Michael Creed (Cork North West, Fine Gael) | Oireachtas source

My priority for budget 2018 has been to deliver on a package of measures designed to help farmers, fishermen and food SMEs navigate the challenges of Brexit while furthering the objectives of the Food Wise 2025 strategy. Next year, the Exchequer contribution to my Department's Vote will amount to €1.556 billion in capital and current expenditure. In addition to the Department's Vote, in 2018 Ireland will receive €1.2 billion in direct funding from the EU for the basic payment scheme and advance payments of 70% will begin to issue to farmers next week.

Brexit poses serious challenges for the agrifood sector. The provision of support for vulnerable farmers, fishermen and for investment, innovation and market development in a food sector challenged by this uncertainty is a key feature of next year’s budget. In 2018, we will continue to focus on building competitiveness and new market opportunities while protecting vulnerabilities at all levels across the sector. I am a putting in place a comprehensive €50 million Brexit package of measures to support continued growth in our food exports, which increased by 13% in the first six months of 2017. Ensuring our food exporters, especially our SMEs, are competitive from a cost perspective in the international marketplace is a basic element of how we will meet the challenges posed by Brexit. My Department, therefore, in conjunction with the Department of Business, Enterprise and Innovation has secured budget funding for a new €300 million Brexit loan scheme to be delivered by the Strategic Banking Corporation of Ireland, SBCI, through commercial lenders. This scheme will provide affordable, flexible financing to Irish business impacted by Brexit. Given the agrifood sector’s unique exposure to the UK market, my Department’s funding for this scheme totalling €9 million ensures that at least 40% of the fund will be available to food businesses.

Following on from the very positive reaction by farmers to the agriculture cashflow support loan scheme, which proved that significant demand exists for low-cost flexible finance, I am also providing €25 million to facilitate the development of new finance schemes next year for farmers, fishermen and food businesses. This funding provides a significant opportunity to leverage Exchequer funding into a significant loan fund which will be flexible enough to meet a range of financing needs for the sector. Details of these schemes will take some time to develop and will be announced in 2018. I will also allocate €5 million for the provision of capital grant aid to companies to carry out investment in the areas of improved efficiency and enhanced productivity.

The budget focuses on building new market opportunities abroad, particularly for food exporters with a significant exposure to the UK market. Since the Brexit decision, my Department has placed great emphasis on enhancing its own capacity and that of Bord Bia in the area of market diversification and new market access. Following on from the additional €10 million that I have allocated to Bord Bia since the Brexit vote, I will put forward another €4.5 million in 2018 to assist the agency in its promotional and developmental work overseas. In the areas of innovation, research and new product development, I propose to allocate an investment of €5 million to fund research and innovation in the prepared consumer food sector, a segment which is especially exposed to Brexit. Later this week, I will announce the establishment of a national food innovation hub, a facility where research, innovation and diversification in food, necessary to address the Brexit challenge, can flourish. This is in addition to the substantial provision of €18 million for fundamental agriculture food and forestry research.

In light of the specific vulnerability of the seafood sector to Brexit, €40.5 million will be allocated to the continued roll-out of the seafood development programme to support fishermen and seafood processors in the coming year.

With regard to the rural development programme, RDP, in total €626 million will be invested in the rural economy, direct to farmers, through the RDP schemes. I am particularly pleased to have delivered on the programme for Government commitment to increase the areas of natural constraint, ANC, scheme allocation for 2018. This increase will bring the allocation to €227 million for a scheme that provides invaluable direct financial support to farmers with lands in the many naturally constrained parts of the country. While I am conscious, in response to Deputy Healy-Rae, that in adding €25 million to that allocation, we will not fully close the gap on the cuts that were introduced in 2009, it is a programme for Government commitment. It will be benefit a substantial number of farmers. The payment is usually made in September and October and, therefore, it will be made at the back end of 2018. The next question we will have to consider collectively is how that is allocated among the different categories of disadvantaged provided for under the ANC designation. I have also provided for an increase of €20 million for the targeted agricultural modernisation scheme, TAMS, bringing the total funding available in 2018 up to €70 million.

I welcome the taxation measures announced by Minister for Finance, which I sought in my annual agri-taxation budget submission, including the renewal of stamp duty consanguinity relief on transfers of farmland, which facilitates succession and the earlier intergenerational transfer of family farms.

That rate remains at 1%. It should be noted that farmers under 35 years of age who qualify as young trained farmers are fully exempt from stamp duty on farm transfers by gift or sale. These reliefs provide significant incentives to encourage earlier inter-generational farm transfer. There are also generous incentives in place to encourage long-term leasing of agricultural land.

With regard to promoting renewable sources of energy, where active farmers lease farmland for solar panel use, it will be considered as eligible for agricultural relief and retirement relief. There is a continuation of measures to promote and support entrepreneurship by increasing the earned income tax credit by €200 to €1,150. It is a welcome step in the right direction. I acknowledge it is not the completion of equity with self-employed people. Deputy Michael Healy-Rae spoke eloquently about the need to promote the interests of self-employed people, but this is a step in the right direction. There is a further distance to travel but taken in conjunction with a series of measures we have introduced in the tax and social welfare codes, by extending benefits to the self-employed that they did not previously enjoy, it is recognition that the Government acknowledges the point made by Deputy Healy-Rae. These people provide employment for themselves, first and foremost, and often provide employment for many others as well. It is right and proper that we should recognise those risk takers. They take risks, put their money up-front and often provide employment for other people. It is right and proper that they should have the benefits of the tax and social welfare codes reflect that. My Department and I will continue to work closely with the Minster, Deputy Donohoe, and his Department on exploring further taxation measures for income stabilisation.

In recent years there have been significant improvements in the tax code as a consequence of an exercise established by my predecessor, Deputy Coveney, when he held this portfolio. There is a total of €350 million in appropriate targeted incentives for the agriculture sector to reflect the challenges it faces, such as dealing with volatility. Last year we had the five year income averaging, but I acknowledge that we must continue to add to the toolbox available to people to navigate income volatility in the sector.

Deputy Danny Healy-Rae also mentioned the hen harriers. That is another sector that suffered a quite draconian cutback in 2009 when the scheme of compensation was abruptly pulled from it. Following a public tender process we have appointed a consultant to design a scheme for people whose lands are affected by that designation. I hope that before the end of this year, or at the latest early in 2018, we will be in a position to open a scheme to invite applications from farmers whose lands are designated under the hen harrier designation and that payments would be made later in 2018. That is a step in the right direction. It does not address all of the restraints. As the Deputy said, there is a series of restrictions on those lands. One is in the area of forestry. It has taken too long to address those issues under the threat response plan. However, we moving in the right direction in that context and I am happy that my Department, in conjunction with the Department of Culture, Heritage and the Gaeltacht, under the Minister, Deputy Heather Humphreys, will shortly be in a position to conclude that process which I hope will see a further easing of some of the restrictions on forestry on those lands as well. The two measures will go some distance in addressing an issue that has been ongoing for far too long without being adequately addressed.

I have given a brief overview of the range of measures that apply in the agrifood and marine sectors for 2018. I am confident that I have secured the funding necessary for the continued development of the Irish agrifood and marine sector in line with the strategy outlined in Food Wise 2025 and in meeting the challenges and opportunities that lie ahead.

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