Mr. Alan Jagoe:

Thank you, Chairman. I thank members for the opportunity to address the committee on the upcoming budget on the main issues of importance to young farmers. To begin I will say a little about Macra na Feirme. We are an organisation for 17-year olds to 35-year olds representing both young farmers and young people in rural areas. Agriculture is our main focus. We have up to 8,000 members. Since May 2011 approximately 50 new clubs have been set up around the country which gives an indication of how important young people in rural areas consider agriculture and wish to be involved in an organisation such as Macra na Feirme, which provides them with opportunities, respects their views and opinions and lobbies on their behalf. As president it is my job to represent their views and opinions and to lobby for them.

I am a dairy, beef and tillage farmer. I farm in partnership with my father in the south of Cork. It is a very challenging time for young farmers but among the challenges there are huge opportunities which we will outline in detail. I am aware that the committee has met several of the other farm organisations. Overall, we are supportive of their main policies for the future agriculture budget. Today we will focus on the young farmer element within the budget. The greatest challenge for the industry continues to be structural change. Budget 2013 must facilitate the readjustment in primary agriculture and as a result both drive competitiveness and increase exports. The main structural barriers are the age profile of farmers and land mobility. According to the Department, in 2010 only 5% of Irish farmers were under 35, approximately 6,200. To put it another way, there are as many farmers under 35 as there are over 80. It is a damning statistic of which no one in the industry can be proud.

By contrast, the demand for education is at an all-time high. Greater numbers of young farmers seek to start up farming in their own right and they are looking for other options in the coming years. To facilitate that we must maintain the few tax reliefs that are currently in place to curtail the reduction in young farmers and to encourage the transfer of land to the next generation. Land mobility is an area of great concern to young farmers. Traditionally, the unique family farm model we have in this country has facilitated land fragmentation. There are approximately 3.5 parcels of land per farm in this country. A specific recommendation in the Food Harvest 2020 document outlines that the Department should consider policy options to address increasing land fragmentation. Those would include support mechanisms to aid consolidation such as the introduction of a targeted roll-over relief for land sales.

We recently undertook a study with the IFA, the Agricultural Trust and the Department on succession and land mobility. Some of the initial findings were that 48% of those surveyed have no identified farm successor. The report is nearing completion and will be circulated to the committee upon publication. The document will help Macra na Feirme and other stakeholders such as the committee to shape new policy and incentives to encourage greater land mobility. Collaborative arrangements such as farm partnerships or shared farming must be further developed and expanded.

From a young farmer’s perspective budget 2013 must facilitate taxation, investment, land mobility, education and competitiveness. Under the taxation heading we are looking at two reliefs, namely, the young farmer stamp duty relief and agricultural relief. The stamp duty relief is vital to encourage the early transfer of land to a young trained farmer. To complement that, we seek the continuation of agricultural relief at its current level of 90%. On the basis of a 20% reduction from 90% to 70%, a 100 acre farm worth approximately €10,000 an acre is worth €1 million. The 90% rate will allow a farmer to reduce the tax liability on the farm to €100,000, which would bring it under the tax net. If that was to change to 70% the tax liability would be €300,000, which means that a 20% reduction would have a tripling effect on the other end, which would bring such a farm into the tax net and it could be liable for a tax bill of in excess of €15,000. For a 150 acre farm the tax bill for a young farmer taking over could be up to €60,000. That is a sum of money no young farmer could face paying at a time when there are no incentive schemes or installation aid for them. I will hand over to Mr. Joyce who will speak on investment and land mobility.