Split payments system ‘the way to go with TAMS’

The Irish Creamery Milk Suppliers Association (ICMSA) has proposed a system of split payments for investments made under Targeted Agricultural Modernisation Schemes (TAMS).

The idea is to increase uptake and to improve the financial viability of the projects involved, according to the ICMSA Chairperson of the Farm and Rural Affairs Committee, Patrick Rohan.

He said feedback from the organisation’s members suggests that farmers are committed to completing the investments involved – but, in many cases, difficulties relate to the cash flow pressures that come with these investments.

In general, according to Rohan, farmers would have submitted one application for TAMS that would involve a number of distinct, separate investments on their farm.

Under the present structure, farmers must finish all the investments that were applied for before any payment is made. This, the chairman added, is leading to fears over cash flow.

The ICMSA takes the view that the solution is for the Department of Agriculture to bring in a system of split payments – the department would make a payment under the scheme for a distinct investment within an application.

Rohan outlined an example whereby a farmer applies for a calf house, a loose house and a silage slab. If the calf house is completed first, the farmer should be allowed to submit a payment application for it, get paid and then continue with the next phase of the investment.

But, as things currently stand, the farmer must complete the three separate investments before any grant is paid.

The chairman said if such a change was made, it would substantially ease cash flow fears for farmers – while also freeing up cash for the next investment stage. In addition, this should reduce banking costs.

There would be benefits for the department as well; such a move would ensure that the annual budgetary allocations for TAMS are better used and it would improve the management of the scheme, Rohan said.

According to the chairman, a split payments system for distinct investments would also promote financially sustainable methods of investment.

Rohan concluded by highlighting that the department had successfully employed a similar system in the past, with the ICMSA set to raise the issue with the Minister for Agriculture, Michael Creed, shortly.