Ending of milk quotas provided the impetus for new agri-taxation measures

The 12 new agri-taxation measures announced in yesterday’s budget have one thing in common – they are all designed to get land moving out of the hands of inactive farmers into active ones and to help young farmers to get established.

Farmers are hurtling towards a brave new world next spring when milk quotas are abolished and they are free to produce as much milk as they wish.

The problem with this scenario is that many farmers find it hard to get their hands on land. Conacre, or 11-month lettings, is still the method of leasing land preferred by landowners.

These short-term lettings are more expensive than long-term leases and hamper farmers in planning ahead as they don’t know if they will still have the land in two or three years’ time.

Conacre lettings also make it more difficult to access bank credit as loan terms are often matched to the length of the lease.

Game changer

Nearly 54,000 farmers lease land, making it an issue that affects more than one in three of them.

Minister for Agriculture Simon Coveney said he believed the 25 taxation measures announced yesterday could be a game changer in the way farmers lease land in the future.

The tax-relief measures are all focused on encouraging longer leases and on making it easier to hand over land to the next generation.

Succession is a thorny issue for farm families. More than half of all farmers are over 55, and an estimated 50 per cent do not have an identified successor.

Not surprisingly, the young farmers' group Macra na Feirme was the first organisation to welcome the changes. Its president, Kieran O'Dowd, said these measures would make a big difference to his members.

But Irish Creamery Milk Suppliers' Association president John Comer said an opportunity was missed in the specific area of inter-family leases, and the Minister must revisit this issue.

Collaborative farming

Irish Cattle and Sheep Farmers’ Association president

Patrick Kent

also said the agri-taxation review had not gone far enough to support collaborative farming arrangements.

“More needs to be done to incentivise farm partnerships. The taxation incentives outlined here are geared towards leaving farming and leasing out to unconnected third parties,” he said.

This agri-taxation review was announced in last year’s budget. Yesterday, the Minister said he was turning his attention to a review of taxation measures for the marine sector. Meanwhile, a working group will monitor the effectiveness of these agri-taxation measures and will look at other issues, such as ways to remove the barriers facing women in agriculture.