ICMSA say forthcoming Budget 2025 is “last chance” to deliver on Programme for Govt commitment to address excess farm income volatility

Speaking following the presentation of ICMSA’s 2025 Pre-Budget Submission to Ministers Chambers and Donohoe, the President of ICMSA, Denis Drennan, said that the forthcoming Budget represented the last opportunity for this Government to make good on the commitment contained in its Programme for Government to address the issue of ruinous excess volatility in farm incomes. Mr. Drennan said that it was simply a matter of fact that the Government had undertaken to deal with the matter and – notwithstanding the fact that several solutions had been provided to it – had so far abjectly failed to make good on its commitment.

“The facts speak for themselves: the year 2023 was extremely difficult from a farm income perspective and – with farm incomes in freefall across every sector – 2024 will be no better. The taxation system is heavily weighted against farmers in terms of income volatility, and we know that most of the State’s 18,000-odd dairy farmers are working for less than the minimum State hourly rate while facing tax bills based on figures that bear no relation to the current situation.   ICMSA has proposed an income volatility measure that will allow farmers utilise funds deposited with the State in a ‘Good’ year which can then be drawn down and used to assist them in exactly the kind of ‘Bad’ year that we’re experiencing right now. The cost to the Exchequer would be absolutely insignificant set against the national budget and any tax liabilities will be paid on these deposits placed under the supervision of the State. The impact at farm level, however, would be very significant and it would allow farmers access to tax-efficient deposits that could ‘tide them over’ in the kind of ‘high input –low prices’ scenario that we are operating within right now. The Government recognised the need for this type of scheme five years ago – and they made a commitment to farmers to introduce just such a scheme. ICMSA is now calling on them to honour that commitment and proceed with such a scheme”, said Mr. Drennan.   

Alongside their call for the long-awaited Income Volatility measure, ICMSA made several other proposals including:

• The need for the Capital Acquisitions Tax and Capital Gains Tax regimes to ensure that the family farm can be transferred to the next generation without a tax burden and to ensure that people buying land for investment purposes cannot use the taxation system to undermine farmers in the land market.
• The illogical and arbitrary exclusion of calf feeders and robotic scraper systems from the VAT reclaim regime needs to be addressed as part of the Finance Bill.
• Clarity is required around the mechanism that will ensure that farm families are excluded from the Residential Zoned Land Tax.
• The need for a well-funded Dairy Beef Calf Scheme delivering €100 to the calf rearer and €100 to the finisher in recognition of the climate benefits of dairy beef and the opportunity to develop a sector that has the potential to deliver strong net foreign earnings.
• The extension of ACRES to 70,000 farmers with a focus on measures that would be suitable to intensive farmers and the delivery of a 70% grant for slurry storage for all farmers.
• The introduction of a private pension regime that takes account of the income volatility in the agriculture sector.

Mr. Drennan called on the Government to recognise the huge contribution made by the agriculture sector at local and national levels and its capacity and record in term of net foreign earnings perspective. The ICMSA President said that the whole sector was in need of reinvigoration and directed supports and he hoped that the Government understood the need for a much more proactive approach that had to start with the ‘wipeout’ of particularly dairy farmer income in the last 30 months.  

“This is the Government’s last chance to show farmers that their word, their commitment, stands for something. The Government has not been positive or engaged with farmers or the wider sector and, bluntly, this is the Government’s last chance to show some degree of honour and fairness with the farming community as we face into the Budget and the likely General Election right behind that”, said the ICMSA President.

Ends      27 August 2024

Denis Drennan, 086-8389401

President, ICMSA.

Or

Cathal MacCarthy, 087-6168758

ICMSA Press Office