Senator Paul Daly has called for an “immediate review” of the reference costs currently applicable under the Targeted Agricultural Modernisation Scheme (TAMS 3).
There is a “massive gulf” between the costs estimated by the Department of Agriculture, Food and the Marine (DAFM) and the “actual costs” on the ground, the senator said.
The senator said he is aware of a farmer who is building a new shed for which the DAFM’s reference costs are in the region of €63,000, however, the actual costs would be €93,000.
Instead of the 60% grant aid under TAMS, in this case, Senator Daly said the farmer would only receive a 41% grant aid due to the higher costs incurred by the farmer.
He raised his concerns in relation to the reference costs with Minister for Agriculture, Food and the Marine, Charlie McConalogue in the Seanad today (Wednesday, March 20).
TAMS
Senator Daly said that since the DAFM’s reference costs for TAMS were reviewed last, building costs, especially for concrete and steel rose by 80% and 25-30% respectively.
Raising concerns that projects under TAMS “could be shelved” due to the extra cost for building material and equipment incurred by farmers on the ground, Senator Daly said:
“There are a number of farmers who have live applications who are now only beginning to realise the difference. They were actually using the [DAFM’s] reference costs as their potential outlay.
“It was only when they got contractors then to quote a price that they realised the massive gulf and the massive difference that is there [between reference costs and actual costs]”.
He added that this gulf is putting some of these jobs under TAMS in “jeopardy” and that farmers are having “second thoughts” as to whether the works will be completed at all.
Reference costs
Reference costs are developed as a maximum ceiling that can be paid for grant-aided equipment, and these are applied to over 400 investment items, the minister said.
A review will commence later this year when there are “sufficient” claims submitted by applicants, the minister said. The current reference costs are dated February 22, 2023.
These costs are targeted as being for a “good standard”, he said. Any revised reference costs are only applied to future applications, Minister McConalogue added.
The majority of applicants under tranche 1 of TAMS 3 have now received their approval and claims have now started coming into the DAFM, according to the minister.
The review of reference costs by the DAFM includes several steps, including a review of all the receipted costs, as well as the submitted and supported claims, the minister said.
The latest Production in Building and Construction Index by the Central Statistics Office (CSO) is also taken into account as part of a review of TAMS reference costs, he added.
Quotations are also obtained from at least three separate companies for each of the investment items and the average cost is then calculated for each item, the minister said.