The agriculture sector has been allocated €2.1bn in this week’s bonaza budget announced by Government. Minister for Agriculture Charlie McConalogue has defended the budget and the allocations that he has set out for farmers for 2023, stating it is a budget for farmers and farm families.

“Our budget has been increasing every year and is increasing again this year, we’re continuing and strengthening all of the schemes that are in place,” he told the Irish Farmers Journal this week.

The minister is correct when he says that the total budget for agriculture has increased over the last number of years, however it has been topped up by once-off programmes such as COVID-19 funding, the Brexit Adjustment Reserve and money to deal with the impact of the Russian war in Ukraine.

Once these programmes end, and if they are not replaced, the total budget for the sector will fall.

“Bottom line, it’s about how we support farmers. From year to year the profiling of that can be different, but the key objective is that the support is there for farmers.

“It can be very confusing if you’re looking at what’s COVID, what’s Brexit, etc, but the bottom line is to focus on what we’re doing for farmers.”

ACRES

Over 20,000 farmers will be locked out of an agri-environment scheme next year, with the Department’s target for the new flagship Agri Climate Rural Environment Scheme (ACRES) coming in at 30,000 farmers.

The minister admitted there are “capacity issues” in terms of how many farmers will be able to access ACRES next year, vowing that the scheme will “ramp up” from 2024.

“I know there is concern about potential gap years, that’s something I’m reflecting on and engaging within the Department on in relation to how we might be able to manage that,” he said, adding that the Department feels that 30,000 is “doable” for next year.

Front-loaded fodder payments

The minister has confirmed his Department will be front-loading next year’s rolled over Fodder Support Scheme payments to farmers at the end of this year. In effect, €30m will hit farmer accounts later this year, alongside their payment under the scheme for 2022.

“The reason for that is to help farmers plan for next year, particularly around the fertiliser challenge.”

When asked if the scheme will roll over with the same budget of €56m, the minister said he will “monitor the situation next year in relation to what’s happening in the marketplace but at this stage we’re making a forward payment on the basis that farmers will be doing the same as what they did last year”.

Brexit Adjustment Reserve (BAR)

Some €238m was announced for the agri-food sector in Budget 2023.

Of this figure, farmers will receive just €28m for the new beef scheme, with a “significant majority” of BAR funding going to fisheries.

Asked if it was a fair allocation given the exposure of the agriculture sector to Brexit the minister said “where we can identify further opportunities, we will” .

The €28m replacement scheme for the Beef Environmental Efficiency Payment – Sucklers (BEEP-S) will be “similar” to the outgoing BEEP-S.

“The existing BEEP-S has worked really well for farms and it has been quite popular as well, so we’ll be keeping it as close as we can to that. The new beef suckler scheme [in CAP] will pay €150 on the first 10 cows, the BEEP-S will be paying €90 on the first 10. So you’ll be talking about €240 on the first 10 and €190 on the ?remainder.”

While the funding will be welcome by smaller suckler farmers in particular, its capacity to mitigate the likely medium to long term Brexit impact on the sector is questionable.

New ceiling limits have been announced under TAMS in the budget, with 60% grant aid and a €90,000 ceiling for farmers to install solar panels on dwellings as well as farm buildings.

However, the minister confirmed that farmers will remain locked out of selling excess electricity back to the grid should they use TAMS to install solar panels, as a result of EU requirements.

Energy support scheme

Despite fears last week that farmers would not be eligible for the new energy support scheme, the minister has said any farmer’s energy bill which is up 50% will be eligible for support.

“Revenue will be putting in place a mechanism which they are designing in relation to farm families. If your unit price is 50% over what it was last year, then you’ll get a credit which will amount to 40% of the difference between last year’s price and this year’s price.”

A total of €12m over the next four years, funded from the carbon tax, has been allocated by the Department of Agriculture for the development of anaerobic digestion pilot schemes.

“Key to stepping this forward will be the renewable heat obligation which the Department of Energy is working on.

“We’re making a contribution in relation to pilot capital funding but the key enabler will be the renewable heat obligation (RHO).”

He said fixed price guarantees, as is the case in other EU countries, are “part of the mix” in relation to the design of the RHO.

“It’s going to have to give certainty and confidence on investment,” he said.

McConalogue on

Tillage farmers with no grassland

“The Straw Incorporation Scheme delivers up to €10,000 for a tillage farm of 100ac in size, that’s a really strong support. Next year will be the doubling of the coupling [Protein Aid Scheme] in pillar one for the tillage sector.”

Concrete levy

“It’s a reflection of the reality. It’s something that’s affecting people across the country, whether it’s pyrite or mica and also defective buildings. There is no getting away from the fact that the 10% levy is going to increase costs on all types of development. It’s estimated for new houses that it will cost between 0.5% and 1% and for more concrete heavy projects [in agricultural] it will have an impact.”

Flat rate VAT change

“That’s a calculation that’s done at European level in relation to inputs and expenses. It’s based on what’s coming in and what’s going out, it can go up or down. It’s not something we have control over.”

Forgotten farmers

“I’m continuing to engage with the Department of Public Expenditure. I’ve made a commitment to deliver an outcome for forgotten farmers and that’s something I’m continuing to engage around.”

Young farmers

“We should never underestimate the tax accommodations to ensure that we can provide for intergenerational transfer. In relation to a land mobility scheme, that is something I’m very committed to and will be engaging further with Macra in relation to support for them.”

Sheep farmers

“We have the new sheep welfare scheme, which will be paid at €12 per sheep next year and we have the fodder scheme, which will be really important for sheep farmers.”

New €8m liming grant

“That will be a payment per tonne. We’re designing the final detail but I’m expecting it to be direct to farmers.”