Denis Naughten (Longford-Roscommon, Fine Gael)

I wish to speak on Resolution No. 5, relating to agricultural VAT relief. I welcome this measure but point out that when agriculture and general inflation is taken into account, farmers will be short changed by this calculation. The resolution should provide for the payment to farmers not registered for VAT because of their input costs over the previous three years. However, they can only recoup VAT through the sale of produce to a VAT-registered business.

As we know, the introduction of the single farm payment has meant that commodity prices in general have gone down and will continue to do so. The volume of production going through farms is also going down, so farmers are losing out because they are not selling the same amount of product and therefore cannot get the refund back in VAT that has already been paid on inputs.

We were also promised a review of this structure a number of years ago but nothing has happened. It is unacceptable that the issue has not been reviewed, as a significant anomaly exists within the current system of recovering VAT paid by farmers on input costs. The mechanism which exists of getting it back through the sale of produce will not allow farmers to do so because of the single farm payment.

Agricultural inflation is running significantly higher than ordinary inflation, and this has not been taken into account in the rise of output costs. Yet the farmer's returns from produce has decreased because of the significant control of grocers and major retailers over food produce. Milk is a significant example of what has gone on over the last number of years. Farmers are genuinely being short changed.

This increase should have come about last year, when there was no change made to the recovery of VAT for farmers. As a direct result, farmers have lost out on an additional €16 million that they should have been entitled to recoup. Will the Tánaiste and Minister for Justice outline when this review will be completed, as it has been ongoing for the past two or three years? It is about time we got a decision.

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