24 Feb 2016
NEW GOVERNMENT MUST TAKE LEAF OUT OF FRENCH RESPONSE TO DAIRY DOWNTURNDairy
Two days ahead of polling day, IFA National Dairy Committee Chairman Sean O’Leary today (Wednesday) put down a challenge to those who will form the incoming government in the coming weeks to be just as bold as the French government in supporting farmers.
Mr O’Leary said that in response to the income crisis in dairy and pig farming, the French Government has reduced the social charges paid by French farmers by 10%, a significant move valued by the Prime Minister Manuel Valls at €500m nationally.
Mr O’Leary called on the incoming government to come to the table of an urgently reconvened Dairy Forum with tax-based solutions to volatile farming incomes such as those proposed by IFA, and to take determined action to drive competition harder in the banking sector, including through the European Investment Bank.
“The French and Irish systems for social contributions – our PRSI – are very different. The French system of ‘social charges’ provides old age pension, health and life/disability insurance for farmer and spouse, and a number of other family benefits. The French Government’s move to reduce contributions by 10% offers some relief, to the tune of around €1,200 for the average dairy farmer, based on 2014 incomes,” he said.
“I am struck by the fact that the French Government did not invoke EU State Aids as an obstacle to the decision made this time, nor for previous interventions, and I want our new government to be bolder than its predecessor in pushing harder for taxation solutions to volatile farming incomes,” Mr O’Leary said.
“In addition to taxation allowing farmers to individually smooth out their taxable income over a period of five years, the incoming government must also be much more proactive in securing low-cost flexible funding through the European Investment Bank in particular, but also by vetting alternative finance providers, driving competition harder in the Irish banking sector and lowering the cost of finance for farmers,” he concluded.