Minister for Finance Michael Noonan stuck to his promise that farmers had nothing to fear from the 2014 review of agri taxation measures. The main focus is on trying to encourage more land into long term leases rather than conacre. The reason is simple - at present 14% of all land is farmed by 43,000 farmers who only have 11 month tenure. In contrast, just 3,600 long term leases qualify for generous tax incentives available for leases of at least five years duration.

There was no "stick" measures announced to reduce the attractiveness of conacre, but a range of "carrots" to make long term leases more appealing.

These include:

- a 50% increase in the amount of income exempted from long term leasing. This means that where the lease is from five to seven years, the first €18,000 is tax-free. For seven to 10 year lease agreements, €22,500 is tax-free, while €30,000 is tax-free for leases over 10 years.

- A new fourth threshold for leases of more than 15 years allows income of up to €40,000 per year to be earned tax free. This is presumably designed to facilitate dairy conversions in particular - no point building a parlour without a 15 year lease.

- The relief from taxation will now be allowed where the land is leased by a company (many larger dairy and tillage farms have now converted to company status).

The lower age limit to qualify for the leasing tax reliefs has been abolished - previously, those under 40 could not avail of such reliefs. Inter family long term leases are still excluded from the incentives - presumably because Revenue fear it would be widely used as a tax avoidance measure. However, lease income does still incur the Universal Social Charge (USC).

Capital Gains tax retirement relief and Capital Acquisition Tax (CGT) rules are also being changed to favour long term leases. For example, a city dweller who inherites a farm can avoid a hefty CGT bill by entering a long term lease with an active farmer.

None of the measures are expected to cost the Exchequer a large amount next year. That's to be expected - change happens slowly in agriculture. However, when land owners talk to their accountants and solicitors over the coming years, more and more will be encouraged to strongly consider long term leasing - something that has to be positive for productive agriculture.

Full details and analysis in this week's Irish Farmers Journal.