Contractors seek VAT rate reduction in Budget 2019
The FCI is seeking a reduction in the VAT rate for contractors in budget 2019, similar to the one received by the hospiliality sector in 2011.

Agricultural contractors are seeking a VAT rate reduction from 13.5% to 9% for all activities provided by contractors for a period of two years in Budget 2019.

The calls come from the Association of Farm and Forestry Contractors (FCI) who said the services provided by contractors are as important to the agriculture sector as the hospitality sector is to the tourism sector.

The hospitality sector received a similar reduction in VAT rate in 2011 to provide a kick-start following the economic crash and the FCI believes agricultural contractors now need something similar.

FCI chair Richard White said the reduction in VAT would provide a huge cashflow benefit to farms and mean a cost saving close to €20m for Irish farming. He said it would help farmers work through the major forage difficulties at present.

Black economy

The FCI also said the reduction in VAT would significantly reduce the level of “black economy” activity in the sector. It estimates the level of such activity in the agricultural/farm and forestry contractor sector is running at close to 30% of all turnover.

The annual spend on contracting services per farm is estimated to be in the region of €5,000, which equates to a sector turnover of €650m. If 30% of this activity is part of the "black economy" it means there is €195m in sector turnover for which no VAT is returned.

By FCI calculations, reducing the VAT rate to 9% and removing “black economy” activity would result in a drop of just €3m in VAT revenue compared to the present situation.

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The farmer's daily wrap: inspections, milk price and silage 2019
Here is your news round-up of the five top farming stories and weather outlook for 16 February 2019.

Weather forecast

Met Éireann has said that there will be some mist or drizzle at times on Saturday morning, but most places will be dry during the day.

More general rain is forecast to develop along the west coast by evening.

It will be mild and breezy, with highs of 10°C to 12°C in southerly winds.

In the news

  • In pictures: silage 2019 kicks off in February in Kilkenny.
  • The board of Aurivo met on Friday and increased its January milk price.
  • Farmers are being driven out of business by over-zealous and unaccountable inspectors, Sinn Féin MEP Liadh Ní Riada has said.
  • Applications for the BEEP scheme, which has a funding provision of €20m, will be accepted up to and including next Friday 22 February.
  • Some 66 projects from across the country will be allocated funding of €62m under the €1bn rural regeneration and development fund.
  • Coming up this Saturday

  • Good week/bad week.
  • Nathan Tuffy reports from Balla Mart.
    Farmers driven out of business by over-zealous inspectors – Ní Riada
    The next CAP must include substantial reform of the current inspection system which is unfair and needlessly aggressive, according to MEP Liadh Ní Riada.

    Farmers are being driven out of business by over-zealous and unaccountable inspectors, Sinn Féin MEP Liadh Ní Riada has said.

    On Friday, the Ireland South MEP said the new Common Agricultural Policy (CAP) must include substantial reform of the current inspection system, which she says is unfair and needlessly aggressive.

    Regulation

    “I meet farmers all over the country and no matter where I go one of the first things they want to talk about are inspections.

    “There seems to be no regulation or protocol for these inspections, at least none that is being adhered to.

    People who have found themselves singled out for intensive investigation because they dared to appeal a decision

    “I've talked to people who have been given 10 minutes notice before an inspection, been penalised for things they weren't there to inspect and people who have found themselves singled out for intensive investigation because they dared to appeal a decision,” she said.

    Ní Riada said that there seems to be zero accountability of inspectors either.

    Living in dread

    “Farmers live in dread wondering what kind of mood the inspector will be in when they arrive.

    "Furthermore, when they do find an issue, rather than giving them a time frame to correct it, they are penalised on the spot with a cut in their Single Farm Payment (SFP) [Basic Payment Scheme (BPS)].

    “Given the SFP [BPS] is the only thing just about keeping their heads above water, it is simply unacceptable that such a drastic penalty can be imposed with the flick of a wrist, with no accountability, based on one person's mood.

    “These are not just the complaints of a few people angry they have been penalised.

    "In 2015, over 10,000 farmers had to appeal penalties, often for minor easily-corrected breaches,” she said.

    Criteria

    The Sinn Féin MEP said that criteria needs to be urgently put in place at EU and national level to relieve farmers from this often unnecessary stress.

    “Sinn Féín has proposed that we use a yellow card system to ensure that farmers who commit first-time minor offices do not lose payments.

    The assessment must take into account any external contributing factors beyond the farmer's control

    “If a farmer is to be penalised, the assessment must take into account any external contributing factors beyond the farmer's control and the economic situation of the farmer.

    “Inspections should be limited to a maximum of 1% of farmers and, more importantly, farmers should be chosen based on the severity of the risk they pose due to their type or volume of produce.

    Inspections are important

    “Inspections are important to ensure we maintain our high standard of quality and the great reputation Irish produce has around the world.

    "However, over-zealous unaccountable inspectors engaging in what amounts to little more than ambushes do not do that.

    “The Department of Agriculture, and in particular Minister Creed, should be ashamed of themselves for fomenting the sense of tension and worry that currently hangs over our primary producers,” she said.

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    Majority of Irish MEPs fail to back free trade deal with Singapore
    Irish exports to Singapore are valued at €863m and it is a buyer of whey and milk powder.

    Just three out of Ireland's 11 Member of European Parliament (MEPs) voted in favour of a proposed free trade agreement between the EU and Singapore this week.

    Mairead McGuinness, Sean Kelly and Deirdre Clune voted for the recently finalised deal on Wednesday this week.

    Matt Carthy and Luke Ming Flanagan voted against the deal. Marian Harkin and Nessa Childers abstained, while there were no recorded votes for the others.

    Passed

    Overall, the vote was passed by the European Parliament, with 425 votes in favour, 186 votes against and 41 abstentions.

    Ireland currently exports milk powder and whey to Singapore, among other things.

    Figures from the European Commission show that Irish exports to Singapore are valued at €683m, while imports are valued at €467m.

    Bilateral deals

    The trade and investment agreements with Singapore are the EU's first completed bilateral deals with a member of the Association of Southeast Asian Nations (ASEAN).

    Within ASEAN, Singapore is by far the EU's largest partner, with a total bilateral trade in goods of €53.3bn (2017) and in services of €44.4bn (2016).

    Middle income class and average incomes have risen by 66.4% in the past 10 years

    Singapore is both a city and a country.

    While Ireland is 101 times bigger than Singapore, the population of Singapore is 1.2 times larger than Ireland and so relies quite heavily on imported foods.

    Middle income class and average incomes have risen by 66.4% in the past 10 years.

    Singapore is within the top 15 in the world for value of imports, importing a value shy of €6.8bn for food and live animals in 2017.

    The free trade agreement aims to:

  • Remove nearly all customs duties and get rid of overlapping bureaucracy.
  • Improve trade for goods like electronics, food products and pharmaceuticals.
  • Stimulate green growth, remove trade obstacles for green tech and create opportunities for environmental services.
  • Encourage EU companies to invest more in Singapore and Singaporean companies to invest more in the EU.
  • Important agreement

    “This is an important agreement that will boost our trade with the most important of the ASEAN economies and is a stepping stone towards a wider trading agreement with the entire region,” Fine Gael’s European Parliament spokesman on international trade Sean Kelly MEP said.

    “This agreement makes it easier for EU firms of all sizes to export to Singapore.

    "It eliminates customs duties, facilitates regional and global value changes, and removes technical and non-tariff barriers to trade.”

    Kelly concluded by calling on the European Council to follow parliament's lead and approve the agreement as soon as possible.

    Read more

    Northwest Ireland to southeast Asia