- Significant package of targeted tax measures for Young Farmers
- Focus on Environmental Sustainability
The Minister for Agriculture, Food and the Marine Simon Coveney TD today announced details of his Department’s 2016 budget. The Minister emphasised he had delivered on additional funding for the sector for the 2nd consecutive year and this would enable him to continue with targeted investment in the Rural Development and Seafood Development programmes.
Speaking at the announcement, Minister Coveney said “The Exchequer contribution to the expenditure of my Department will amount to €1,351 million in 2016; €1,134 million in current expenditure and €217 million capital expenditure. In this budget I wanted to set out clear priorities in order to maximise the contribution of the agri-food, marine and forestry to the national economy”.
“This represents an overall increase of €109 million over this [2015] year’s figures and, in line with the commitment I made last year, is the second of a series of budgets which will see the Expenditure of my Department increase to take account of key priorities including the Rural Development Programme and the Seafood Development Programme” added the Minister
Rural Development Programme – €494m in 2016
Overall, for 2016 € 494m for investment in the Rural Development Programme – up from €439m in 2015 – an increase of over 12.5%.
“The Rural Development Programme (RDP) will see an investment of €4bn in the Irish agriculture sector over the years 2014-2020. RDP schemes provide vital investment capital in the rural economy, prioritise agri-environmental protection and support the incomes of family farms. My overarching priority for 2016 continues to be to deliver on this Government’s commitments to the farming and fishing sectors.
Agri–Environment Schemes (GLAS, AEOS & ORGANICS) – €203m
€203m will be made available for agri-environmental schemes including AEOS and GLAS. Over 35,000 farmers will benefit under the new Green Low-Carbon Agri-environment scheme which builds on the success of the earlier agri-environment schemes and encourages farmers to operate in an environmentally sustainable manner. “This scheme, when fully open, will support up to 50,000 farmers and require funding of €250 million per annum in future years delivering on our commitment to the sustainable intensification of production and making a vital contribution to the rural economy” added Minister Coveney.
Areas of Natural Constraint (ANCs) – €195m
Announcing the allocation of €195m to ANC the Minister emphasised his continuing strong support for farmers in disadvantaged areas. “These payments represent a significant financial boost for both individual farmers and for the wider rural economy” said Minister Coveney.
Targeted Agriculture Modernisation Scheme (TAMS) – € 35.8m
This €35.8m allocation will provide funding for the Young Farmer Capital Investment Scheme which will be at the higher grant rate of 60%. Also benefitting from the scheme will be Dairy equipment, Organic Capital Investments, Pig and Poultry and Sheep fencing. It will also provide funding for the recently opened Animal Welfare, Safety and Nutrient Storage Scheme and the Low Emission Slurry Spreading Scheme (LESS). Minister Coveney said “the funding of these very important Schemes will encourage the sustainable development of Irish agriculture by providing a range of new investment opportunities to Irish farmers.
Beef Data Genomics Programme – € 52m
Minister Coveney said “€52m in funding for 2016 will be provided for this innovative scheme that places Ireland firmly to the forefront in beef genetics globally and enhances our reputation as a world leader in sustainable food production. Increasing the carbon efficiency of the sector will help to reinforce the uniqueness of our offering on EU and world markets”.
I am also providing an increased provision for the beef sector through the Bord Bia Beef and Lamb Quality Assurance Programme (€6m). The beef sector is also supported through stimulus funding for research and capital investment funding for the processing sector, through the marketing and processing fund (€4.600m). My Department will also provide funding to the beef sector via ICBF to the tune of € 2.2m.
Basic Payments – €1.2bn in 2016
In addition to my Department’s expenditure, in 2016 Ireland will also receive some €1.2 billion in direct funding from the EU for the Basic Payment Scheme. “I am pleased to be able to announce that enhanced payments of 70% under the direct payments scheme will begin to issue to farmers next week. This will be of significant benefit in terms of addressing current issues around market volatility and assist in easing cash flow for farmers.
Agri –Taxation Measures
Minister Coveney welcomed tax changes announced in today’s Budget:
“Last year Minister Noonan and I successfully collaborated on the Agri-taxation Review, the most substantial package of its kind ever introduced in a single budget. However it was not possible to implement all of the recommendations in just one budget, and so I am pleased that additional measures have been announced in Budget 2016”, the Minister stated.
New measures include:
A major new initiative on ‘Family Transfer Partnerships’ to assist succession, on which Minister Coveney commented, “I believe this incentive will encourage important conversations within farm families about succession planning and facilitate the earlier inter-generational transfer of family farms”.
The removal of forestry income from the ‘High Earners Restriction’ for active foresters and farmers, means that clear-felling income will be tax-free. “Forestry plays a huge role environmentally, economically and socially in rural areas; and I believe the benefits of this change will be felt long into the future”, Minister Coveney stated.
The introduction of these and other measures completes the implementation of this comprehensive agri-taxation strategy.
Minister Coveney noted the effect of the changes made in the last budget, “A recent survey by my Department indicates that, in response to the changes in last year’s Budget, there has been a significant shift from conacre to long-term leasing this year. 27% of respondents commenced a new long-term lease in 2015 with almost two thirds indicating that it was the first time they had entered a long-term lease”.
Minister Coveney welcomed the announcement in Budget 2016 that four existing tax measures on stock relief and stamp duty relief have been renewed for three years:
- 25% General Stock Relief on Income Tax
- 100% Stock Relief on Income Tax for Certain Young Trained Farmers
- 50% Stock Relief on Income Tax for Registered Farm Partnerships
- Stamp Duty Exemption on Transfers of Land to Young Trained Farmers.
Agricultural Relief from Capital Acquisitions Tax is also retained. “These are vitally important measures to the agriculture sector, both for young farmers and investment generally”, he said
Marine Taxation Review
Minister Coveney also welcomed the publication today of the independent Marine Taxation Review, which recommends potential areas for support of this key sector through the taxation system. “I look forward to further engagement with Minister Noonan on the implementation of these recommendations, particularly in relation to the proposed extension of seafarers tax allowances to the fishing industry; and the recommendation for appropriate tax treatment to support the fishing vessel decommissioning scheme”
Support for the self-employed and SMEs
In addition Minister Coveney welcomed the changes made to the taxation of the self-employed, “Most farmers, foresters, fishermen and small food processors are self-employed and will see their tax liability fall with the introduction of the new €550 tax credit and reduced USC rates. These changes, along with all of the other changes supporting SMEs in Minister Noonan’s Budget, will bring more equity to the taxation system and will promote and support entrepreneurship”. These changes will mean over €800 in additional net income, or 3.5%, based on the average Family Farm Income[1]. “The increase in the exemption limit for USC to €13,000 will be of particular benefit to low-income farm families”
Minister Coveney also welcomed:
- Reductions in motor tax for HGVs which lowers transport costs for food companies
- The retention of 9% VAT rate for the tourism and hospitality sector
- The changes in tax relief for micro-breweries
- Improvements in Employment Investment Incentive Scheme, which will benefit food SMEs
- Improved CGT relief on sale of a business.
[1] Average Across Sectors – €26,974, Teagasc National Farm Survey 2014
Seafood Development Programme
€147m 2014 – 2020 (EMFF) and €94m national co-funding
Referring to the allocation of almost €147m for Ireland under the new European Maritime and Fisheries Fund 2014-2020 the Minister said “this funding together with the €94m in national co-funding under Budget 2016 will enable me to launch new schemes under the Seafood Development Programme aimed at promoting the sustainable development of the seafood sector to 2020 and availing of the opportunities presented by the growing demand for seafood internationally.
“In anticipation of the approval of the Programme I am providing some €36m to my department, the Marine Institute and BIM to fund the roll-out of capital investment schemes for the seafood sector under the Programme. In 2016, this is expected to include the launch of a range of new investment schemes for the CFP discards ban, decommissioning scheme, sustainability in the inshore fisheries sector aquaculture development, seafood processing, and Fisheries Local Action Groups” the Minister added
Young farmers and Land Mobility
Reiterating his support for young farmers and inter-generational transfer the Minister said “The introduction of the new tax relief for Family Transfer Partnerships in Budget 2016 along with the retention of the General Stock Relief on Income Tax, Stock Relief on Income Tax for Certain Young Trained Farmers, Stock Relief on Income Tax for Registered Farm Partnerships and Stamp Duty Exemption on Transfers of Land to Young Trained Farmers are evidence of this Government’s strong commitment to young farmers. These build on the measures for Young Farmers I introduced in the BPS and RDP and I am pleased to see the additional tax measures included in this year’s budget.
Research and Development – €31.2m
Announcing the allocation over € 31m for the R&D and training sector, the Minister said “ I am fully committed to research and innovation which drives competitiveness, profitability and sustainable economic growth. This funding will also build and maintain critical research capacity and capability in the Irish public research system. In order to help meet the ambitions of Food Wise 2025 and the grand societal challenges of food and nutrition security and climate change we need to invest strategically in agri-food research” .
Horse and Greyhound Industries – €74m allocation in 2016
State support to both industries is provided through the Horse and Greyhound Racing Fund. The Minister announced increased funding of €6m or almost 9% to €74m in the 2016 allocation for the fund. {€4.8 horses and €1.2m for greyhounds}
Farm Safety
Minister Coveney said “This is one subject which I continue to be extremely concerned about and will continue to do everything I can to promote farm safety. As a critical component of the TAMS I have again prioritised Farm Safety and have also made it a mandatory requirement for all applicants to have completed a minimum of a half days farm safety course before they can claim grant-aid”.
Animal Welfare – Voluntary Organisations
Minister Coveney provided additional funding of €0.6m to support the Voluntary and welfare Organisations. This brings the total funding to €2.7m for 2016 – an increase of over 27%. In addition the Minister announced funding of €2.8m to assist local authorities in reducing incidences of horse abandonment and in advancing horse projects for urban and traveller horse owners. “My Department are once again to the forefront on Animal Welfare issues with the recent introduction of Animal Welfare legislation, including micro-chipping of dogs. My Department will continue to prioritise this important area”.
In conclusion, the Minister said “I am confident that the total expenditure package announced in this Budget, amounting to in excess of €2.5bn in 2016, together with the progressive taxation measures announced, will support the development of the agri-food sector in meeting the challenges and opportunities that lie ahead. This is an exciting time for the sector and I expect the impact of today’s Budget to be felt long into the future.
