Mr. Eddie Downey:

He has just finished his green certificate. We are talking here about young trained farmers qualifying for this and we want them to be incentivised by a phased transfer system. It makes absolute sense to go down that route. This is the first time anyone has challenged the whole farm succession issue. To provide a phased process, a period of time by which one gets into a contract and the transfer takes place, gives security both to parents and to young trained farmers during that process. It is a good proposal.

From the point of view of the Exchequer, it could be a benefit, even though there could be a tax incentive within it, in that there would be two active farmers working on a farm plus a young active farmer coming into it to drive it forward. There is a benefit in that for the Exchequer in the long term.

Land leasing continues to be a major issue for us and we need to take the road blocks out of that process. Deputy Heydon spoke the tax relief secured on land leasing. If farmers did not get such tax relief, it would be the death-knell for land leasing. If there is to be a future for agriculture, we must have land mobility and stability within that system whereby a farmer can lease land for a period and actively farm it for that period, knowing that he will have access to it next year, the year after and year after that. That is the only system that will work. It was welcome to get the provision of such tax relief and it is essential that we drive forward the land leasing issue.

Co-operatives want farmers to compulsory share-up in their co-operatives, in other words, to buy shares in them to build their sustainability. Farmers should be able to write off such investment against income tax because it is an investment they have to make in their industry. When such shares are sold, they are taxable at that stage. That is a reasonable measure. It means there is a tax incentive for farmers to buy shares in their co-operatives and the co-operatives will get the money they need to advance and drive forward their businesses. That measure would involve a minimal cost to the Exchequer.

Most members referred to the tax deposit scheme. It would operate on the basis of having a special tax deposit account. One option open to a farmer is to invest a pension which would mean the money would be taken out of the system, pushed to one side and no longer available to farmer and the tax would be foregone on it. That would be a negative from the point of view of the Exchequer. Another option is that a farmer could invest in a company and pay 12.5% tax on all of his income. By placing the money in a deposit account, it means the tax will be foregone for that year but when the money comes back into the business, and it will have to come back in it within a five-year period, the tax will have to be paid on it at that stage. It will come back into the business when it will be of more advantage to the farmer in a low income year and it will help to keep the cashflow steady on that farm over that period. It should be possible for the farmer to secure a loan against 50% of its value, because tax on it would be paid at the rate of 50%, and therefore, it would not affect the cashflow on the farm, and the farmer could continue to grow the farm. There will be a particular period of high investment over the next period and a number of measures in our proposal deal with achieving what is set out in Food Harvest 2020 where there will no longer be milk quotas next year, when farmers will have make considerable investment, particularly in the area of incentives for stock relief for those first four years.

It is essential that the €500 million for the rural development programme is in place in this year's budget. Schemes under it must be got up and running. A number of members asked questions about the timeline around GLAS. The rules and regulations around it should be available by next year and applications for it should be in place early next year. The idea that all applicants must have their applications in before there is an opportunity for the planners to put in the full plans for it is a non-runner. This scheme must be brought in on a phased basis over the year. Those who submit their applications will get them in early and the scheme can be got up and running as quickly as possible. On the issue of the planners being involved, we should let them worry about that, we should get the scheme up and running and get the money in place to make sure that happens. As was clearly laid out, no scheme was available last year. A number of farmers have not participated in a scheme for the past two or even three years. They are ready and willing to get up and running as quickly as possible with a new scheme.

On the issue of the pay and file date, it is essential that the pay date is held. We would prefer to leave the file date as it is. There would have to be a period of readjustment within that and it creates complications for the accountants and the professional system but it is essential that the pay date is held.

Deputy Ó Cuív asked a question on the tax credits. We estimate there is a €170 million paid by self- employed people in extra tax that is not paid people within the PAYE system. To break that down, a single farmer on an income of €20,00 pays 20% tax whereas an employee in the PAYE system on an equivalent amount would pay about 10% tax. There are 135,000 individuals who pay at that level and some 90,000 of them probably earn more than €17,000, therefore, we are looking at a figure of €170 million. That is an amount foregone. This is what the lack of an allowance costs the self-employed and we consider that to be an anomaly in the system. We are well aware of the state of the public finances but we flag this as a major issue and it is something that should be addressed in due course.