THE IRISH Farmers’ Association is an extremely effective lobbying organisation and, on occasion, it exaggerates. Decades may have passed since Percy French wrote the well-known recitation piece: “We’ll all be ruined, said Hanrahan”, but the underlying attitude remains.
The most recent manifestation of this gloomy approach was a declaration by IFA president John Bryan that proposed changes to the EU Common Agricultural Policy could cause a 30 per cent fall in farm production; a collapse in economic output of €1.25 billion a year and the loss of thousands of jobs. His statement grabbed the headlines, but was it well-founded?
Mr Bryan based his conclusions on a leaked proposal from Brussels that would introduce flat-rate, single farm payments and severely hit the incomes of the largest, most productive farmers. Flat-rate payments, he said, were totally unacceptable, as they didn’t take into account the productive capacity of the land. Strangely enough, that is precisely the case made by the EU Commission’s proposals, which suggest that the maximum amount of funding available to large, commercial farmers should be capped.
Before people get carried away about the possible collapse of an industry that is making a significant contribution to economic recovery, it is important to put this matter into context. Cap reforms will not be introduced until 2013 and negotiations are not expected to conclude until next year, at the earliest. Following the last negotiating session in Brussels, Minister for Agriculture Simon Coveney said there had been agreement to allow member states decide on the distribution of available Cap funds to their farmers. If flat-rate systems are introduced to offset additional support for small farmers, it is likely to be done by Government, rather than Brussels.
There is another reason why farming organisations might find it useful, at this time, to wave a stick at Government. Farmers are doing extremely well in this recession. Prices for most agricultural commodities have grown rapidly, reversing earlier income falls. Already this year, factory gate prices have risen by about 11 per cent and farm output and prices are expected to increase further.
With the EU-IMF troika directing the Government to raise extra revenue from capital gains tax, capital acquisition tax and stamp duty this year, farm bodies are worried they will lose their special exemptions. Any increase in tax, they warn, will reduce the growth potential of the sector. Sounds familiar.