Ahead of Budget 2023, the Irish Creamery Milk Suppliers Association (ICMSA) has supported calls for an additional income tax band which it said would help struggling farmers.
Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar, has said that including such a move in next month’s budget would benefit around one million workers, as it would prevent the “squeezed middle” from moving into the higher tax bracket too quickly.
However, it remains to be seen if the coalition partners will agree to such a move before budget day.
The ICMSA is proposing that the income threshold on the 20% band for single/widowed farmers without dependents should increase to €37,500.
It said that the additional band of 30% should be introduced between €37,501 and €55,000 and the balance above €55,000 at 42%.
In its pre-budget submission, the ICMSA is also urging government to introduce an income volatility management tool called the Family Farm Fairness Mechanism (FFFM).
This would allow farmers to place a portion of their income into a deposit account during the tax year in which the profit was made.
This amount would not be subject to tax in that year but would be taxed in a future year when the funds are used for farm income or investment purposes only.
The ICMSA said that the 23% VAT rate should be cut to 20% and farmers should be allowed to claim VAT back on farm safety equipment.
It proposed that a tax rebate system on green diesel be introduced which would be based on usage in order to cut input costs on farms.
To encourage farm transfer to the next generation, the group said that consanguinity relief should be made permanent.
The farming body stated that agricultural land sales should be subject to a flat 3% rate of stamp duty, while the Young Trained Farmers Stamp Duty and Farm Consolidation Relief should be renewed.
The ICMSA proposed that farmers should be allowed to write-off capital expenditure on farm buildings, plant and machinery over a period of between three and eight years with a “floating allowance” of up to 50% allowable in any one year to promote farm investment.
Environment
Among the environmental proposals in the pre-budget submission is a call for no VAT to be applied to low emission slurry spreading (LESS) equipment.
A rebate system is sought by the group for farmers who choose to use protected urea over CAN (calcium ammonia nitrate) or traditional urea.
The ICMSA believes there should be a dedicated version of the Sustainable Energy Authority of Ireland (SEAI) for the farming community to provide information and advice on renewable energy technologies.
It also said that energy assessment grants should be offered to farmer sole traders in the same way as is available to incorporated companies.
Farm Schemes and Spending
The ICMSA believes that a specific scheme should be introduced in Budget 2023 to encourage more dairy farmers and other intensive sectors into agri-environmental schemes.
It said that an additional 10,000 farmers should be included in the Agri Climate Rural Environment Scheme (ACRES) in 2023.
The submission also calls for improvements to the Targeted Agricultural Modernisation Scheme (TAMS) to reflect the real level of costs involved in investments on farms.
The ICMSA outlined that a higher payment is needed in the Dairy Calf to Beef scheme to better integrate the dairy and beef sectors.
The group said that farmers should be covered for the same level of occupational PRSI Risk Benefit as is currently available to PAYER workers.
The government was also urged to address the discrepancy which means that many women working on Irish farms are not entitled to a contributory pension.
ICMSA president Pat McCormack noted that Irish agriculture has played a significant role in the post-pandemic economic resurgence.
He said that there have been enough “soft words” from government about the desire to help the agricultural sector transition to greater sustainability, adding that action must be taken in Budget 2023.
“The government would do well to remember that farming and food was economically our ‘last man standing’ after the 2010 recession and it was our excellence and exports that provided the platform for the recovery to begin in other sectors.
“The Irish government should remember that our farming and agri-food sectors are, literally, in the very soil of the state; we were here long before the FDI [foreign direct investment] tech and pharma and we will still be here when those sectors eventually move on to their next strategic location,” he added.
“What is required in Budget 2023 is certainty and stability. Indigenous business – including farmers – must see policies that will support them and actively help transition all aspects of society and economy through to the lower carbon future,” McCormack concluded.