Government Reneges on Programme for Government Commitment on Carbon Tax

IFA President Tim Cullinan said the Government has reneged on its commitment to allocate a portion of the €1.5bn Carbon Tax money to agriculture in today’s Budget.

“It’s extraordinary that the Government has told us that €49m in funding “that the Department of Agriculture, Food and the Marine would otherwise expect to receive in 2022 from carbon tax receipts” has been allocated to the Department of Social Protection.

“It’s stated in the Programme for Government that this funding would be used for environmental and climate measures for farming. This has not happened and it will further rock farmer confidence in the Programme for Government commitment on the allocation of the carbon tax, which is also costing farmers a lot of money,” he said.

Tim Cullinan said the rollover funding for farm schemes and the extension of tax reliefs are important for farmers as is the new low-cost finance initiative. 

“Overall, the Budget is an underwhelming one for farmers,” he said.

The Chair of IFA’s Farm Business Committee Rose Mary McDonagh said, “It’s important to see stamp duty and stock relief measures extended. These will encourage farm transfer and generational renewal”.

However, she said that the reduction in the farmer flat rate VAT refund from 5.6% to 5.5% was a sting in the tail that and would cost farmers €7m a year.

IFA Rural Development Vice Chairman Denis Tuohy said, “It’s positive to see an allocation for the rollover of farm schemes, including GLAS, ANC, TAMS, suckler cow (BDGP & BEEP-S), sheep welfare, and organics”.

“While the renewal of these schemes is important for 2022, the schemes and the level of co-financing will need to be significantly enhanced in the CAP National Strategic Plans for 2023-2027. This must be separate from, and in addition to, Govt funding of €1.5bn from carbon tax receipts for environmental measures,” Denis Tuohy said. 

Concluding, IFA President Tim Cullinan says that there were other aspects of the Budget that needed further examination.

“The new Zoned Land Tax must exclude farmed land and the support for Multi-Species Swards needed to be fleshed out,” he said.