THERE WERE A number of measures announced in the Budget this afternoon that will be of big interest to farmers across the country.
Changes in income tax, investment in sheep welfare and an increase in rural development funding will all impact the daily lives of farmers.
Finance Minister Michael Noonan kicked off the mentions of farmer supports as he gave his Budget speech to the Dáil this afternoon.
Farmers and agri-food businesses have been worried about Brexit and the implications it could have on their sector.
The UK is by far the largest export market for Irish agri-food and drink, with over 40% of all exports going there last year.
As a result of this, Noonan said Brexit and any weaknesses in sterling could have a huge effect on farmers.
“This poses a competitive challenge for farmers and agri-food companies that sell a great deal of their output into the UK market,” said Noonan today.
Today I am announcing a package of measures to assist the sector.
1. “Step out” option for farmers income averaging
First up is the introduction of a “step out” option for farmers who are income averaging for tax.
Income averaging involves a farmer paying income tax on their average income over a period of five years.
Under this new measure, farmers who have had a particularly bad year income wise will be able “step out” of this tax averaging and pay the income tax due on that year alone.
This will reduce the overall amount that they have to pay should they have a bad year.
2. Increase in flat-rate addition for farmers not registered for VAT
The flat-rate addition for farmers not registered for VAT will increase from 5.2% to 5.4%. This scheme compensates unregistered farmers for VAT incurred on their farming inputs.
3. Farm restructuring relief extended
Farm restructuring relief – which was first introduced in Budget 2013 – has been extended until 2019.
4. Introduction of low-cost €150 million loan fund
Noonan announced that a low-cost loan fund was being developed using EU exceptional adjustment aid.
Noonan said this loan would be:
Low cost, below 3% per annum and highly flexible.
Agriculture Minister Michael Creed announced later that there was a loan fund of €150 million being introduced at an interest rate of 2.95%.
5. Improvements to Farm Assist and Rural Social schemes
Public Expenditure Minister Paschal Donohoe announced that there would be 500 new places introduced on the Rural Social Scheme for low income farmers.
He also said there would be there would be “improvements” to the Farm Assist Scheme – saying that Social Protection Minister Leo Varadkar would announce further details later today.
6. Increased funding for Rural Development Programme
Spending in the Rural Development Programme will be increased by €107 million to a total of €601 million next year.
Included in this will be a €25 million sheep welfare scheme.
Other areas of investment include:
Comment
Commenting on the Budget allocations, the Minister for Agriculture, Food & Marine, Michael Creed TD, said that his department had been preparing for the Brexit fallout since before vote took place in June.
“Supporting and developing our food businesses is central to what we do as a Department,” he said.
This has never been more acute in the context of the current and potential impacts of Brexit.
Farmers groups broadly welcomed the measures in today’s Budget.
Irish Farmers Association (IFA) president Joe Healy welcomed the introduction of the low-cost loan fund, saying 2016 had been a very difficult year for farmers.
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