Right now there are 2,500 places in the scheme, though the IFA have repeatedly called for that to be increased to 4,000.