THERE was disagreement between the Minister for Agriculture and the food industry last night over the impact of the Budget on food exports into the sterling area.
Mr Ciaran Fizgerald, director of the Food, Drink and Tobacco Federation, said the Budget had ignored competitiveness, particularly in the food industry.
The food industry's request for a targeted reduction in employers' PRSI to compete with the lower levels in Britain has largely been ignored, he claimed. "The balance of adjustments in the employers PRSI would result in a £2 million reduction in the overall PRSI. levels in the food industry from approximately £90 million to £88 million," said Mr Fitzgerald.
He said this minimal reduction in imposed costs compared unfavourably with the approximate £120 million loss in exports resulting from the fall in the value of sterling of 6.5 per cent in 1995.
Last night Mr Yates said the increase in income threshold for, the lower rate of employer's PRSI would benefit food companies to the tune of £3 million and they would be assisted by reductions in the rate of corporation tax.
ICOS, the body for the co-operative movement which represents most large co-operatives, described the reduction of employers' PRSI from 12.2 per cent to 12.0 per cent as "insufficient".
"The well-signalled increase in the exemption limit to £80 per week is more likely to be of benefit when coupled with the recruitment policy," said the director-general of ICOS, Mr John Tyrell.
The farm organisations criticised Government policy of not using the current buoyancy to, reduce the national debt and to, support industries exposed to currency problems because of the weakness of sterling.
Their strongest criticisms related to impact of the Budget on the farm. These varied from "insignificant" to "insufficient" to a dismissive "non-event" from Macra na Feirme.
The Irish Farmers Association and the Irish Creamery Milk Suppliers Association said Mr Quinn missed an opportunity to create conditions where farmers could invest in their farms to meet new challenges. The IFA president, Mr John Donnelly, said the Government missed its opportunity to create employment in rural areas by allowing farmers to invest in their farms.
The president of the ICMSA Mr Frank Allen, called the Budget "a non-event" and a package of many little benefits which were insignificant in terms of preparing a vibrant agricultural industry for competition in the EU and world markets. "The best that can be said is that the Budget did not inflict greater damage but it definitely did not do justice to farmers," he said.
However, there were some significant gains for the farming community, including an increase in the level of VAT refund on farmers' sales from 2.5 per cent to 2.8 per cent. Mr Yates said this would benefit the majority of farmers who were not registered for VAT but who were required to pay VAT on farm inputs. He estimated the benefits at £9 million in a full year.
There were also increases in the tax exemption for income from land-leasing to £4,000 per annum for five or six-year lease and £6,000 for a seven-year lease or over. The farm organisations welcomed the increase to 75 per cent in the standard business relief for Capital Acquisitions Tax.