The upcoming budget is sure to be a hot topic at the National Ploughing Championships next week, at least in the tents populated by political parties and Government agencies.
It’s a year like no other, and it’s going to be a budget like no other.
The focus of Budget 2023, to be unveiled in two weeks’ time, may be on expenditure and taxation for the year in front of us. The reality is that the budget is being utterly framed by the events of the last six months since Putin invaded Ukraine.
The Government is in the extraordinary position of simultaneously facing a generational challenge; the biggest since the 2008-2012 years, but with a large wad of cash in hand.
The budget surplus for the year is currently running at €6.3bn, so money is available for the Government to do things. For context, this is compared to a budget deficit of €6.7bn this time last year. That’s a €13bn improvement in the nation’s finances in only 12 months.
And farmers may be hopeful that at least some of this money will be put towards addressing the deep needs within agriculture.
Escalating costs have threatened the viability of every pig producer, every poultry unit and every fruit and vegetable farm. While the majority of farmers who produce sheep, cattle, grain and milk have seen prices rise to cover costs so far, there is much to be concerned about going into the winter.
This week, we hear that beef producers will need €6/kg to cover costs. That’s a high bar to set to break even, and with more than four in five farmers involved in cattle production, it’s the bar that matters most.
The issues for the food sector are not restricted to primary producers.
On page 24, Paul Kelly of Food Drink Ireland recounts the difficulties processors are facing, with up to 600% increases in energy costs biting deep. That isn’t just affecting Dairygold and ABP, it’s the challenge that small artisan, startup companies and niche product processors must face.
Minister for Agriculture Charlie McConalogue will be pushing around the cabinet table for support for farmers, and has one advantage. He can propose particular schemes with a direct and measurable impact, like this year’s Tillage Incentive and Fodder Incentive Schemes. It’s an easier sell than generic schemes for the entire economy.
Working capital availability is a particular issue for all small business. Previous low-interest loan schemes for farmers were oversubscribed, another such scheme would be most welcome. It’s crunch time for Government to deliver for farming in this budget.