Mr. Liam Moyles:

I convey the apologies of Mr. Jim Treacy. The four of us are volunteers. We have a single purpose which is to try to get young people into farming and improve the output and efficiency of farming. We pre-submitted the slides to the committee and I will begin by dealing with the last one.

Our summary point is that the association believes strongly that agriculture can lead economic recovery. Food Harvest 2020 has set the target for what we deem to be an historic new era. The training and education of young people going into farming, at whatever level, are key. In other words, human capacity will be vital to succeed in achieving the Food Harvest 2020 targets. A number of barriers must be removed, mainly to access land and encourage its use. This can be done through flexible arrangements and joint ventures. We need a proactive taxation policy approach and must support young trained farmers. In summary, we suggest that if we do a few things that we will outline, it is possible to create jobs in farming, stimulate rural development and communities and promote economic recovery.

The first slide points to the importance of agriculture in the economy. It is the primary indigenous sector, with 150,000 people employed in it, and an annual output of €24 billion, as stated in the Food Harvest 2020 document. Agriculture will continue to play a crucial role and Food Harvest 2020 sets out the growth plan for a new era in agriculture. Achieving the Food Harvest 2020 targets will require highly trained and specialised young farmers, greater land use through access and flexibility arrangements and support for young people who start farming. It will be dependent on the capacity of farmers, managers and labour working on farms to deliver to the standards required. The key issue is access to land and facilities as it is a barrier. The regulatory environment in farming must favour young, skilled and progressive farmers. Our taxation policy must be pro-farm development, pro-productivity, pro-efficiency and promote the use of land.

On the education front, the association strongly believes that we must attract and retain talented, skilled individuals. Education will also be important in trying to get the industry and farmers to adapt and change in order that we can gain a competitive advantage. Obviously, a range of skills will be required to manage multiple farm operations with large complex structures. Undoubtedly, to succeed and stay in farming, one needs a range of key attributes such as agility, flexibility and decisiveness. The human capacity is vital in education and training. We all learned in our younger days that management was about land, labour and capital, but they must be pulled together by the human capacity. This is a key issue that we must get across to the committee. If education and training do not take place and we do not have the required technical and managerial skills, the association believes we will not meet the 2020 targets. Many of us are under the illusion that 2020 is far off into the future, but it is only seven years away.

The association also believes we must urgently train and educate young farm entrants to meet the challenges of this new era. The old farm apprenticeship programme was about learning by doing. We are talking about hands-on practical training and doers, not talkers. In that context, we strongly advise that there is a need to support the new Teagasc and UCD diploma in dairy management programme which is a first step and a good development.

The next slide deals with the age profile in farming. Most people are aware of it, but it must be reiterated that we need new blood in the industry. That is obvious. The age profile of farmers has disimproved dramatically in the last decade. According to a Central Statistics Office, CSO, survey in 2010, 6.2% of farmers were under the age of 35 years; the corresponding figure was 13% ten years ago, which is a dramatic turnaround. There is a pro rata disimprovement in the age profile over 55 years of age. As it is not a good starting point, this issue is urgent.

With regard to access to land, the association is of the view that there are a number of things that can be done. Individually, they are not big items and they could be easily sorted out. They could contribute a great deal to opening opportunities to young farmers to start farming. The starting point is that, as everybody knows, the capital required to get into farming is very large. It is an expensive business. Land use is the key and the first barrier is the reference year for the single farm payment. The lack of confirmation of the reference year is resulting in less land being available in the marketplace. This is leading to an increase in the price of land which is driven by the fear of landowners that they might lose entitlements or benefits as they arise. The solution is to secure agreement to declare 2011 or 2012 as the reference year. There would be no cost to the State and it would remove the uncertainty and speculation. It would certainly reduce rental price and inflation pressure.

The second point on land access is that as an association, we are tremendously pleased to see milk production partnerships in dairying. The milk production partnerships are in place, but there is a major drawback - the joint and several liability in the arrangements for partners. Some of my colleagues will comment on this issue if they wish, but there is no doubt that it is a barrier to the uptake of partnerships. There is also the difficulty for the manager or other non-partner in joining the partnership arrangement once it is up and running. If we could sort out these problems for partnerships, there would be no cost to the State and it would result in better uptake. If we can get more partnerships up and running, we will have growth and development and the farming economy moving faster to meet the 2020 targets.

The third point on barriers to land access concerns the restrictive regulatory environment and the single farm payment rules.

They prevent people such as neighbouring farmers from taking good practical opportunities to co-operate in joint ventures. They prevent people from making use of excellent opportunities for short-term arrangements between neighbouring farms. The use of land is the important thing, not the ownership. The solution is to revise the rules to allow neighbours to co-operate to utilise fully the land available. There is probably a need for a proactive approach by the Department of Agriculture, Food and the Marine rather than a policeman role. It is difficult to get it right all the time. At no cost to the State, it would enhance the potential for young people to gain access to the land.

A third barrier to access is the restrictive regulatory environment and the continuation of the single farm payment rules. If a farm manager or herdsman employed on a dairy farm, for example, is allowed to run his animals along with those of the employer, using two herd numbers, it is an opportunity for employed people to build up some capital. This can be the first step towards joint ventures in the future. It is a very simple measure to promote the first step.

We could also consider some of the European schemes involving low stocking rates. The rates are so low that it is an encouragement not to farm the land. We can put arrangements in place, within the regulations, to co-operate with neighbours. There are restrictions on dates with regard to the definition of farming. If we could allow cows to be milked on the extra land of a neighbour, we would expand cowherd size and the arrangement between neighbours would work productively for both and contribute to the farming economy. It is a step-back arrangement rather than full retirement.

We have a few proposals on taxation, one of which is the reintroduction of stamp duty relief on farm consolidation on land swaps. We also suggest it is important to maintain the existing stamp duty relief on land transfers for young trained farmers. Along with the farm consolidation and tax relief, it is important to promote the stamp duty relief. There was suspicion about it before and it needs to be promoted. Farmers must be encouraged to avail of it. The fault may lie with farmers for not using it enough. The association feels there will be a greater interest in this in the new era because we are looking to expand the industry. Any arrangement that helps will be seen as an advantage.

The association believes the fear of losing farmer status through long-term leasing is real. It is a practical difficulty in terms of capital tax liability. Where a farmer is no longer treated as a farmer for tax purposes, the family can fall into problems with capital gains, capital acquisitions or inheritance taxes. That is a shame if land leasing can make land available to young people who want to get started.

Full tax relief for long-term leases needs to be retained. From listening to farm managers, I feel it needs to be promoted, because people do not realise the incentives exist. My final point was the subject of a full submission by the Irish Farm Managers' Association to the Department of Finance some weeks ago. While there is stock relief for young farmers, if there is not enough profit in years one and two, which is likely in a start-up situation, there should be a roll-over of the under-used stock relief. It should be allowed to accumulate or roll over for the first four years.

My next point on the barriers to land access refers to the support framework for young trained farmers. The installation scheme is excellent for helping young people to set up in farming and it should be restored. An established grant should be considered for farm managers who have a joint venture arrangement in equity or as employees. This will help them to get stock established and use it as a stepping stone to future partnership. Equity joint venture farm managers should be eligible for the installation scheme if it is reintroduced. We propose low-interest loan packages for young trained farmers and, finally, we suggest to the committee and the Department an underwriting scheme be put in place for bank chattel mortgages on farms. This will allow farmers to get the capital to buy stock. This applies particularly to owners and joint ventures involving young farmers. Capital is a huge issue.

In summary, we strongly believe agriculture can lead to economic recovery. Food Harvest 2020 may be an historic new era for us. The training and education of young farmers is key. A number of barriers exist. There should be a proactive taxation policy to encourage young people to set up in farming; we need to support young trained farmers. This would create jobs on farms, stimulate the rural economy and communities and promote economic recovery.