27 Jun 2016
BREXIT UNCERTAINTY ACCELERATES NEED FOR STRONG GOVERNMENT SUPPORT FOR FARM INCOMES IN BUDGET 2017Economics
IFA President Joe Healy has said that the market uncertainty arising from the UK vote to leave the EU must be met by a strong commitment from Government to support farm incomes in Budget 2017.
Speaking in advance of the National Economic Dialogue at Dublin Castle this morning, he said, “2016 is already an extremely difficult year for farm incomes. With low product prices across many sectors, the fall in the value of sterling against the euro is a further blow for exporting sectors. For Irish agriculture and the agri-food sector, with 40% of our agri-food exports going to the UK, and a shared land border, the implications of the decisions to leave will be significant. It is critical that steps are taken by Governments and institutions within Ireland, the UK and the EU to provide the reassurances that will minimise uncertainty and stabilise exchange rates”.
“Budget 2017 provides an opportunity for the Government to directly lessen the farm income pressure. There must be an increase in funding in this year’s Budget for important farm schemes. These are vital in supporting farm incomes and economic output on lower income cattle and sheep farms in particular, and support important capital investment across all farming sectors. They also provide a major stimulus to the rural economy.”
On taxation, Mr Healy noted that Budget 2017 also provides an opportunity to implement taxation measures that will underpin the longer-term growth of the sector, through tackling volatility and supporting farm restructuring and investment.
He also identified the costs of credit and lack of real competition within the banking sector as undermining the competitiveness of farm enterprises He said, “Government must prioritise new sources of finance to increase competition and drive down borrowing costs”.
Concluding, Mr Healy said, “A viable farming and agri-food sector is critical to the strength of the overall economy. It contributes to employment across the country, and underpins our agri-food exports, which have grown in value by over 60% since 2009. The risks from the BREXIT outcome to this sector are great, and Government must focus its actions over the coming months on ensuring that these risks are minimised”.