Farming groups critical of Government inaction in Budget 2019


Farming organisations have been weighing in on Budget 2019 following its publication yesterday (Tuesday, October 9) by Minister for Finance & Public Expenditure and Reform, Paschal Donohoe. Unsurprisingly, reaction has been mixed and the Government have been criticised for inaction in a number of areas across the farming sector.

Ifac CEO, John Donoghue, welcomed some measures contained in Budget 2019 such as the extension of income averaging, but labelled it a budget of missed opportunity for the farming sector.
"Overall, there is a strong sense in the sector of an opportunity missed. This year has been an enormously challenging year for farmers. With the combination of severe weather conditions, the fodder crisis, price and income volatility, spiralling costs and a major cashflow squeeze across the board, farmers have had a very difficult year. There had been some optimism that a significant package of supports would be announced to help the sector face into 2019, a year many anticipate will be one of the most challenging yet with Brexit and CAP reform on the horizon. No such package was delivered and farmers are understandably concerned about the future," he said.
We know exactly how difficult 2018 has been for farmers because we are working with them every day, providing advice and guiding financial decision-making. For the sake of the many farm families who are struggling to keep their businesses afloat in the current climate, we hope some additional pro farm measures will be included in the Finance Bill later this month. With an estimated one in every seven jobs outside of Dublin supported by the farming sector this is a part of the economy that now more than ever deserves special attention and should be robustly supported to ensure that it remains resilient in the face of significant economic uncertainty.”

Ifac has identified the following shortcomings in Budget 2019:
1. The low interest loan scheme announced for farmers will only apply to capital projects and cannot be used for working capital and yet it is in the area of working capital where farmers need the most help having just endured one of the most challenging year’s on record;
2. No de-stocking tax relief measure announced to help farmers who were hoping for some targeted support to help them face into another winter of feed shortages and rising costs; and
3. The much anticipated PRSI measures to help address the chronic labour shortage in the farming sector failed to materialise and so farmers will again struggle this year to attract labour into the sector.

ICMSA president, Pat McCormack, said it is clear that the current Government does not understand the scale of the challenges being faced by the farming sector, either in terms of the 50 per cent fall in income predicted for this current year or the transformational challenges that could follow Brexit next March.
Mr McCormack said that farm families can only conclude that the Government has decided that it doesn’t want to support farm families and the agenda now seems to be about enhancing the position of corporate structures and big business over family farms. 
“The biggest single issue facing family farms is income volatility and, as sole traders, the taxation system absolutely hammers farmers trying to make a living in an extremely volatile global food market. ICMSA and others have consistently highlighted this fact and the Government has acknowledged the problem. As a matter of fact, Minister Creed acknowledged this following the last two Budgets and it is extremely disappointing that he has failed, yet again, to deliver for farm families on this matter. We have corporate structures in Ireland and ‘big business’ paying effective tax rates of 1 per cent and yet our Government cannot bring in a simple measure to assist farm families to establish a volatility fund under the supervision of the Revenue Commissioners that could be utilised for difficult years. One would now have to question at this stage the level of priority that agriculture is getting around the Cabinet table and this should be a matter of concern for everyone in rural Ireland,” said the ICMSA president.

A number of measures have been welcomed by the ICSA such as the full restoration of the ANC payment, €40 for weighing calves, the extension of stock reliefs for another three years and the three-year extension of stamp duty exemption for young farmers. But, ICSA president, Patrick Kent, was more critical of other taxation measures.
“The minor level of improvement on earned income tax credits and on the Category A thresholds for Capital Acquisitions Tax represent, at best, a begrudging admission that they are worthwhile and, at worst, a rowing back of the ambition set out in previous budgets. The earned income tax credit was only increased by €200 to €1,350 as happened last year as well.
"But the various reports on taxation have highlighted that there is a serious inequality with PAYE workers who qualify for a credit of €1,650. When Minister Noonan began the process of rectifying this blatant unfairness for self-employed workers it was indicated that it would be done over three budgets with an increase of €550 each time. We are now looking at this process being dragged out over seven years. There is no justification for this."

In welcoming the new €20m funding for suckler farmers, national livestock chairman, Angus Woods, said it was recognition of the income crisis in the sector, but the level of funding was disappointing and more needs to be done to help sustain the suckler herd. He said it was essential that the measures under the new Beef Environmental Efficiency Pilot (BEEP) were kept simple, farmer-friendly and do not involve unnecessary costs.
"The understanding is that the BEEP will be a new scheme, separate from the BDGP and the main measures will involve the recording of data on weights for cows and calves. Full details and how they will be implemented have to be worked out with the Department and it is essential that there is full consultation.
Mr Woods said that the increased ANC funding of €23m, to bring the allocation to €250m, was positive and reverses the cuts imposed on the lowest income farmers in previous budgets. He said IFA will continue its campaign for increased funding of €300m as it is vital for low-income farmers on marginal land.
"The IFA is determined to secure a set of targeted direct payment supports in order to maintain the suckler cow herd, which is the backbone of the €3bn Irish beef sector. The IFA believes strongly in the importance of the suckler cow sector and will continue to campaign hard for increased support."
Mr Woods pointed out that a recent report commissioned by the IFA from Professor Thia Hennessey from UCC highlighted that 80 per cent of the cows in the west of Ireland are sucklers and a 10 per cent reduction in suckler cow numbers would result in a €305m reduction in economic output across rural areas.
"In what has been a very challenging year for farmers, this week’s Budget was some acknowledgment of the income difficulties in agriculture, but the upcoming major issues of Brexit and CAP will require much more Government commitment and support for farming."


Tags: IFA ICSA ICMSA IFAC Budget 2019 Paschel Donohoe