Budget 2021: Measures to support farming sector sought

While farmers “fully realise” the constraints around Budget 2021, a number of measures are needed to support the farming sector and boost the rural economy – particularly in light of Covid-19 and Brexit, according to the Irish Creamery Milk Suppliers’ Association (ICMSA).

ICMSA president Pat McCormack commented on the matter following a video conference with: Minister for Finance Paschal Donohoe; Minister for Public Expenditure and Reform Michael McGrath; and Minister of State Patrick O’Donovan, on the prospects for next month’s budget.

McCormack said that concerns are mounting as the atmosphere around the post-Brexit trade negotiations worsened.

The president stressed that, in the event of Brexit negotiations failing and the UK exiting on the basis of ‘no deal’, then “massive and immediate” aid would have to be made available to the Irish farming sector to try and cope with the loss of up to €4 billion worth of exports.

“We emphasised to the ministers that the idea that any degree of ‘preparation’ can cushion that kind of blow is just delusional,” McCormack said.

“None of this is to support the British government’s attitude or its most recent stunt; but the fact of the matter is that our farming and food sectors – which are the economic engines of rural Ireland – will be perhaps fatally wounded by the loss of the British markets.

“That has to frame our attitudes and it certainly has to frame the drawing up of budgets both in Ireland and in the EU,” the president added.

In terms of relatively “unproblematic” budget options, McCormack pointed  to the disparity between Earned Income Credit allocated to PAYE workers and self-employed individuals, like farmers.

He also asked for “practical and uncomplicated measures” that would smooth the transfer of family farms to the next generation, including the retention of the current Stamp Duty reliefs.

Farm Management Deposit Scheme proposal

McCormack called on the gathered ministers to consider adopting a “Farm Management Deposit Scheme” that he said would help address the wild fluctuations in income that were “battering” family farms and eliminating any prospect of them being able to plan their business on the kind of predictable year-to-year basis.

“We’ve done the work on this and given the government a farmer-friendly scheme that it could supervise and regulate but which would allow farmers to use funds earned in ‘good’ years against tax bills in ‘bad years’,” the president said.

It’s absolutely cost-neutral and completely supervised by the government, but it would give the farmers of Ireland some sense of security at a time when that was never more badly needed.

In terms of farm schemes, McCormack said that it is essential that a fully funded Rural Environmental Protection Scheme (REPS) like scheme is in place for 2021.

He also called for the Targeted Agricultural Modernisation Scheme (TAMS) to continue to be available to farmers in 2021. Finally, he said that a dairy calf-to-beef scheme should be introduced to better integrate dairy and beef production systems.

Farm schemes are important economic drivers in the rural economy and it is vital that sufficient funding is available for 2021 providing a boost to the struggling rural economy, McCormack concluded.