The Association of Farm and Forestry Contractors in Ireland (FCI) has written to Teagasc seeking clarification on whether contractor debt has been included in the on-farm debt figure as presented in the National Farm Survey 2019.

The survey shows that 62% of farms have no debt, down 2% on 2018 figures, but he FCI is concerned that these figures do not account for increasing levels of contractor debt.

National chair of the FCI Richard White claims that the farm contractor is “seen as hidden debt as it is not part of regular banking debt, while sizable in our sector. During this period of dairy expansion we are concerned that this debt is not being taken into account in Teagasc research.”

Tams

The FCI has also welcomed the highlighting of increased levels of debt as a result of additional depreciation costs in the report. The association feels the increased level of machinery investment has been fuelled by the Targeted Agricultural Modernisation Scheme (TAMS) and the Young Farmer Capital Investment Schemes.

Hidden debt

White feels “much of the investment from TAMS and the Young Farmer Capital Investment Scheme is in farm machinery which is competing with non-grant supported contractor machinery”. The National Farm Survey 2019 shows that 6% of farms participated in these schemes, receiving an average payment of €12,839.

Teagasc research has shown that machinery depreciation costs as a percentage of overhead costs on Irish farms have increased by 13.5% year on year. White claims “this is a factor rarely taken in account when comparing machinery ownership costs with value of contractor service costs”.

Letter to the Minister

FCI has written to the new Minister for Agriculture, Food and the Marine Brian Cowen requesting the role that farm and forestry contractors play in Ireland’s agriculture be taken into full consideration in the next programme for government and reform of the CAP.

FCI seek action on the following:

  • Creation of a National Register of Farm Contractors in Ireland.
  • Those eligible on the National Register also be eligible for a Carbon Tax Credit.
  • Charges for services are zero rated for VAT, or alternatively non-VAT registered farmers can claim the VAT back on work carried out by contractors.
  • Read more

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