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Creed Announces €1.6 Billion DAFM Budget for 2019

“€78m Brexit Package for Farmers, Fishermen & Food SME’s”

Minister for Agriculture, Food and the Marine, Michael Creed T.D., today announced details of his Department’s 2019 Budget. Speaking this afternoon, the Minister said:

“Against the background of the overarching requirement for a balanced budget in 2019, my priority has been to deliver measures designed to help farmers, fishermen and food SME’s to navigate the challenges of Brexit. I also wanted to support those in the most disadvantaged areas, while maintaining the ambition for the development of the food industry”.

Today’s Estimates provide for a gross Vote of €1.596 billion for the Department. In addition, the Minister said that he would be seeking sanction from the Minister for Public Expenditure and Reform to carry over an additional €20 million in capital funding, to bring the total provision for 2019 to €1,616m, including €275m for capital and €1,341m for current expenditure. This is in addition to approximately €1.2 billion in direct EU payments administered by the Department.

Referring to Brexit, the Minister said:

 “I have made provision for a Brexit Resilience Package of €78 million for the Agri Food sector for 2019.  This includes a range of measures to support farmers and industry, against the background of the challenges that lie ahead. “

The measures announced by the Minister include €44m of direct aid for farmers, comprising 

  • An additional €23m for farmers in Areas of Natural Constraint (ANC),   allocation for 2019, bringing the allocation for 2019 to €250 million.   This is a 24% increase over the last two years and essentially restores ANC payments to the level prior to the economic downturn. 
  • The introduction of a €20m Beef Environmental Efficiency Pilot scheme. (BEEP) This is a new pilot scheme targeted at Suckler farmers, and  aimed at further improving the economic and carbon efficiency of Irish beef production.
  • An additional €1m in funding for the horticulture sector, bringing the total provision for a sector particularly challenged by Brexit to €6 million.

Minister Creed has also provided capital €27 million in Brexit related supports for the food industry comprising:

  • €13 million in supports for food industry competitiveness and innovation;
  • €3 million for Artisan and Micro food and beverage programmes through the Leader Programme and for LEAN manufacturing initiatives designed to improve competitiveness
  • an additional €5 million for Bord Bia, bringing the total Grant in Aid to €46.6 million. This is a 60% increase in funding for marketing and promotion of our food offering since 2014;
  • €6m in funding to progress an €8 million Food Innovation Hub in Teagasc Moorepark, of which €2 million was provided in 2018.

Referring to work on Brexit preparedness within his Department, the Minister said that he had provided €7m for staff and IT costs arising from additional import control and export certification requirements arising as a result of Brexit.

In addition to the Brexit Resilience package, the Minister acknowledged the announcement in the Budget by his colleague Minister Donohoe of a key Government Brexit response, the “Future Growth Loan Scheme”, which will be rolled out in 2019 and for which he had made provision of €25m in 2018. The scheme will provide long term, unsecured investment finance for farmers and small scale companies in the food and seafood sectors.

The provision for the Department’s Seafood Programme has been increased by €6 million, to a total of €133.8 million, and this will help fund vital investment in Castletownbere and Killybegs fishery harbours. The budget provision will also allow the Marine Institute to commence the planned replacement of the 21 year old Celtic Voyager with a new 50m modern research vessel that will provide critical national infrastructure to enable Ireland to address the considerable challenges of Brexit and the Common Fisheries Policy as well as climate induced impacts on our oceans. 

Referring to continued investment in the rural economy and in on farm schemes the Minister continued; “Our commitment under the Rural Development Programme (RDP) for 2019 is €638m. This includes a commitment under the Agri Environmental measures of €203m and €70m for the Targeted Agricultural Measures (TAMS). 

An increased allocation of €4m for 2019 has also been provided to assist with the strategic development of the Horse and Greyhound sector

Minister Creed welcomed the publication by the Minister for Finance of the “Progress Implementation Update of the Agri-taxation Review 2014”: “This shows the excellent progress made between our two Departments over recent Budgets with the implementation of almost all of the 25 recommendations, which has resulted in positive changes for Irish agriculture, especially in the areas of land mobility and succession”.

Against the background of this Review, Minister Creed had sought a number of agri taxation measures, which he welcomed today:

  • The lifting of the restriction under Income Averaging whereby farmers with additional self-employed income (for either themselves or their spouses) could not participate. The Minister said; “One of my highest priorities has been to develop an effective response to income volatility. Income Averaging is a useful tool in successfully managing volatility and I am particularly pleased with the announcement that it will be available to more farmers”.
  • Important reliefs for the sector have been renewed for a further three years:
    • Stamp Duty Exemption on Transfers of Land to Young Trained Farmers
    • 25% General Stock Relief on Income Tax
    • 100% Stock Relief on Income Tax for Certain Young Trained Farmers
    • 50% Stock Relief on Income Tax for Registered Farm Partnerships.

Minister Creed commented; “These reliefs enable investment and the young trained farmer measures are especially important in supporting young farmers and generational renewal”.

Minister Creed also welcomed:

  • The increase in the Earned Income Tax Credit by €200 to €1,350and increased supports for the self-employed. Most farmers, foresters, fishermen and small food processors are self-employed and will see their tax liability fall with the increase in the tax credit.
  • The Minister for Finance’s decision to maintain the VAT flat rate addition for unregistered farmers at 5.4%.

The Minister concluded; “I believe that the package of measures announced today will support the agri-food sector and assist us focussing on competitiveness, innovation, new market development and environmental sustainability – all key themes of the Food Wise strategy, and the best response we can make to the uncertainty and challenge posed by Brexit.”

 ENDS

Date Released: 09 October 2018