Flexible tax system needed, where ‘profits in good years can sustain bad’ – ICMSA

“The government should remember that recovery from the last recession started in the green fields of rural Ireland.” That’s what Pat McCormack – president of the Irish Creamery and Milk Suppliers’ Association (ICMSA) – said after the publication of the body’s pre-budget submission for 2021.

He said that, with a “degree of commitment and imagination, farming and food production could once again play the starting motor role it played in the long recovery from of the last recession”.

Budget 2021: Key issues

McCormack outlined a number of proposals in the ICMSA’s submission, saying that the Brexit risk stands alongside Covid-19 “front and centre” as the “most obvious and immediate challenge to be addressed” in October’s budget.

“Budget 2021 needs to provide for a fund to complement the EU initiatives that have been specifically designed for Brexit-related losses, should they arise,” McCormack said.

“It’s impossible to overestimate the potential damage to our agri-food sector that a ‘no deal’ will cause.”

Reward farmers for protecting the environment

McCormack went on to say that the ICMSA’s pre-budget submission has proposed specific policies that will “help reduce agricultural emissions, while boosting productivity”.

Citing the “ambitious plans for the future of Irish agriculture” outlined in the Programme for Government, McCormack said that the most important recommendation in the ICMSA’s submission is that “adequate funding is made available for an agri-environment scheme relevant to all types of farming”.

These [proposed policies] are real, practical actions; like the reduction to a zero rate of VAT and a 60% TAMS [Targeted Agricultural Modernisation Scheme] grant on all LESS [Low Emission Slurry Spreading] equipment…and a tax rebate system to encourage the use of protected urea.

Income volatility management

McCormack said that the pre-budget submission also outlines the need for farmers to have a taxation system that allows flexibility from year to year, so that “profits in a good year can sustain a family farm through the certain bad years”.

“The ICMSA has proposed the introduction of an income volatility management tool – the Farm Management Deposit Scheme [FMDS],” he explained.

This has been examined closely, is based on already working models and should be a priority in Budget 2021 if the government is serious about supporting the family farm.