Budget will mark the end of honeymoon period for Minister.

Next week’s budget is the first chance for the current Government to show it not only recognises but is prepared to respond to:

1. The current income crisis on Irish farms.

2. The uncertain outlook for the sector in light of Brexit and depressed global commodity prices.

It is the first opportunity for Minister for Agriculture Michael Creed to prove to farmers his ability to defend the interests of agriculture around the Cabinet table. Given the severe hardship that has faced many farmers since he took office in May, Minister Creed has in many ways received a relatively easy ride. Farmers have traditionally given a newly appointed minister time to familiarise themselves with their brief, but next week’s budget will mark the end of the honeymoon period.

In the case of agriculture, the 2017 budget should be assessed under four main headings:

1 The range of measures included to address short-term income challenges facing farmers, who have seen their incomes wiped out due to factors totally outside of their control – adverse weather conditions, the slump in global commodity prices and the shift in exchange rates in the aftermath of Brexit. There can be no hiding behind EU state aid rules when it comes to delivering temporary assistance. To see the scope that exists we only have to look to France, where a package of measures valued at €500m was introduced by government to help struggling farmers.

2 The extent to which the level of investment in farm schemes is increased. The two big-ticket items are the increased level of funding for GLAS and ANCs. In its pre-budget submission, the IFA set the bar at €250m (necessary to fund over 50,000 farmers) and €225m for the two schemes respectively. Meanwhile, Minister for Social Protection Leo Varadkar has indicated changes to Farm Assist and the Rural Social Scheme. Cuts to the schemes since 2012 and the abolition of income and child disregards in 2013 have seen the number of farmers on Farm Assist fall by 25% – clearly not a reflection of the income trends in farming over the period. To be meaningful, any change must include a reinstatement of income and child disregards.

3 The introduction of a tax system that will assist farmers in dealing with income volatility. After extensive lobbying, there appears to be recognition by the Government that the current taxation system neither serves the interests of the State nor farmers. The two options receiving most attention are a form of income sheltering and the IFA proposal to adjust the income averaging model. Both serve a similar purpose, effectively allowing farmers defer tax liability during periods when incomes collapse. The IFA is also calling for the abolition of restrictions preventing farmers using income averaging where the farmer’s spouse is in self-employment.

4 Action taken to ensure farmers have access to credit at competitive rates. The lack of competition in the banking sector has been lamented for too long without any meaningful action. With recent changes to state aid de minimis rules increasing the upper limit to €15,000, there is clear scope for the introduction of a meaningful State-backed low-interest loan scheme that would help farmers bridge short-term cashflow challenges.

While there will be plenty of competing voices around the cabinet table, Tuesday’s budget must reflect the crisis in farming. In recent months we have seen trade unions beating a path to Government demanding huge pay increases – each armed with the threat of causing major disruption to public services. Leaving aside the merits of trade union demands, the Government simply cannot ignore that many farmers this year will not only see their income completely wiped out in 2016, but are facing into a winter where a fodder crisis is a real possibility, particularly along the western sea board.