Mr. Pat McCormack:

The president of the ICMSA, Mr. John Comer, apologises for being unable to attend. As his deputy, I agreed to stand in at short notice. I am accompanied by our general secretary, Mr. John Enright. We appreciate the opportunity to address the committee as we face into a budget that is perhaps earlier in the year than any of its predecessors.

Our concerns are about the farm schemes and how the Department's spending on agriculture has been cut by 12% over the last number of years. In particular, on-farm schemes have been cut by up to 18%, with the remainder of the budget cut by 8%. With Ireland's Presidency of the European Council, we have had many issues over the last six to eight months with a new rural development programme coming into play in 2014 under the CAP reform. The EU has made €313 million of funding available and it is imperative that the Government match that to maximise what is brought into the Republic. The various different schemes such as the disadvantaged areas scheme, the agri-environmental scheme and incentives for on-farm investment have been important not alone to agriculture but to the other citizens of rural Ireland who have benefited as a result of the spur that was put in the rural economy in the past. To maximise that €313 million we urge that this would be a top priority.

We are entering a period of change with the abolition of quotas in 2015. We predominantly represent dairy farmers and the abolition of quotas will bring major changes and challenges. Regarding tax, it is very necessary. While we appreciate what was done in last year's budget to face up to land fragmentation, the main tenet of 1% stamp duty is very important as we move forward because there is an issue with the age profile of Irish farmers. We need to get that right for various reasons including health and safety and the ability of the young farmer to adapt to modern needs, increase output, etc.

Since 2008 we have seen a 65% reduction in capital gains tax and there is a need for indexation. The capital acquisitions tax and the agricultural relief must be maintained at its current level of 90% given that thresholds have fallen by 58%. To burden a young farmer taking over the family farm with a significant level of debt would be very negative. As we move to life post-quota it will be imperative that the tax relief incentives remain there for the five-year and seven-year leases and that they be expanded to include family members. A parent may be hesitant about giving the farm over completely to the younger generation, but these leases would incorporate the child to maximise output and give the young farmer a sense of responsibility and the opportunity before the total handing over of the asset.

Another issue is PRSI going from 4% to 4.5%. There would be greater benefits in situations of sickness but, as an association representing sole traders, we feel this should be voluntary for the self-employed sector. Mr. Enright might add to this. Younger farmers are needed to maximise Ireland's output. We are an exporting nation and a significant 85% of our produce is exported. That percentage will grow as we approach 2020 and the food harvest ambitions that are set for us, and that can only benefit our national economy. The Government must take every step possible to maximise the moneys coming into the country via the various different schemes and to afford the Irish farmer the opportunity to maximise the outputs for the nation.