€150 MILLION LOW INTEREST AGRI CASH FLOW SUPPORT LOAN ANNOUNCED
€601 MILLION SPEND ON RDP – RE-OPENING GLAS & BDGP
NEW €25 MILLION SHEEP WELFARE SCHEME & €25 MILLION KNOWLEDGE TRANSFER SCHEME
AGRI-TAXATION : INCOME AVERAGING MEASURE CONFIRMED
INCREASED INVESTMENT IN SEAFOOD DEVELOPMENT & FISHERMEN’S TAX CREDIT
The Minister for Agriculture, Food & Marine, Michael Creed TD today (Tuesday) announced details of his Department’s 2017 budget. Speaking at the announcement the Minister said; “2016 has been a challenging year for farmers, particularly in light of poor commodity prices and the subsequent impact on income volatility. These challenges coupled with the potential impact of Brexit on the Irish agri-food sector have informed the shape of my Department’s budget for 2017 which sees expenditure rise to €1.47 billion in addition to the €1.2 billion from the basic payment/greening measure.”
Addressing the difficulties being experienced by farmers the Minister outlined a three pillar strategy involving the provision of low cost credit, increased investment inside the farm gate, and a set of comprehensive taxation measures.
Commenting on the strategy the Minister said: “to properly address the on-going pressures on farm incomes a strategic approach is required which seeks to provide solutions not just for today – but that will have a sustained impact over the longer term. Therefore I am bringing forward a comprehensive set of measures which tackle head on many of the underlying issues undermining farm incomes for some time.
Low Cost Finance: A €150 million SBCI agri cash flow support loan fund with an interest rate of 2.95% provides highly flexible low cost loans for Irish farmers
Support inside the farm gate: Significant spending on farm gate schemes through the Rural Development programme will see €601 million go directly to farmers in 2017 including a new €25 million sheep welfare scheme, increased participation in GLAS, BDGP & TAMS on top of €1.2 billion through the Basic payment/greening measure. Changes to Farm Assist including more favourable eligibility criteria and a €5 weekly increase, 500 extra places on the Rural Social Scheme, and extended social insurance cover for the self-employed including optical and dental cover
Tax Measures: Thirdly a dynamic set of tax measures including changes to the ‘income averaging system’, a €400 increase in the ‘Earned Income Tax Credit’ and further consideration of an income stabilisation measure completes the three pillar approach to strategically tackling income volatility”
Referring to the potential impact of Brexit for the Irish agri food sector, the Minister commented; “my Department has been preparing for the possibility of Brexit since well before the June 23rd vote. Budget 2017 financially underpins the Department’s mitigation efforts through strategic investment in key areas of the Department, in its agencies and in the agri-food sector. From providing access to an innovative low interest agri-cash flow fund of €150 million, to agri-taxation measures designed to strategically smooth income fluctuations, Budget 2017 provides a robust, pre-emptive response to the Brexit challenge.”
The Minister continued: “supporting and developing our food businesses is central to what we do as a Department. This has never been more acute in the context of the current and potential impacts of Brexit. In Budget 2017, through increased funding of Bord Bia and BIM, investment in R&D and innovation, initiatives such as increasing the definition limit for micro-brewers to 40,000 hectolitres, we are putting forward practical solutions for businesses. Continued engagement with the sector through the Consultative Stakeholders Committee on Brexit, the Food Wise 2025 high level implementation committee and the Departments dedicated Brexit Unit, will ensure that this Department and Government can respond appropriately to emerging needs. €85.5m investment is provided for our vital food safety and animal health measures, which among other things underpin our access to EU and global markets.
The Rural Development Programme and the Seafood Development Programme and the broader Foodwise 2025 strategy are focused on building capacity and improving sustainability, efficiency, growth and competitiveness in the agri-food sector. Minister Creed said: “overall, for 2017, I’m allocating €601 million for investment in the Rural Development Programme – up from €494m in 2016 – an increase of over 21%. This will allow for the re-opening of GLAS to 12,000 more participants as well as BDGP & TAMS, the introduction of a new €25 million sheep welfare scheme and the payment of €25 million through the Knowledge Transfer Scheme. The €241m European Maritime and Fisheries Fund Operational Programme, launched in January 2016, will be further rolled out in 2017 with an increased total budget in 2017 of €43m made available across the Department and its agencies.”
As well as increased investment in the Seafood Development Programme, there are further incentives for those working at Sea. Outlining these incentives the Minister said “I am keen to acknowledge the commitment and hard work of fishermen and the contribution they make to the development of our Blue Economy. It is vital for the development of this sector to maintain employment and attract new entrants to the sector. Therefore, I am pleased to confirm an annual tax credit specifically for fishermen of €1,270. Furthermore I welcome changes to ‘Fish Assist’ including a €5 weekly increase and increased eligibility criteria.”
Note to Editors
In pursuit of the Priorities outlined, the Minister has provided the following for 2017:
€601 million for the Rural Development Programme including: -
€241.7 million for Agri-environmental schemes (Incl AEOS/GLAS/ REPS Organics)
€202 million for Areas of Natural Constraint
€52 million for the Beef Data and Genomics Programme
€50 million for Targeted Agriculture Modernisation Schemes (TAMS)
€25.6 million for Knowledge Transfer Programme
€25 million for the Animal Welfare Scheme for Sheep
€121.5 million for Fisheries, , fishery harbours and marine related NCSSBs – MI, BIM and SFPA - €43.6m of this is for the Seafood Development Programme
€111.6 million for Forestry
€31 million for Research & Training
€85.5 million for Food Safety, Animal and Plant Health including €34 million for TB & Brucellosis eradication and €5.1 million for Animal Welfare
€1.5 million towards the rural innovation fund to support Female Rural Entrepreneurs, social farming and agri-food tourism initiatives( CEDRA)
€241.1 million for Non-Commercial State Sponsored Bodies under the Department’s aegis (Teagasc, Marine Institute, Bord Bia, B.I.M, SFPA)
Taxation Response to Income Volatility
1. An adjustment to the farmers’ ‘Income Averaging’ system, allowing for an opt-out in an exceptional year.
2. Further consideration by Departments of Agriculture, Food and the Marine and Department of Finance of an ‘Income Stabilisation’ measure, whereby some income can be deferred (or saved) in a period of high prices, to be drawn down in a period of lower prices.
Further support measures for SMEs
3. The ‘Earned Income Tax Credit’ increased by €400 to €950. The changes to the USC will also apply.
4. There are also increased PRSI benefits for the self-employed, including eligibility for the ‘Invalidity Pension’.
5. Increase in the limit for designation as a microbrewery to 40,000 hectolitres
6. Introduction of a fishers’ tax credit of €1,270.
Environmental agri-taxation measures
7. The extension of the Sustainable Energy Authority of Ireland’s (SEAI) accelerated capital allowance scheme to non-incorporated businesses.
8. Renewal of Capital Gains Tax Restructuring Relief for a further 3 years.
Changes to the Farm and Fish Assist Schemes
9. Changes to means testing for Farm Assist and Fish Assist will be of benefit to farmers and fishermen who qualify for these social protection payments.
10. The farmer’s flat-rate addition is being increased from 5.2% to 5.4% with effect from 1 January 2017.