IFA President warning
IFA President Padraig Walshe said today’s CSO figures confirming a collapse of 30% in farm incomes for Donegal, Sligo and Leitrim farmers this year are a stark illustration of the severe income crisis faced by farm families due to poor commodity prices, Government cuts, the continuing weakness of sterling and the dreadful weather conditions experienced during the year.
Padraig Walshe said “today’s CSO figures mirror the preliminary estimate carried out by IFA two weeks ago, and confirm the devastating year for farm families as prices fell across all sectors. Coming on top of an income drop of 11% in 2008, this represents the worst income crisis for the sector since Ireland joined the EEC in 1973.”
Mr. Walshe said “the Agriculture Minister Brendan Smith must reflect the dreadful income situation in farming at Cabinet and deliver a properly-funded REPS scheme for farmers leaving REPS 2 and 3. He must also ensure there are no further cuts or additional costs imposed on the sector.”
He said Government cuts already imposed across vital farm schemes are now having a major impact on farm income and this will be more severely felt in 2010.
The IFA President said, “the stark reality is that average farm income is now at €13,000, and €16,000 for full-time farmers. The Government proposal to close REPS is simply not a runner as it will collapse the already dire incomes of at least 20,000 drystock farmers and leave them with incomes below €10,000.”
“Already cuts in vital schemes totalling €130m have impacted severely on farm income. Government expenditure on farm schemes accounts for less than 1% of total net Government expenditure and if equity is to prevail, cuts already imposed on the sector must be reversed.”
The IFA President said the Minister for Finance must support the productive agriculture sector through maintaining funding for vital farm schemes, and ensure that changes to the taxation system are equitably applied and do not undermine the competitiveness of the exporting sectors.
Padraig Walshe said, “The proposed Carbon Tax would further increase farm production costs by about €17.5m/year which is a further 1% cut in national farm income. The Minister should exempt farming from the tax because (i) no alternative fuels are available, (ii) farmers cannot pass on the extra cost to the market, and (iii) any further income cut is intolerable. This situation already applies in France where farmers are refunded the cost of the carbon tax there.”
In relation to tax, the IFA President stated that it was vital that the Minister remove the inequities in the taxation system. “The Income Levy discriminates against farmers as sole traders, as they are not allowed deduct capital allowances in determining the amount payable. This must be addressed as a priority in the Budget.”
In addition, taxation changes must not discourage the restructuring of the sector. “There must be no reduction in the rate of Capital Acquisitions Agricultural Relief or other tax incentives that promote structural reform and competitiveness. Rollover Relief for land acquired under CPO must be restored and the 80% CGT windfall gain should not apply to small future gains.”