When the Government budget for 2026 is announced next Tuesday there will not be any kind of bonanza aimed specifically at supporting Ireland’s farming industry.
The under-pressure tillage sector heard promises at the Ploughing of some support, but even those statements came with caveats around the scope for extra spending amid inter-departmental pressure and the massive increases in spending on TB.
The Ploughing also saw cold water poured on hopes for extra funding for a farm succession scheme. Minister for Agriculture Martin Heydon warned that extra money for young farmers would have to come at the cost of other CAP recipients.
He also said that both he and the Government had always been clear that there would be no room for manoeuvre on a farm succession scheme before the next CAP in 2028.
Beyond tillage and succession, the farming sector would have difficulty this year making a case for further income supports as output prices remained strong during the year.
This scarcity of specific sectoral supports for agriculture, and Government spending promises in other areas, could mean that the budget allocation to that department could fall below 2% of total allocations for the first time (see figure 1).
While it may not be an immediate concern for farmers who have seen reasonable incomes this year, the politics of Government spending mean that getting a larger share of the pie in future, when the need may be greater, will be more difficult.
For the Government, the priorities outlined in the Summer Statement published in July are around spending on infrastructure projects. That report said that Ireland has a 25% infrastructural gap with peer countries and this will be addressed by heavy investment in electrical grid capacity, water infrastructure, housing and transport.
The statement said that “increasing the supply of new housing remains the single-most important priority for Government”.
Beyond capital spending, ministers have been busy briefing about how little extra room there is to reduce the tax burden or to increase current spending. The proposed tax measures amount to €1.5bn while current spending is set to increase by €5.9bn with capital spending rising by €2bn.
On tax, the reduction in VAT for the hospitality sector to 9% has been well flagged. There may be some restrictions on which businesses can avail of it, but even if it is constrained it may account for a third of the value of available tax reductions. This will leave very little room for any changes to the main income tax rates.
There may be changes to the amount which can be earned before entry to the higher rate of tax, or a reduction in the Universal Social Charge, but considering the constraints on the size of the overall tax package, these are expected to be small.
On the social welfare spending side, there may be a matching of last year’s €12 per week rise in welfare payments and a repeat of the increased rates for children’s allowance seen in Budget 2025.
There is unlikely to be a repeat of the once-off energy credits which were made in recent years.
Taoiseach Micheál Martin has said there will be supports for those most in need, so any extra payment will likely be made through the winter fuel allowance.
The reduced VAT rate on energy bills, due to expire in October, is expected to be extended. The cost of that measure will be offset by the annual increase in carbon taxes which will increase from €63.50 per tonne to €71 per tonne from 1 May 2026.
On education, there is no sign of a further reduction in the annual €3,000 contribution fee which third-level students have to pay. However, there are expectations that the household income threshold to qualify for grants towards the fee could rise significantly.
There have been calls for increases to inheritance tax thresholds, particularly in cases where the deceased does not have children.
Fianna Fáil said that it would increase or adjust the inheritance Category A, B, and C thresholds in each budget during this government to reflect the wider increases in property prices in Ireland.
Last year the A category (parent to child) was increased from €335,000 to €400,000, the B category (other family) rose from €32,500 to €40,000 and the C category (other relationship to disponer) increased to €20,000.
There has been some talk around increasing the thresholds by another 20%, but that may not come in this budget. There have also been a push to increase the annual small-gift exemption from €3,000 to €5,000.
On non-tax and spending measures, the big issue for many farmers and agri-food businesses is the expected further increase in the minimum wage.
The previous government committed to introducing a national living wage set at 60% of the hourly median wage by January 2026. This has led to fairly substantial increases in the minimum wage in recent years. While the report from the Low Pay Commission for 2025 has yet to be published, a rise of around 65 cents per hour, which would take the minimum wage to €14.15, is expected.
The Government have previously accepted the recommendations of the commission, and there is no reason to expect any change of direction this year, especially as increasing the minimum wage would have little effect on the budgetary position.
For businesses, the increase will lead to increased labour costs. While only a small percentage of workers are on the minimum wage, the rate will have a knock-on effect for those on higher hourly rates.
Comment
This year’s budget has all the hallmarks of an early-term Government spending plan. While the overall level of spending is set to increase, this will be a long way from a repeat of the largesse seen in the pre-election budget announced a year ago.
The plans for increased capital investment, plus the meeting of the needs of the health service and the potential for other measures to increase the development of the country’s housing stock are all to be welcomed.
But the lack of focus on agriculture, coupled with the structural challenges the sector faces, could well be storing up problems for the future.
Right now, the agricultural industry in Ireland faces demographic challenges which will only get worse the longer they are allowed to continue.
Beef and sheep sectors face threats from increased competition in key markets, particularly in the UK where southern hemisphere imports are on the rise. The dairy sector continues to operate under the shadow of the nitrates decision.
The tillage sector should see some support in the budget, but even then, that is likely to be more like a plaster than the kind of support which would see those farmers achieve the level of financial sustainability needed for the sector to have a viable long-term future.
The expected increase in the minimum wage and the legislated rise in the carbon tax will force on-farm costs higher.
If agriculture falls further down the priorities of a Government focussed on solving a housing crisis, then the industry will inevitably suffer over the longer term.
Budget to be announced on Tuesday October 7.Spending plans focus on housing and infrastructure. Little expected on income tax measures. Rise in minimum wage.Budget for Agriculture may drop below €1 in every €50 of Government spending.
When the Government budget for 2026 is announced next Tuesday there will not be any kind of bonanza aimed specifically at supporting Ireland’s farming industry.
The under-pressure tillage sector heard promises at the Ploughing of some support, but even those statements came with caveats around the scope for extra spending amid inter-departmental pressure and the massive increases in spending on TB.
The Ploughing also saw cold water poured on hopes for extra funding for a farm succession scheme. Minister for Agriculture Martin Heydon warned that extra money for young farmers would have to come at the cost of other CAP recipients.
He also said that both he and the Government had always been clear that there would be no room for manoeuvre on a farm succession scheme before the next CAP in 2028.
Beyond tillage and succession, the farming sector would have difficulty this year making a case for further income supports as output prices remained strong during the year.
This scarcity of specific sectoral supports for agriculture, and Government spending promises in other areas, could mean that the budget allocation to that department could fall below 2% of total allocations for the first time (see figure 1).
While it may not be an immediate concern for farmers who have seen reasonable incomes this year, the politics of Government spending mean that getting a larger share of the pie in future, when the need may be greater, will be more difficult.
For the Government, the priorities outlined in the Summer Statement published in July are around spending on infrastructure projects. That report said that Ireland has a 25% infrastructural gap with peer countries and this will be addressed by heavy investment in electrical grid capacity, water infrastructure, housing and transport.
The statement said that “increasing the supply of new housing remains the single-most important priority for Government”.
Beyond capital spending, ministers have been busy briefing about how little extra room there is to reduce the tax burden or to increase current spending. The proposed tax measures amount to €1.5bn while current spending is set to increase by €5.9bn with capital spending rising by €2bn.
On tax, the reduction in VAT for the hospitality sector to 9% has been well flagged. There may be some restrictions on which businesses can avail of it, but even if it is constrained it may account for a third of the value of available tax reductions. This will leave very little room for any changes to the main income tax rates.
There may be changes to the amount which can be earned before entry to the higher rate of tax, or a reduction in the Universal Social Charge, but considering the constraints on the size of the overall tax package, these are expected to be small.
On the social welfare spending side, there may be a matching of last year’s €12 per week rise in welfare payments and a repeat of the increased rates for children’s allowance seen in Budget 2025.
There is unlikely to be a repeat of the once-off energy credits which were made in recent years.
Taoiseach Micheál Martin has said there will be supports for those most in need, so any extra payment will likely be made through the winter fuel allowance.
The reduced VAT rate on energy bills, due to expire in October, is expected to be extended. The cost of that measure will be offset by the annual increase in carbon taxes which will increase from €63.50 per tonne to €71 per tonne from 1 May 2026.
On education, there is no sign of a further reduction in the annual €3,000 contribution fee which third-level students have to pay. However, there are expectations that the household income threshold to qualify for grants towards the fee could rise significantly.
There have been calls for increases to inheritance tax thresholds, particularly in cases where the deceased does not have children.
Fianna Fáil said that it would increase or adjust the inheritance Category A, B, and C thresholds in each budget during this government to reflect the wider increases in property prices in Ireland.
Last year the A category (parent to child) was increased from €335,000 to €400,000, the B category (other family) rose from €32,500 to €40,000 and the C category (other relationship to disponer) increased to €20,000.
There has been some talk around increasing the thresholds by another 20%, but that may not come in this budget. There have also been a push to increase the annual small-gift exemption from €3,000 to €5,000.
On non-tax and spending measures, the big issue for many farmers and agri-food businesses is the expected further increase in the minimum wage.
The previous government committed to introducing a national living wage set at 60% of the hourly median wage by January 2026. This has led to fairly substantial increases in the minimum wage in recent years. While the report from the Low Pay Commission for 2025 has yet to be published, a rise of around 65 cents per hour, which would take the minimum wage to €14.15, is expected.
The Government have previously accepted the recommendations of the commission, and there is no reason to expect any change of direction this year, especially as increasing the minimum wage would have little effect on the budgetary position.
For businesses, the increase will lead to increased labour costs. While only a small percentage of workers are on the minimum wage, the rate will have a knock-on effect for those on higher hourly rates.
Comment
This year’s budget has all the hallmarks of an early-term Government spending plan. While the overall level of spending is set to increase, this will be a long way from a repeat of the largesse seen in the pre-election budget announced a year ago.
The plans for increased capital investment, plus the meeting of the needs of the health service and the potential for other measures to increase the development of the country’s housing stock are all to be welcomed.
But the lack of focus on agriculture, coupled with the structural challenges the sector faces, could well be storing up problems for the future.
Right now, the agricultural industry in Ireland faces demographic challenges which will only get worse the longer they are allowed to continue.
Beef and sheep sectors face threats from increased competition in key markets, particularly in the UK where southern hemisphere imports are on the rise. The dairy sector continues to operate under the shadow of the nitrates decision.
The tillage sector should see some support in the budget, but even then, that is likely to be more like a plaster than the kind of support which would see those farmers achieve the level of financial sustainability needed for the sector to have a viable long-term future.
The expected increase in the minimum wage and the legislated rise in the carbon tax will force on-farm costs higher.
If agriculture falls further down the priorities of a Government focussed on solving a housing crisis, then the industry will inevitably suffer over the longer term.
Budget to be announced on Tuesday October 7.Spending plans focus on housing and infrastructure. Little expected on income tax measures. Rise in minimum wage.Budget for Agriculture may drop below €1 in every €50 of Government spending. 
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