Jackie Cahill (Tipperary, Fianna Fail) | Oireachtas source

Before the budget, all the indications were that volatility in farming incomes would be addressed. I support the comments of my colleagues, Deputies Michael McGrath and McConalogue. Volatility is a problem for the dairy sector and, unfortunately, there is a probability other sectors will come under severe pressure. It is in the dairy sector that the problem really exists.

There has been very significant investment in the dairy sector and, unfortunately, prices fluctuate from year to year. In 2016, we had a year of very bad prices but I am thankful that this year they have improved somewhat. All the indications and reports from Ornua predict that 2018 will again be a difficult year. Milk production is up around the globe. Some markets did not recover throughout 2017 and the butter price has dropped very significantly in the past couple of weeks; the indications are that prices will be under pressure in 2018. When the day comes for income tax to be paid next October, the cash flow on dairy farms will be under pressure and a significant tax bill will have to be paid. This happened in 2016, when income was at its lowest and significant tax bills had to be paid. Unless we address this volatility, we will seriously hamper a sector that has great potential for the economy and which could really deliver for rural Ireland. This is one sector that is driving on and that has the potential to deliver for rural Ireland, which has come under major pressure in the past number of years. Production has rocketed in this country since the abolition of quotas in March 2015 and the predictions of Food Wise 2025 may even be exceeded.

How to handle volatility is probably the greatest pressure on dairy farmers. We have reneged on our responsibility to tackle it in this year's budget. I recommend that the Minister look very seriously at this matter. We are not talking about tax avoidance but rather having a level tax bill year after year. If we are serious about farmers who have invested huge amounts, we must realise that making predictions about cash flow and everything else can be virtually impossible because of the fluctuations in the market. We have the Targeted Agricultural Modernisation Schemes, which have brought investment to the sectors, but the Department of Finance can help rural Ireland and these farmers, who will be the backbone of rural Ireland into the future.

In rural Ireland we have two resources, the agrifood sector and tourism. In 2016, farmers had to borrow to pay their tax bills. We cannot allow that to happen indefinitely. The Irish Creamery Milk Suppliers Association and the Irish Co-operative Organisation Society had proposals that had met a good hearing from the Department of Finance but it was extremely disappointing that some element of their submissions was not included in this year's budget. I request most strongly that we formulate a solution that could negate the differential in taxation from year to year from the system. It is imperative on us to deliver this change for the sectors. I hope other sectors will see this in future but currently the dairy sector is the one that experiences the problem. It is incumbent on us to formulate a solution.

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