Farmers hard up for criticism after gains

AgricultureIt was hard to escape from the impression last night that farm leaders were desperately looking around for criticisms of the Budget which saw €20 million in concessions come their way.

An increase in the flat rate of VAT refund from 4.4 per cent to 4.8 per cent from January on farm inputs was reckoned to be worth €16 million.

The Minister for Agriculture and Food, Ms Coughlan, who described it "as an extremely good Budget for farmers", estimated that the further reduction in animal disease levies farmers have had to pay was worth €5 million.

Stamp duty relief worth €1 million in a full year was provided for farmers who swap land for the purpose of consolidating farm holdings.

The Minister said that "this valuable relief will help reduce some of the high costs associated with the exchange of farm land, allowing farmers to farm more efficiently in the post decoupled era by facilitating consolidation".

Perhaps the most welcome of yesterday's concessions was in the area of the write-off period for capital investment on necessary investment in pollution control facilities, worth €4 million in a year.

Both the Minister for Finance, Mr Cowan, and Minister Coughlan had said this was necessary to help farmers comply with the Nitrates Directive and other agri-environmental requirements which will allow farmers draw down their EU entitlements.

This was described by the president of the Irish Farmers' Association, Mr John Dillon, as "a positive response in the face of demands on farming from the Nitrates Directive".

Both the general 25 per cent rate of stock relief and the 100 per cent rate for young trained farmers were renewed until December 31st, 2006.

"These reliefs allow farmers write-off some or all the increase in the book value of trading stock for income tax purposes and are worth €2 million per annum to farmers whose stock levels increase in value. These are significant measures to continue to encourage young people to enter the industry," Ms Coughlan said.

Macra na Feirme president Mr Thomas Honner welcomed the renewal of the stock relief measures for young farmers and explained the measures had been due to run out on December 31st.

"Stock relief is a vital measure for young farmers who are trying to grow their business and was Macra's key target in the Budget."

Mr Honner added that the removal of stamp duty on land swaps was welcome. "Farm fragmentation is a major issue for Irish farmers. The elimination of stamp duty on land swaps removes an anomaly which mitigates against sensible farm consolidation."

Mr John Dillon said the Budget recognised the importance of farm consolidation, especially in the face of increased competitive pressures on farming.

He said the stamp duty initiative was a very positive first step in achieving a viable farming sector in the face of major challenges, including CAP reform, WTO and the impending Nitrates Action Programme.

"However, further action is needed on a comprehensive package of measures to support consolidation and aid viability on farms."

The president of the Irish Creamery Milk Suppliers Association, Mr Pat O'Rourke, said that the improvement in capital allowances for on-farm investment, down to three years rather than seven years, was a positive development but said that he was awaiting the announcement by the Government of improved grant rates as recommended by the Brosnan Report.

On the negative side, all the organisations, including the Irish Cattle and Sheepfarmers' Association, accused the Government of favouring PAYE workers by increasing tax credits not available to the self-employed.