The Minister for Agriculture, Food and the Marine Simon Coveney TD today announced details of his Department’s 2016 budget. The Minister emphasised that he had delivered on additional funding for the sector for the second consecutive year and this would enable him to continue with targeted investment in the Rural Development Programme (RDP).
“The Exchequer contribution to the expenditure of my Department will amount to €1,351m in 2016; €1,134m in current expenditure and €217m capital expenditure,” said Coveney. “In this budget, I wanted to set out clear priorities in order to maximise the contribution of agri-food, marine and forestry to the national economy.”
“This represents an overall increase of €109m 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 RDP.”
Rural Development Programme: €494m in 2016
A total of € 494m has been invested in the RDP for 2016, up from €439m in 2015. This is an increase of over 12.5%.
“The RDP will see an investment of €4bn in the Irish agriculture sector over the years 2014 to 2020,” said Coveney. “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 and 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 €250m 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 (ANC): €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 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 (BDGP): €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.”
The Department is 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). The 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 the Department’s expenditure, in 2016 Ireland will also receive some €1.2bn 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,” said Coveney. ”This will be of significant benefit in terms of addressing current issues around market volatility and assist in easing cashflow 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.”
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 said.
The introduction of these and other measures (such as the broadening of the SEAIs accelerated capital allowance scheme for energy efficient equipment to non-incorporated businesses) 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. Twenty-seven per cent of respondents started 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
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. “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 the Employment Investment Incentive Scheme, which will benefit food SMEs.Improved CGT relief on sale of a business.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 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 of 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 (€4.8m for 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-day’s 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 is 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,” he said.
Conclusion
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.’’
The Minister for Agriculture, Food and the Marine Simon Coveney TD today announced details of his Department’s 2016 budget. The Minister emphasised that he had delivered on additional funding for the sector for the second consecutive year and this would enable him to continue with targeted investment in the Rural Development Programme (RDP).
“The Exchequer contribution to the expenditure of my Department will amount to €1,351m in 2016; €1,134m in current expenditure and €217m capital expenditure,” said Coveney. “In this budget, I wanted to set out clear priorities in order to maximise the contribution of agri-food, marine and forestry to the national economy.”
“This represents an overall increase of €109m 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 RDP.”
Rural Development Programme: €494m in 2016
A total of € 494m has been invested in the RDP for 2016, up from €439m in 2015. This is an increase of over 12.5%.
“The RDP will see an investment of €4bn in the Irish agriculture sector over the years 2014 to 2020,” said Coveney. “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 and 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 €250m 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 (ANC): €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 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 (BDGP): €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.”
The Department is 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). The 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 the Department’s expenditure, in 2016 Ireland will also receive some €1.2bn 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,” said Coveney. ”This will be of significant benefit in terms of addressing current issues around market volatility and assist in easing cashflow 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.”
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 said.
The introduction of these and other measures (such as the broadening of the SEAIs accelerated capital allowance scheme for energy efficient equipment to non-incorporated businesses) 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. Twenty-seven per cent of respondents started 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
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. “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 the Employment Investment Incentive Scheme, which will benefit food SMEs.Improved CGT relief on sale of a business.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 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 of 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 (€4.8m for 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-day’s 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 is 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,” he said.
Conclusion
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.’’
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