Responding to the comments of Patricia Callan of the SFA who has called for the introduction of commercial rates for farmers, the ICMSA President, John Comer, described the idea as utterly unproductive and without any connection to reality. Mr Comer said that the thrust of Ms. Callan’s argument seemed to be although the rates system was in need of a “complete overhaul” and was therefore to be considered completely inefficient, that somehow extending this completely inefficient system to a whole new sector of our economy was somehow justified. He said that this proposal was illogical and more or less guaranteed to severely damage the one sector that Ms. Callan had claimed to be doing quite well at present.

 “It seems to me that what is being advocated here is the idea that because one sector of Irish commerce is suffering under an unfair rates system that it somehow represents progress of sorts to spread that unfair system into all areas so that we can all operate under an unfair rates system. How that is meant to benefit the country is anyone’s guess. Ms. Callan would surely accept that, in the main, commercial rates are paid precisely because they are deemed to give the increased commercial opportunities that come with proximity to centres of population; rates are paid because of the footfall the local authority is estimating. That idea is null and void when applied to a farm which by its very nature is removed from population centres and where the concept of footfall is meaningless. This is the essential difference between a farm and an ordinary town or city retail business and it disqualifies the idea that there is equivalence”, stated Mr Comer.

 “Farmers already pay huge amounts in terms of compliance with regulations and inspectorates – far in excess of the amounts paid by comparable businesses in other sectors. If the SFA wants to help the key export sectors – and we presume they do – then we would expect it to be making the case for the reform and abolition of all counter-productive and uneconomic charges rather than their extension into key export sectors. If the SFA thinks the commercial rates system is wrong or inefficient then they should advance arguments to change it or reform it – not to extend it”, concluded Mr Comer.

 Ends      10 May 2012.

 John Comer, 087-2057846

President, ICMSA.

 or

 Cathal MacCarthy, 087-6168758

ICMSA Press Office

The ICMSA has announced that Ciaran Dolan has stepped down from his position as General Secretary of the Association.

 Mr Dolan will continue to work within the farming and food sector as a consultant in agri-business and agricultural policy as well as pursuing a career as a barrister.

 In wishing him the best in his new career, the President of ICMSA, John Comer said that Mr Dolan had provided an outstanding professional service to the Association for over 33  year and had been centrally involved in every major policy issue affecting farming and the agri-business sector over that period.

 “Ciaran’s unique combination of experience, agricultural and economics training, underpinned by professional qualifications in law, equipped him to provide a valued input into policy-formulation and negotiations at local, national and European level. I am pleased to note that as part of Ciaran’s new consultancy business, he will provide specialist advice in relation to policy-formulation to the Association, said Mr Comer.

 For his part, Mr Dolan said that he wished to express his gratitude to the Association and to publicly acknowledge the immense support and friendship he has received from elected officers and the staff of the association down through the years.

 “The challenges and difficulties facing individual farm families and the wider sector have probably never been as demanding or as complex, but the rewards – in terms of the individual and in terms of the sector and the nation – have never been so attainable and so badly needed by both farmers and the country. Realising this potential can only happen through careful and rational analysis and I think that has always been the hallmark of ICMSA. I have no doubt but that this traditional strength of ICMSA will continue to grow and prosper into the future”, concluded Mr Dolan.

 Ends     4 May 2012.

 Queries to Cathal MacCarthy, 087-6168758

ICMSA Press Office

 ICMSA say Yes Vote the only sensible option

 The President of ICMSA, John Comer, has stated that any sensible examination of our options with reference to the upcoming referendum can only result in a recommendation to vote ‘Yes’.

 “We may not like the difficult economic position we are in. We may have different views regarding the cause and solution to the economic crisis but any rational examination will quickly tell you that it is in our best interest to vote ‘Yes’ in the upcoming Referendum”, said Mr Comer, who also confirmed that his Association’s National Council had unanimously endorsed a recommendation to support a ‘Yes’ vote. 

 “Many distortions of the facts and the purpose of the Treaty will be put before the electorate between now and voting day on 31 May.  However, none of these should hide the essential choice to be made which is that we either vote ‘Yes’ and rebuild our economy and our economic future jointly and with the help of our European partners, or we set ourselves adrift as a small open economy with an unsustainable debt level regardless of the cause or origin of that debt. The consequences for all families and business of the latter course are at best uncertain and, at worst, are potentially catastrophic. While everyone with a vote should grasp that essential choice it’s also true to observe that not all individuals would suffer the same as a result of a ‘No’ vote. People who are in secure employment in the public sector, or the non-traded sector, may have the luxury – in the short term – of voting ‘No’ as a protest against a  whole variety of domestic issues, but that luxury does not apply to people depending on the international traded sectors – most specifically, the farming and the food sector.  We do not have that luxury”, stated the ICMSA President. 

 “A ‘No’ vote could very well set in train a chain reaction which would be very negative for business in Ireland – particularly for the export dependant sectors.  The practical instruments necessary for development of our sector like access to credit at rates which are internationally competitive would be very difficult in the event of a ‘No’ vote as we would gradually but inexorably become disengaged from the European scene”, continued Mr Comer. 

 My strong advice to farmers is to be resolute and certain about what needs to be done on 31 May and that is to vote ‘Yes’. Our sector and our families and our future needs a vote in favour of the Fiscal Compact so let’s not leave the decision to others: Let’s take our future in our own hands and do what we can to ensure the result that we need. We need a huge turnout of farmers voting ‘Yes’ and I’m confident that we’ll get it”.

 Ends        1 May 2012.

 John Comer, 087-2057846

President, ICMSA

 or

 Cathal MacCarthy, 087-6168758

ICMSA Press Office

 Commenting on the Minister of Agriculture, Food & Marine’s announcement that Ireland was 0.69% over quota and will suffer a superlevy fine of approximately €11m, Pat McCormack, Deputy President and Chairperson of ICMSA’s Dairy Committee, said that this will present significant challenges for the farmers involved and that Co-ops and their banks must actively assist farmers where cash-flow issues arise as a result of the superlevy.

 Looking forward, Mr. McCormack said that it is essential that the Department and Co-ops agree a consistent and standardised calculating formula for reporting the quota position throughout the year. He described as ‘unacceptable’ the position experienced during 2011/2012 quota year where we had significant divergences between the Department and Co-ops figures with the Department figures being finally proved to be the more accurate. He said that those with responsibility in this area must realise how essential it is that an agreed procedure is put in place that eliminates the inconsistencies for the 2012/13 quota year.

 “Farmers also need to be aware that there is only one more quota increase of a single per cent due on 1 April 2013 between now and quota abolition in 2015 and that ensures that superlevy is going to remain a major challenge between now and then – most particularly in the context of increased cow numbers. As of now, it is highly unlikely that further quota increases will be forthcoming during the period in question. We would remind Co-ops that they do not have to pay super levy fines until 1 September and the collection of fines needs to recognise this. In that context, it’s worth noting that some Co-ops have been deducting fines from some farmers since last summer and ICMSA would point out that if a farmer owes a Co-op a bill, the Co-op charges interest on the amount outstanding. Given that Co-ops have been deducting money from farmers for the purpose of paying fines not due till next September it seems only fair that the interest on those deducted monies should be payable to the farmers concerned”, concluded Mr. McCormack.

 Ends.       25 April 2012.

 Pat McCormack, 087-7608958

Deputy President of ICMSA and Chairman of the Dairy Committee

 or

 Cathal MacCarthy, 087-6168758

ICMSA Press Office

ICMSA point to ‘stark contrast’ between speed of price cuts and the slowness of price increases

 The Deputy President of ICMSA and Chairman of their Dairy Committee, Pat McCormack, said he was very disappointed to note the stark contrast between the speed with which Arrabawn cut their price and the very much slower rate that they employed over the last 18 months when market returns justified immediate and repeated increases in price. Mr McCormack noted that other Co-ops and processors had held their price for March milk and he said that there was no doubt but that Arrabawn could have – and should have – done the same.

 “We’re disappointed that Arrabawn didn’t hold their price for March in the way that other Co-ops and processors have. Our concern is that this decision will be used as a signal by other Co-ops and processors to cut their own prices and we call now on the farmer-directors to ensure that this doesn’t happen and that the modest margins enjoyed by the milk suppliers are protected. It’s worth noting that over the last year, processors and Co-ops were able to completely replenish their cash reserves and most have now built up very sizable cash funds; it is ICMSA’s firm view that those reserves must be called upon first to off-set any downturn in market price and we’d very much like to see the same slow and gradual rate of price adjustment being employed during any downturn as was the case when the market price was moving up and Co-ops and processors were noticeably slow indeed to adjust upwards the  prices paid to their suppliers”, said Mr McCormack.

Ends.         16 April 2012.

ICMSA Submission

To The

Inter-Departmental Group

on

Property Tax

March 2012

INTRODUCTION

The submission will follow, insofar as it is feasible, the structure suggested for submissions.

There are six identified elements in the terms of reference.  It is not intended to make any submission with regard to the first which refers to the immediate financial requirements of the EU/IMF programme.  While this submission is primarily with respect to farm dwellings it will endeavour to cover all other elements of the terms of reference.

DEFINITIONS:

The Property Tax

This term is not defined in the terms of reference.  The only indication of a definition is that it is intended to replace the Household Charge.  It is taken in this submission that the term Property Tax is in effect and is confined to Residential Property Tax.  If that is not the case, it is our view that it should be the case and our submission would be totally different if the Property Tax applied to other property in addition to residential property. For clarity, it is thus taken that the Property Tax envisaged shall not apply to any agricultural land or farm buildings and that appropriate apportionment  formula are applied to cater for residential dwellings on farms. An outline proposal for such apportionment is given below.

Urban Areas / Rural Areas

The methodology used by the CSO to categorise an area as either urban or rural would seem to be appropriate, at least as the basic categorisation grid.  The details of the categorisation are contained in the Annex.

Determination for Property Tax

The proposal from the Commission on Taxation, namely, a tiered Property Tax based on the value of the house, would seem to have a lot of merit.  The valuation would be self assessed by the property owner.  The Commission on Taxation has proposed an eight band tiered Property Tax.  While we would broadly concur with this there are two essential or desired adjustments that should take place.  First, the increase in the Property Tax from one band to the next should be proportionate unlike the proposal from the Commission on Taxation, where, for example, a house with a value of €151,000 would have double the Property Tax compared to a house with a value of €149,000.   Secondly, we would favour a house with the market value (or adjusted market value, see below) below €150,000 having a standard amount of tax.  In addition, given that valuation is self assessed, we propose that there would be a safety zone of a least 20%.  In other words, that there would be no penalty of retrospective claim if the valuation was not lower than 20%.  With respect to valuation clearly it must be market value as distinct from replacement value or insurable value.

With respect to ease of determination and uniform application and to take account of changes in the value of residential property at National or Regional level, it may be appropriate to standardise the value as per base year and use an index in subsequent years to adjust the values.  Indeed, this methodology was part of the Capital Gains Tax code when account was taken of increased valued due to inflation.  The standardisation of value based on a base year plus an annual adjustor is used in England for Residential Property Tax.

Modified or Adjusted Valuation for Farm Dwellings

Arriving at the value of the dwelling on a farm (or indeed dwellings) account must be taken of the special nature of the farm dwelling. Clearly the value of the farm dwelling is lower than the value of an identical property taken in isolation from the farm. It is necessary to introduce a statutory apportionment and various approaches can be adopted. Essentially, a farm dwelling will have restricted value arising from access issues, nuisance factors, restricted services and planning restrictions. The nuisance factors are considerable and would call for a substantial discount on the value of a farm dwelling.

Adjustment for Residential Property in Rural Areas 

In addition to the adjustments described in the immediate above paragraph, a further adjustment is required for all dwellings in rural areas (farm dwellings and non -farm rural dwellings).

In the terms of reference, the purpose of the Property Tax is to provide a stable funding base for the Local Authority sector and, in addition, the Group is tasked to insure the maximum degree of fairness between and across urban and rural areas.  Thus, it is our firm view, that a rebate on the Property Tax should apply to dwellings in rural areas which have a lower level of Local Authority, or indeed, public utility services.  Indeed, the rebate could be graduated to take account of dwellings in cluster development in rural areas as distinct from individual or isolated farm dwellings.

For example, rural areas do not benefit from public sewage connections or public lighting.

Phased Payment

ICMSA favours phased payment, but not necessarily a uniform phased payment on, for example, a monthly basis. Account should be taken of cash flow pattern of business and in particular, farming, which has a marked seasonal pattern of flow with virtually all the positive cash flow occurring in the last two months of the year.

Local Authority Responsibility and National Parameters

We believe that the appropriate balance of Local Authority responsibility and Central Government directions dictates that a Local Authority would be prohibited from fixing a rate of Property Tax above a level set by Central Government and that Central Government could fix a rate at a lower rate than set by a Local Authority for all, or part of, the area of the county having regard to the level and or quality of the service provided in all or part of the county area.

Annex

Based on CSO Definitions – Rural and Urban Areas

Introduction

There are many different territorial divisions of the country of which the most important are described below.

Townlands

The enumeration of the census is carried out, in the first instance, by townlands in rural areas and by streets in urban areas. The townland is the smallest territorial division used for administrative purposes.

Electoral Divisions (EDs)

The smallest administrative area for which population statistics are published is the Electoral Division. In rural areas each Electoral Division consists of an aggregation of entire townlands. There are 3,440 Electoral Divisions in the State.

The term District Electoral Division was changed to Electoral Division by Section 23 of the Local Government Act, 1994. S.I. 196 of 1996 refers.

Town and Rural Areas

Electoral Divisions are aggregated to give Towns (or cities where appropriate) and Rural Districts which, in turn, build up to counties. The Rural districts, which numbered 160, were abolished as administrative areas in 1925 (in the case of Rural Districts in County Dublin, in 1930) but have been retained for census purposes as convenient units of area, intermediate in size between Electoral Divisions and Counties.

Counties and Cities

Under the Local Government Act, 2001 (S.I. 591 of 2001), the areas formerly known as County Boroughs are now called Cities. Areas formally known as Municipal Boroughs are now called Boroughs. The area of North Tipperary Riding and South Tipperary Riding are now known as North Tipperary and South Tipperary, respectively.

Towns

Towns with legally defined boundaries consist of:

(1)               five cities;

(2)               five boroughs;

(3)               75 towns.

Under Section 62 of the Local Government Act, 1994 (S.I. 171 of 1994), the following six towns ceased to have town status: Callan, Fethard, Newcastle West, Rathkeale, Roscommon and Tullow. The Towns Improvement Act has now ceased under the Local Government Act, 2001 (S.I. 591 of 2001). Under this act the areas previously known as Urban Districts are now called Towns, as are the 26 towns which were formally towns under the Towns Improvement Act.

Regional Authorities

Eight regions were established under the Local Government Act, 1991, Regional Authorities Establishment Order, 1993 which came into operation on 1 January 1994.

Two further Regional Authorities to be known as Regional Assemblies were established in 1999 under the Local Government Act, 1991, Regional Authorities Establishments Order, 1999 (S.I. 226 of 1999 refers). The two assemblies are based on the Existing Regional Authority Structure and are as follows:

Name of Region                                               Constituent Local Authorities

Border, Midland and Western                           County Councils of Cavan, Donegal, Galway,

Regional Assembly (BMW)                              Laois, Leitrim, Longford, Louth, Mayo,

Monaghan, Offaly, Roscommon, Sligo and

Westmeath and Galway City Council.

South and Eastern Regional                               County Councils of Carlow, Clare, Cork,

Assembly (S&E)                                              Dun Laoghaire/Rathdown, Fingal, Kerry,

Kildare, Kilkenny, Limerick, Meath, South

Dublin, North Tipperary, South Tipperary,

Waterford, and Wicklow and the City

Councils of Cork, Dublin, Limerick and

Waterford.

_________________________________________________________________________

 The Deputy President of ICMSA and Chairman of its Dairy Committee, Pat McCormack, has once again expressed concern about the prices being paid for quota in the latest exchange with prices varying from 8 to 50 cents per litre. McCormack repeated his organisation’s opinion that the prices being paid in some Co-ops made absolutely no commercial sense and he warned that we are confronting ‘a bubble’ linked to the abolition of milk quotas in 2015.  

 “The increase in the price of quota in the last two exchanges has to be of concern to both individual farmers, and to the sector generally, with the average price at national level effectively doubling in twelve months. The reality is that we have seen a dramatic and unjustified explosion in the cost of quota.  Regardless of the means of assessment and by any conceivable measure, these price increases make no commercial sense”, stated the ICMSA Dairy Chairman.

 “Some Co-ops have a case to answer here through their failure to set out – in a comprehensive and credible fashion – their complete plans post quota-abolition in 2015.   We have as well a raft of speculation and announcements on some aspects of their post-2015 policy made by some Co-ops, all allied to a steady stream of notices and warnings to milk suppliers regarding seasonality penalties and possible capital contributions schemes post April 2015, which are all contributing – and in my view, unnecessarily – to this substantial inflation in milk price.  There is a bubble and ultimately it will be dairy farmers who will pay for it.  At a time when quota prices should be falling, the opposite is the case.  We all know this but people who should be giving more direction and speaking out on these matters have chosen to remain silent.   ICMSA wants Co-ops set out their plans clearly for farmers to see in a manner that will then (the farmers) to plan in a logical and commercially sensible manner that it itself  based on their Co-ops’ policy”, stated Mr McCormack.

Ends.

Pat McCormack. 087-7608958

Deputy President, ICMSA and Chairman of the Dairy Committee

Or

Cathal MacCarthy, 087-6168758

ICMSA Press Office

ICMSA say likely grant changes are ‘a sop’ to anti-farmer sentiment

 The President of ICMSA, the state’s specialist dairy farmer organisation, has promised that his association will immediately begin a campaign of lobbying against the changes they suspect likely to be recommended by the Capital Assets Implementation group whose existence was confirmed by Minister Ruairi Quinn in a letter to ICMSA last week. John Comer said that the farm organisation will have established contact with every Dail deputy by the weekend and set out, in the most unambiguous and trenchant terms, what they say is the manifestly unfair and unjust situation that will result if farmers’ children find themselves declared ineligible for Third Level grants – not on the basis of their family incomes, but on the basis of an arbitrary value attached to the assets or tools used to earn that income. Mr Comer said that it was a fundamental principle of fairness that eligibility in these matters would be decided on the basis of income. It was now becoming apparent, that the Government and Minister Quinn were prepared to move past that principle and decide eligibility on the basis of a certain, very specific – and in this case, very specifically anti-farming – context.

 “We are absolutely determined that this attempt to effectively disqualify a large number of the children of farming families from any possibility of receiving Third Level grants will be resisted to the utmost. The Minister might like to pretend that that is neither the intention nor the likely effect; but that is to deny the facts of the matter and the logical consequence of the move already announced. Our submission to this Capital Assets Implementation group is that the value of farmland and associated farm buildings must not be included in any formula for assessment for grants eligibility. It should not be included on the simple basis that the market value placed on farm land bears absolutely no relation to the income being earned off that land by the owning farm family. The only fair and transparent means for assessing eligibility for Third Level grants is income. Bringing the value of farm land ‘into the mix’ is a deliberate move to discriminate against farm families in order to appease those who believe in what Minister Quinn himself is on record as describing as the ‘urban myth’ of farmers’ sons and daughters being over-represented in the numbers of students qualifying for grant assistance”, said Mr Comer.

 “The Government and all its deputies, where they are intent on introducing a new set of rules in a matter as fundamental as this, are duty-bound to ensure that the new system is fair, equitable and transparent. To include the value of agricultural land as an additional component to farm incomes in measuring eligibility is double-counting and it should be called what it is. It’s an affront to fairness and a sop to that very vocal group in Irish society that is anti-farmer without any reference to the real financial facts of farming”, concluded the ICMSA President.

Ends      14 March 2012.

John Comer, 087-2057846

President, ICMSA

or

Cathal MacCarthy, 087-6168758

ICMSA Press Office.