ICMSA says it is watching with “great interest” an aid proposal by EU Agriculture Ministers that would allow for the introduction of an Australian-style farm income averaging scheme.

The proposal was recently tabled in Brussels on the grounds that it would offer Member States more flexibility to help farmers at national level.

ICMSA’s Farm Business Committee Chairperson Lorcan McCabe said that such a proposal would give the Department of Finance a perfect opportunity to re-examine the introduction of an income volatility management tool.

Such a tool could be used to address the ongoing income volatility issues that he said were “wrecking” particularly dairy farmers’ incomes.

“ICMSA has previously referred to the need for the introduction of what is referred to in Australia as a Farm Management Deposits Scheme [FMDS], which has both a positive farm financing component and a built-in mechanism to smooth-out income over a period of years.

“We have been monitoring its use in Australia and looking at the reaction to it and both have been overwhelmingly positive,” McCabe said.

He added that the ICMSA is satisfied that a similar style FMDS could work “perfectly well” in Ireland.

“Subject to a number of modifications for our context, we could literally cut-and-paste the structure and function and introduce it to the Irish scene very quickly.

“FMDS has many merits and most definitely should be considered for incorporating into the Irish income tax code for farmers,” he said.

McCabe noted that state aid rules have previously been a stumbling block towards the introduction of such a scheme but he believes the proposed increase in de-minimis farm aid funding would overcome previous difficulties.

“The proposed raising of the de minimis levels might overcome the state aid aspect which was often cited as the reason why we couldn’t have effective volatility-management tools through the tax code,” McCabe said.

He concluded by saying that Irish dairy farmers cannot go on in this boom-and-bust manner where the various sectors are being wrecked by price and income peaks and troughs.

“The agricultural industry faces continuously changing markets with many internal and external forces impacting on the return farmers receive for their produce,” McCabe said.

“The variables are numerous and have a really disproportionate effect on our incomes. So we desperately need as many stabilising elements as possible and adequate farm income volatility-management tools within our tax system would go a huge way towards helping.”