The carbon tax fund for farming will be €1.5bn up to 2030, the Minister for Agriculture Charlie McConalogue has confirmed.

In an exclusive interview with the Irish Farmers Journal this week, the minister further insisted that not only is the €1.5bn to “ringfenced” for agriculture, but that it is “separate” from Government co-funding of Pillar II.

In total, the carbon tax is expected to harvest €9bn for the Government by the end of the decade

The clarity will provide reassurance to farmers, as there had recently been speculation that some of the €1.5bn was being redirected towards retrofitting domestic homes and funding fuel supports.

In total, the carbon tax is expected to harvest €9bn for the Government by the end of the decade.

In the Programme for Government negotiations, it emerged that €1.5bn of this total would be set aside for farming.

The Irish Farmers Journal exclusively revealed this fund, and that it would be used for an agri-environmental scheme to match REPS in scope and reach. The REAP scheme is the initial pilot scheme under that programme.

The minister did concede that carbon tax is being levied on consumers of fossil fuels such as contractors and farmers, although a rebate is in place for the carbon tax levied on agri-diesel, while the carbon levies on food production are being targeted at farmer producers.

The €1.5bn is separate from the co-funding

There were concerns that budgetary pressures following the massive spend on pandemic measures might see attempts to bring some or all of the carbon tax funding into Pillar II co-funding of CAP, but Minister McConalogue was clear that this will not happen under his watch.

He also confirmed that the carbon tax will be “separate” from the co-funding allocation provided by the Government for CAP Pillar II schemes.

“The €1.5bn is separate from the co-funding,” the minister maintained.

It was challenging to be able to continue all the [Pillar II] schemes this year

Staying with funding-related matters, Minister McConalogue expressed confidence that additional Government funding will be secured in the upcoming budget to enable the rollover of existing CAP Pillar II schemes such as GLAS and TAMS into 2022.

“That’s absolutely my objective, but I won’t be able to guarantee that till after the budget,” McConalogue said.

The minister admitted that an 11% increase in the Department’s funding for 2021 had been crucial in facilitating the continuation of the existing Pillar II schemes this year.

“It was challenging to be able to continue all the [Pillar II] schemes this year,” he conceded.

However, he was very satisfied that the Department had been able to keep the schemes operational without a break in payments for participating farmers.

Budget talks

Minister McConalogue confirmed that he had met with the Minister for Public Expenditure, Michael McGrath, about securing additional funding to allow the Pillar II schemes to remain in place for the second year of the transition to the next CAP programme.

He described those meetings as “constructive” and indicated that the required monies are likely to be made available in the budget to enable the rollover of the Pillar II schemes for 2022.

“I am confident we will be able to do that into next year,” the minister said.