The government's budget announcements are a “huge vote of confidence" in farmers' and the agricultural industry's efforts to improve water quality, according to Dairy Industry Ireland (DII).

The organisation said Budget 2027 also showed confidence in the "international competitiveness of our dairy and specialised nutrition sectors”.

Director of DII, Conor Mulvihill said Ireland now has the EU’s "biggest collaboration" between farmer, industry, and the state on water quality with the ‘Farming for Water’ European Innovation Partnership (EIP).

He noted that almost 6,000 farmers have signed up, added that the programme is "completely oversubscribed".

“This targeted funding will directly improve water quality on farms and offer critical support to our farmers," Mulvihill said.Mulvihill went on to discuss dairy and nutrition processing.

He said: “Furthermore, the robust suite of measures for advanced food processing ensures our sector remains a global leader in innovation and specialised nutrition.

“This is overall a balanced budget that rightly recognises the dual necessity of supporting our grassroots farm suppliers in their environmental transition while equipping Ireland's dairy processors to innovate, scale, and compete globally.”

Dairy and nutrition processing

DII outlined budget aspects that it considered as “advancing dairy and nutrition processing in Ireland”.

These include the following:

Regulatory clinical trials can now be used to satisfy the "science test" for research and development (R&D) tax credits, significantly reducing administrative burdens and rewarding R&D work undertaken by functional food and medical nutrition processors;
Increased R&D subcontracting limits (raised from 15% to 20% with a €200,000 monetary cap) will empower processing companies to collaborate more deeply with institutions like Teagasc and pilot facilities;
The newly launched Ireland Strategic Investment Fund (ISIF) €1 billion Enterprise Scaling Programme and a standard Capital Gains Tax reduction to 31% will unlock essential capital for ambitious indigenous firms to scale internationally;
Energy-intensive dairy drying and thermal processing facilities will see immediate baseline cost reductions as natural gas and kerosene carbon tax rates are reduced to €48.50/t and frozen for the lifetime of the government;
To mitigate wage cost pressures, the employer PRSI threshold has been raised to €600 per week, yielding €650-€700 in annual savings per employee under the threshold.

Dairy Industry Ireland, which is affiliated to Ibec, represents primary and secondary dairy manufacturers including the specialised nutrition sector in Ireland.