Next week’s budget will be the largest in the history of the State, with total Government spending allocations for 2024 likely to come close to €100 billion.

With every lobby group (and minister) working hard in the lead up to next Tuesday to maximise their slice of the pie, it’s worth taking a look at how the Department of Agriculture will fare.

Agriculture generally gets between 2% and 2.5% of Government spending.

A repeat of that outrun this year would see a boost in funding for the Department of around €150 million to a total allocation of €2.3 billion.

However, this may be difficult to achieve due to the source of funding over recent years. In 2021, ‘22 and ‘23 there were one-off items in the budget which helped Department funding grow and maintain its share of the total budget.

With the Brexit Adjustment Reserve on its last legs and Covid payments nearly a thing of the past, there will need to be a jump of almost €500 million in current and capital allocations to agriculture for the Department to maintain its share of the pie [See Figure 1].

When it comes to spending the Department’s budget, the main farm organisations have plenty of ideas, with payments for slurry storage, a fresh ACRES, extensions of stamp duty and other reliefs for agricultural land transfers among the measures demanded.

In specific sectors, there are calls for higher payments per cow for suckler farmers, a jump to €30 to €35 per head in the Sheep Improvement Scheme, and a €100 per head payment to dairy farmers for the rearing of calves.

Tillage farming

Tillage, a sector that seems to be getting hit from all sides at the moment as the wrong weather at the wrong time caused a plunge in yields this year, while serious competition for land from the dairy sector is likely to cause a considerable drop in area planted next year.

The immediate problem for farmers in the sector is cash, and Minister for Agriculture Charlie McConalogue has announced a €28/ha payment starting in January of next year.

That money is coming from €9.5m in crisis reserve funding and had to be approved by the EU. Farm organisations have asked for another €19m from Department funding to add to the reserve total.

The longer-term future of tillage is where the real support in this budget will be needed.

The Climate Action Plan calls for 400,000 ha in the sector by 2030.

This year saw a move in the wrong direction, with further slippage expected in 2024.

Reaching the target in six years is an extremely challenging task where the first job for the Government is to stop the loss of land from the sector.

The Climate Action Plan’s 2030 ambitions spread well beyond tillage and once again the organic sector is expected to receive extra funding allocations to meet demand from farmer entrants to the business.

Renewables

In agriculture-adjacent industries, there are calls for more to be done to support the rollout of renewable energy investments across the country.

Among the key demands are more resources to speed up planning for wind generation, changes to capital acquisitions tax and capital gains tax for solar developments, a fund to help with capital expenditure on anaerobic digester plants, and a new grant for battery storage systems.

There are also calls for a reduced VAT rate for all renewable systems. Stephen Robb has the full breakdown here.

When it comes to measures which are not specific to the farming industry, it seems from what we know so far that this budget will have something for everyone.

  • It is all-but certain that the hike in excise duty on petrol and diesel scheduled for the end of this month will be postponed. Another energy credit is also expected, but it is unlikely to be as generous or universal as the €600 contained in last year’s budget.
  • Changes to the Universal Social Charge are expected to lead to a reduction in tax bills, but there is no hope of the charge, introduced in the wake of the financial crisis and bank bailout, being abolished despite the Government’s very strong revenue position.
  • There are expectations that the entry point to the higher rate of tax will increase. However, as it was already raised this year, another large widening of the band is unlikely.
  • There is almost certainly going to be an increase in PRSI. It has already been flagged that the decision to keep the pension age at 66 will lead to gradual increases in PRSI to fund what will be ever-increasing costs as Ireland’s population ages.
  • Social welfare payments are expected to rise by around €12 a week while the Christmas double payment will also continue.
  • There may also be an extension of child benefits, a possible extension of the free school books scheme to secondary schools, a reduction in third-level student fees, and a substantial increase in student grants.
  • The help-to-buy scheme for first-time home buyers is likely to be extended for another year. It is unlikely that any mortgage interest relief will be introduced in this budget as it is seen as a particularly complex tax measure to get right.
  • There will be an increase in the renters’ tax credit. Taoiseach Leo Varadkar also promised measures to support the small landlord sector, so expect something there.

    • A pack of cigarettes will probably go up by 50 cents and the Government may announce a special tax on vaping products. Overall, the rapid increase in the cost of living has been the major issue for people in Ireland over the past couple of years.

    The Government will seek to cast its net as wide as possible in this budget for as many people as possible to see a benefit in 2024.

    With an election due by the spring of 2025, this budget has to be seen as an election campaign issue.

    Unfortunately for agriculture, the political pressure to lift as many boats as possible may reduce the size of the pot available to support Irish farmers.

    If the total allocation to the Department comes close to €2.5 bn, then that will have to be seen as a victory.