Dempsey at Large: budget - a watershed

Last week, we said we were now, in some key respects, more like Luxembourg than France, not clearly in an agricultural production sense, but in a national financial and cost sense.

The provisions of last week’s budget underlined this new reality. I was fascinated to hear the ministers for public expenditure and finance refer to greenhouse gas reduction policies and biodiversity as well as both referring to the agri-food sector as our largest indigenous industry.

At the same time, they both referred to the fragility of multinational corporation tax revenue. Given that fragility, they were right to spend some of the windfall on one-off measures that don’t involve annual spending commitments, but that doesn’t excuse government not having a coherent plan for agriculture.

Income volatility

In the ministers’ speeches, there were two key items. The first was the policy of developing a policy to deal with income volatility “especially in dairying”.

Why dairying was singled out was not clear, as income volatility has been at least as great in the tillage, pigs and even egg sectors but nevertheless, the realisation that some income-stabilising policies are needed is now clearly acknowledged.

The second key announcement was the €30m to be given as a top-up to tillage farmers on crops planted for the 2024 (this year’s) harvest.

While there was some confusion as to what year this would apply to, the confirmation carried in the Irish Farmers Journal from the minister was unequivocal.

State aid rules

While this is less than the €60m asked for unanimously by the Tillage Vision Group, nobody would deny that it’s a useful start. The striking aspect about the €30m is that there was no mention of Brussels clearance and abiding by State aid rules.

The reality is that following the EU heads of government meetings in March and April, there is now a far more permissive attitude to extra individual national exchequer funding.

Government has now clearly to formulate a policy taking into account the changed circumstances surrounding extra national funding to farmers, the capacity of the Irish exchequer to deliver it and the need of Irish farmers for it.