In advance of the upcoming budget, the Farm Tractor & Machinery Trade Association (FTMTA) is calling on the Government to consider making available increased capital allowances for investment in farm machinery.
The association has highlighted that the purchase of modern agricultural machinery is a major capital investment for a farmer or an agricultural contractor and, in light of the scale of that investment, the available capital allowances are an important factor in the purchase decision. Agricultural machinery currently qualifies for wear-and-tear allowances as plant and machinery at a rate of 12.5% per annum on a straight line basis.
The FTMTA believes that such a provision is inadequate and takes no account of either the cost or rapid development of modern farm machinery.
The FTMTA has called on Minister for Finance Paschal Donohoe to put in place a programme of accelerated capital allowances to facilitate the purchasers of such equipment in their investment and stated that the introduction of such a measure would result in twin benefits to the Irish economy in both the farming and machinery sectors.
Necessary investment
Accelerated capital allowances for machinery would allow Irish farmers to invest in the machinery required to deliver the increased output called for in the Food Harvest 2020 and Food Wise 2025 strategies.
The growth in production required to meet the targets set under these plans necessitates more efficient and environmentally sustainable growth at primary producer level than heretofore.
The targets for increased agricultural output will require the support of increased agricultural mechanisation both in terms of scale and technology and such advances will require substantial investment.