There has been a high volume of queries over the last week regarding the review of Targeted Agricultural Modernisation Scheme (TAMS) reference costs.

There were changes across 65 investment items, with 62 of these increasing in cost and three decreasing.

The allowance for an applicant’s own labour (relates to their own labour input or that of a family member) has also increased by 10%, or by €1.35/hour, to reach €14.85/hour.

In his announcement, the Minister for Agriculture Charlie McConalogue highlighted that in the case of increased costings the magnitude of the rise ranges from 5% to 40%, while for the decreased reference cost the range is 10% to 30%.

Cost analysis

The Irish Farmers Journal has reviewed each costing and the tables on pages 40 and 41 outline each item and the scale of the increase/decrease.

It is a straightforward process to outline decreased costings. The reference cost for a direct drill has fallen by the largest figure of 30%, while a trailed combined tine and disc cultivator and a GPS standalone unit have decreased by 10%.

While the scale of the reference cost increases ranges from 5% to 40%, our analysis shows that most items have experienced upward movement of 10%. This applies to all animal housing items detailed in Table 2, with the exception of automatic slurry scrapers which have increased by 15% and meal bins, which are now costed 20% higher.

There are some notable inclusions and omissions, some of which have already been highlighted by farmers/advisers studying costs in recent days.

Almost all items in animal handling facilities have recorded an increase. The exception is a calving gate in an existing house, which is unchanged. A mobile cattle crush has received a 20% higher costing, as has a calf dehorning crate.

It is a similar situation for sheep fencing and sheep handling equipment. The reference cost for standard sheep fencing has increased by 15% to €6.14/m but the rate of €8.01/m for mountain sheep fencing is unchanged, as is the cost for a new gateway.

A fixed sheep handling unit, with or without a dip tank, is now costed 10% higher, while there is no change to any mobile sheep handling equipment.

The two highest increases of 40% and 30% are for an on-demand water heater and a heat transfer unit, taking heat from the compressor, for dairy, respectively.

Subsequent review

The Department of Agriculture states that the review of the reference costs was based on a detailed analysis of the costs of completed works up to the end of March 2021. Many in the industry comment that these costs do not fully take into account the sharp increase in steel and timber costs, in particular.

This claim has been acknowledged by the Department, with Minister McConalogue stating: “I recognise that costs are changing on an ongoing basis and my Department will commence a further review immediately to ensure costings are kept as current as possible.”

Payment runs for TAMS continue on a weekly basis at an average of €1.3m in recent weeks. There has been €34m in payments issued in respect of completed investment works this year, bringing total payments issued to over €298m.

The total number of approved applications which have received payment since the opening of TAMS II stands at 21,500, with over 1,000 further applications submitted and currently being processed.

Commenting on the payments, Minister McConalogue said: “I am very pleased with payments and I would like to encourage farmers out there with outstanding approvals to conclude the investment work and apply for the payment as soon as possible to facilitate the prompt issuing of payments.”

A new application process for specific dairy investments was announced last week by Minister Charlie McConalogue and came into play when tranche 23 opened for applications on 24 July.

The change requires that to receive grant aid funding for a milking machine, dairy structure, milk storage and cooling equipment or in-parlour meal feeding system, the farm must be compliant with farm waste and farm nutrient storage requirements at the time of application.

These farm waste and storage requirements are laid down in Statutory Instrument SI No 31 of 2014 European Union (Good Agricultural Practice for Protection of Waters) Regulation 2014 up to 31 December 2017 and with Statutory Instrument (SI) 605/2017, European Union (Good Agricultural Practice for Protection of Waters) Regulations 2017 from 1 January 2018.

This ruling has already been in place for investments relating to farm waste and farm nutrient storage, with applicants required to provide evidence to prove compliance.

The change has been published in updated Dairy Equipment Scheme terms and conditions, but the Department advises that its TAMS IT system needs to be upgraded to allow for the necessary information to be recorded and, therefore, it will not be possible to submit an application for these dairy investments until 8 August onwards.

There are some reference costs listed in the format of an equation with Y and X figures. Spreadsheets and further explanation on these costings can be found at https://www.gov.ie/en/publication/9e8f1-tams-ii-support-documents/. Minus figures also relate to common or existing items that may need to be deducted.