Eamon Corley, Beef Plan chairman, shares his views on Budget 2022.
While we are grateful for some of the measures taken in the budget, by and large, we would consider it a very disappointing budget.
The measures the government has taken demonstrate a lack of knowledge of farming and an appreciation for farmers.
It demonstrates a huge lack of innovation on behalf of the government.
Also, it is very disheartening for farmers to learn that the government has demonstrated very little capacity to take farmers views and ideas on board.
With a national debt north of €200 billion and pressure on the government to implement changes to combat climate change, as well as an escalating energy crisis, we accept there is a lot of pressure to get it right.
Considering this, we surely would have expected that some serious thought would have gone into it. We might have expected some new thinking.
Some innovative thinking would facilitate all sectors to push on while at the same time addressing the climate change issues.
Not so, however, no innovative ideas. It gives the appearance of a budget put together after a glance at an outgoings and incomings spreadsheet, slapping on taxes with no thought going into incentives to bring in extra revenue.
The impact of this is it pours cold water on the different employment sectors, including agriculture. This gives no incentive to create extra revenue while at the same time doing nothing to address the problems the country faces.
The carrying over of funding for farm schemes, while welcoming to the farmers who receive it, is of no benefit to the tens of thousands of farmers who find themselves excluded from these schemes.
Without independent validation of the benefits of these schemes, many farmers have doubted the gross benefits. Others, because of scheme complexities, have found themselves excluded by the department.
With farmer department relations at an all-time low, it is hard to see widespread buy-in from the many farmers facing demands for the return of funds and threats of court action.
Flat rate VAT
The flat rate VAT for farmers has moved from 5.6 % to 5.5%. The flat rate refund compensates farmers for the VAT they pay on inputs.
Most farmers are flat-rate farmers. It leaves a bad taste in the mouth of farmers when there is a reduction in the VAT they receive and no reduction in the VAT they pay.
It appears that the government has effectively helped themselves to farmers’ money. This measure’s total take from farmers is expected to be in the region of €7 million.
Beef Plan on Budget 2022: Carbon tax
Despite fuel costs escalating by 50% in the last year, the government has ploughed on and added more carbon tax.
It demonstrates, once again, how tone-deaf the department is as regards the escalating cost of farm inputs.
Beef Plan is not in favour of a land tax and would see Capital Gains Tax reliefs offset against sustainable projects as a policy more likely to reach the required targets.
Zoned Land Tax
Regarding the proposed Zoned Land Tax, it will be very important that land owned and farmed by active farmers is excluded from this tax.
It will also be important that the tax should only apply to zoned residential land that has the full range of services provided.
It would be very unfair if landowners were getting taxed if planning departments were dragging their heels about facilitating the provision of services or the granting of planning permission.
Probably the most disappointing aspect of the budget is the side-lining of farmers regarding the solution to climate change. If climate change measures do not make sense, then farmers will not do them.
One example that does not make sense is stopping peat harvesting in Ireland and then importing hundreds of lorries loads of peat from eastern Europe for our horticultural sector.
One of the items in our budget submission was incentives for the building of digesters.
Digesters would seem to be a particularly good fit that would allow farmers to be part of the solution.
- Produce compost for the horticulture sector;
- Fertiliser for the agricultural sector;
- Renewable gas to replace imported fossil fuels;
- Renewable electricity for the national grid.
It is very disappointing that the government is doing so little if anything on this.
Another one of our suggestions was incentives to promote farm-to-fork initiatives. This would also help counteract climate change by resulting in more food been consumed locally. Again, there doesn’t seem to be any government’s response on this.
Beef Plan on Budget 2022: Quangos
It seems the government favours the development of quangos that only serve to squeeze the life out of our employment sectors, such as agriculture, rather than providing them with initiatives to incentivise them to assist in solving major problems facing the country.
Farmers are nervous about two new potential quangos that have emerged and have questions that remain to be answered.
Will the new land development agency formed recently, coupled with the zoned land tax introduced in this budget, do what they have been set up to do. Or, will they facilitate corruption that will see the proceeds of farmer assets unjustly diverted away from farmers?
Will the office of the Food Ombudsman sort out the injustices in the food industry? Will it be a talking shop that will facilitate the dominance of the retailers and factories over the primary producer?
If the office of the Food Ombudsman performs to the same level as its predecessor, the Beef Market Taskforce, then farmers are rightly concerned.
Find out how Budget 2022 will impact you.