The Irish Co-operative Organisation Society (ICOS) has called for the introduction of an income stabilisation mechanism to combat volatility in the Irish agri food sector. Under ICOS’s proposal, farmers would be able to defer 5% of their gross receipts in any one year. These deferred funds could be drawn down at any point within five years, subject to tax at the time of draw down. In all cases the money must be drawn down within five years.
The Irish Co-operative Organisation Society (ICOS) has called for the introduction of an income stabilisation mechanism to combat volatility in the Irish agri food sector.
Under ICOS’s proposal, farmers would be able to defer 5% of their gross receipts in any one year. These deferred funds could be drawn down at any point within five years, subject to tax at the time of draw down. In all cases the money must be drawn down within five years.
ICOS has urged the Government to introduce the scheme in Budget 2019, having first proposed the measure back in 2015.
Unprecedented
“This is a time of unprecedented and historic uncertainty for the Irish agri food sector,” said ICOS president, Michael Spellman. “Family farm income is fluctuating from year to year due to circumstances outside the control of the farmer.”
He said weather, geopolitical matters such as Brexit, currency, feed prices, oil prices, and disease are all causing income volatility. The proposed mechanism would allow farmers to build a “rainy-day” fund that would support them through difficult periods like 2018, he added.
ICOS said the principle of the proposal was endorsed by the European Commission and that a joint study from Teagasc, CIT and UCC said it could reduce volatility without affecting tax contribution.
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