Minister Michael Creed and the Department of Agriculture must be congratulated for emphasising the importance of the agriculture industry and the farming sector in Budget 2017. Last week, we spelled out clearly some of the very real issues affecting farm families and it is fair to say the minister has delivered on a number of fronts and pointed the ship in the right direction in various ways.

Short-term income challenges on farms are helped by the innovative 2.95% interest rate loans exclusive to the agriculture sector and open to all farmers. It is clear the minister really rolled up his sleeves to deliver this measure.

Even if nobody takes up a loan through this scheme, it will still allow farmers bargain and stress-test existing rates with our pillar banks. Unlike some existing low-interest-rate schemes, it is open to all sectors and no security is required.

The basic requirement is that you need repayment capacity, but this should be necessary whatever the loan, and borrowing for non-productive investments should be discouraged, irrespective of sectors. For farmers repaying loans with interest rates of 8% to 9%, this rate of less than 3% is a highly significant change.

Income averaging

The ability to step back from income averaging must be welcomed and the fact the it is available immediately is a big plus for the 30% of farmers who avail of it. There is an argument that two or even three years would be more beneficial and more long term in nature than a single year in five.

Grain farmers have suffered low income for four years now, while dairy farmers are in a second year of low incomes. Credit is due to economist Rowena Dwyer and her colleagues in the IFA farm business committee who flagged low-interest-rate options and changes to income averaging a long time ago.

We understand the other real sustainable solution to managing income volatility – such as the Australian tax scheme – is hitting a brick wall on state aid guidelines. Such a scheme would work on a rolling basis rather than attempting to pick out one year in five. Should we give up on such a scheme when our competitors use it so effectively?

Suffice to say, there is an inherent wake-up call for farmers to push accountants to use real figures when income shifts of up to 50% are possible and make real assessments on potential incomes rather than simply using what happened from one year to the next.

Schemes

The two big-ticket items highlighted in last week’s editorial were GLAS and ANC payments. The GLAS box has been ticked and for those farmers considering entering the scheme, now is the time as it looks like funding is available for 50,000 farmers to enter. The 1,500 farmers not accepted into GLAS II should be allowed enter GLAS III.

On the ANC payments, our understanding is that they are under review at EU level, so this is still in play.

Elsewhere, we take it that the increases in the Farm Assist and the changes to capital acquisition tax are bringing a sense of reality to the value of farms.

Brexit

Before Tuesday, we were sold the line that this was to be a Brexit-proofing budget. Farming is among the sectors facing the biggest challenges with Brexit but the real solution is to establish new markets in developing countries outside the EU and UK.

However, we also need to focus on marketing Irish products in the UK. We know the cost of this type of business. Putting extra feet on the ground is expensive but the rewards are substantial. The additional allocation of €2m to Bord Bia and Enterprise Ireland would seem small in the overall scale of the work required.

This is an €11bn food and agri sector and a paltry additional €2m and the setting up of a Brexit group is merely the start to a Brexit-proofing solution. If the Government is confident existing spend in Bord Bia is delivering for farmers, then more must be expected with the Brexit headwinds gathering pace.

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Full coverage: Budget 2017