It was very much welcomed by all that reference costs have received another lift in the soon-to-be launched TAMS III.

After significant pressure last year, reference costs were raised for the final few tranches of TAMS II by roughly 10% across farm building inputs.

TAMS III has seen a 15% increase in reference costs for animal housing, with concrete walls and floors for silage and slurry stores receiving a 5% increase.

But how do these new reference costs compare to actual costs? Steel and concrete costs rose exponentially over the past number of years due to supply issues and rapid inflation, causing raw steel prices to double over a period of three years.

Prices have thankfully stagnated, although they remain at a much higher level than pre-Covid-19.

To analyse the difference between actual costs and those released by the department, we have looked at some previously featured grant-spec developments all built in 2022.

Cow underpass: David Clarke, Co Westmeath

In July last year, David Clarke of Cows.ie, completed works on his cow underpass cutting underneath the R390 running between Loughnavalley and Killare.

A total of eight box culverts, each 2m in length, created a 16m-long underpass.

The costs of the build, including planning and road closure fees, own machinery and fencing, totalled €96,148 plus VAT, €6,009.25/linear metre.

The Department has listed cow underpasses with a reference cost of €5,000/linear metre, 20% below actual costings of the Clarke underpass.

Underpasses are set at a grant rate of 40%, with a reference cost of €80,000 for the above giving a total grant of €32,000.

If the actual costings were used, the upper limit of €90,000 would apply giving a total grant of €36,000, €4,000 higher than what would be received from the reference costs.

Slatted sheep shed: Mayo sheep farmer

A popular piece in last year’s buildings sections was the four-bay slatted sheep shed on a Co Mayo farm.

The shed had a 4.7m passage with slatted pens 5.9m deep. The tank underneath the slats was 1.8m in depth.

The farmer had completed all work to TAMS II specifications, with the total build coming in to €121,341 plus VAT.

This slatted sheep shed in Mayo would see farmers lose out on between €9,340 and €14,010 due to actual costs being €23,350 above the Department's reference costs.

TAMS III reference costs for the above-ground structure total €67,824 plus VAT with the underground slurry store given a reference cost of €32,167. This totals €99,991 plus VAT of a reference cost, when over 12 months ago the actual build cost was 21% higher than this with reduced materials costs.

Should a farm partnership be looking to avail of grant aid for a similar shed under TAMS III, they would be set to lose between €9,340 to €14,010 (depending on qualifying rate) in grant aid as the €23,350 that the build cost exceeds the reference cost and will not be grant aid-able.

The examples show the disparity with reference costs and actual costs, in the region of 20% of a difference between the two.

The issue farmers will likely face is this; do they put in the actual costings of the build when applying for the grant and hope that they will be successful or do they apply with costings at or below the reference point.

In previous scoring, having costings below the reference point allowed applications to score highly and likely be successful in their application, but if farmers do this they will be at a loss as no grant aid will be given on costs exceeding the costs you applied under.