Seanad debates

Monday, 31 May 2021

Nithe i dtosach suíonna - Commencement Matters

Agriculture Industry

10:30 am

Photo of Malcolm ByrneMalcolm Byrne (Fianna Fail)
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I thank the Minister of State for coming to the House to respond to this matter today. I fully appreciate that the Minister, Deputy McConalogue, is busy with the Common Agricultural Policy, CAP, negotiations. I hope he will continue to resist calls for higher levels of convergence and that he will continue with the fight to ensure productive farms remain viable in Ireland, particularly for young people.

I have raised this matter because, in respect of the age profile of those involved in farming, over 55% are aged over 55, whereas only 5% are under the age of 35. In its Irish farm report which was published last month, the Irish Fiscal Advisory Council, IFAC, found that 71% of the farmers it surveyed had not yet identified a successor, and one third of them cited the fact they believed the farm they were farming was no longer viable. Let us put that into context by looking at careers or professions with similar numbers. Taking the public service, for example, if 55% of gardaí or teachers were over 55 and only 5% aged under 35, it would be a major crisis. For any other business, or indeed the civil or public service, that kind of age disparity would represent a major crisis. We are now facing a significant crisis. It requires radical measures to address it.

There are some indications from the CAP talks that around 3% of direct payments will be ring-fenced for young farmers. Macra na Feirme and indeed the European Council of Young Farmers have indicated that figure should be 4% at European level, because it is not just a challenge for Ireland and we need to be that radical. While I accept the Government has significantly increased the budgetary spending on agriculture and has introduced a number of small schemes and various tax measures, none of them have been radical enough to address some of the challenges we are facing.

We need to look at education and greater levels of educational supports for young farmers. We certainly need to look at the financial supports that are in place to ensure it is viable. We need to look at mentoring schemes. We also need to look at the retirement schemes that are in place to ensure they are in the best interests of farm families. I have spoken to many young farmers and they have often told me it is not just that they have to support their own families on the farm but also they often have to support their parents. Farming is a multigenerational activity.

As with all of farming, the biggest challenge is around the question of income levels. The issue is how to make farming attractive as a career. Farmers have no problem with working long hours, but the difficulty is that while we are seeing increased productivity, we are not seeing increased profitability. When there are so many other options for young people coming from rural and farming backgrounds, there is less of an incentive to take over the farm and engage in food production.

It is essential we continue to have farming and food production that is sustainable environmentally, but it is also vital we have a farming system in Ireland that is sustainable financially. I worry that if we do not take radical action now, we are going to continue to see the flight from the land. We are going to see fewer and fewer young people engage in farming and seek to take over the family farm. As we have seen, the challenge we will face will be that the age profile of those who are farming will continue to increase.I am asking that we be radical in our approach and look at those levels of intergenerational support, particularly in the CAP negotiations.

Photo of Malcolm NoonanMalcolm Noonan (Carlow-Kilkenny, Green Party)
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The Senator is correct, and I wish my colleague, the Minister for Agriculture, Food and the Marine, Deputy McConalogue, the very best in the ongoing negotiations, which are critical in the context of the future viability and sustainability of farming in Ireland. We will certainly fight Ireland's case in that regard.

The Senator is correct about the significant challenge. The challenge of generational renewal is widely recognised at both national and EU levels. It is about anticipating and managing risk. Slightly more than 5% of farmers in Ireland are under 35 years of age. Supporting young farmers and facilitating generational renewal are critical to ensuring a bright future for the agrifood sector. This challenge is not unique to Ireland because there are similar statistics throughout the EU. Generational renewal has been cited as one the key objectives of CAP. Under the new CAP proposals, member states will have to incorporate in their CAP strategic plans comprehensive plans to develop young farmers and encourage farm succession. Commission proposals have suggested an amount equal to 2% of the direct payments envelope for this purpose. During the negotiations, it has been suggested that this funding should be increased. This issue is being considered. Unfortunately, Ministers were unable to reach a conclusion on this CAP reform proposal last week in Brussels. However, all parties have indicated their willingness to support young farmers.

At national level, the programme for Government states that we must nurture and protect the generational nature of Irish farming by providing opportunities for new farmers and producers to enter the sector in a financially viable way. A suite of measures is in place to support young farmers. Under the current CAP, the national reserve for young farmers scheme provides financial support to young farmers during the critical early years when setting up. Additionally, under the targeted agriculture modernisation schemes, TAMS, II young farmer capital investment scheme, young farmers can avail of a 60% grant rate as compared to the standard rate of 40%. There is also support available for collaborative farming to cover legal costs incurred. From 2015 to 2020, some €110 million was issued in total under the young farmers scheme, benefiting an average of over 8,000 farmers each year. A further €35 million has been allocated since 2015 to young farmers under the national reserve. Under TAMS II, over €125 million has been paid to approximately 4,974 young farmers.

There are a number of significant taxation measures available to young farmers. To assist succession, there is agricultural relief from capital acquisitions tax, retirement relief from capital gains tax and stamp duty exemptions on transfers of land. In addition, the succession farm partnership scheme provides for a €25,000 tax credit over five years to assist with the transfers of farms within a partnership structure. To facilitate land mobility, there is long-term leasing income tax relief. It allows young farmers and new entrants to the sector to gain access to land. It also provides a route to retirement for older farmers, assisting in generational renewal. A 100% stock relief on income tax for certain young trained farmers also assists young farmers in the setting up phase. The most recent figures published by the Revenue Commissioners for all these measures show that there was an annual support of over €228 million provided across various national tax reliefs. The future growth loan scheme supports strategic long-term capital investment. Loans of up to €500,000 are unsecured, making it a viable source of finance for young and new entrant farmers. It has seen huge demand, with 38% of the number of loans, 1,269 loans worth €150 million, sanctioned to date.

The Department of Agriculture, Food and the Marine's statement of strategy and the draft agrifood strategy to 2030 are currently out for public consultation. These have set out objectives to improve generational renewal. Supporting young farmers and generational renewal continues to be a priority of the Government. The Department will continue to actively engage with stakeholders on this issue.

Photo of Malcolm ByrneMalcolm Byrne (Fianna Fail)
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I thank the Minister of State. It is not just an Irish problem, it is also a European one. However, if we are serious about addressing this issue, talking about only 2% of the direct payments envelope to be targeted at young farmers does not strike me as giving this a sufficient level of priority. The challenge we must examine relates to the question of what constitutes success. I am not saying that there are no schemes in place.If we are looking at 2030, will we have sufficient numbers of young people involved and engaged in farming to ensure that it is a viable activity? My problem is that while the schemes we have are very helpful, I do not believe we are being radical enough. Are we seeking to ensure that farming will remain viable? We need to look at a forum on the future of farming with a very specific focus on how we can engage with young people. We are tinkering around at the edges but if we look at the trends and what is happening there are serious questions on whether farming can remain a viable activity for many young people.

Photo of Malcolm NoonanMalcolm Noonan (Carlow-Kilkenny, Green Party)
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I agree with the Senator on the 2% for generation renewal. Consultations are ongoing but it is certainly not sufficient to address what is a crisis in farming. Generational renewal is a vital concern for farm families and it is a challenging issue. Inheritance and farm transfers are complex. I have highlighted the vital and substantial support provided through the taxation system for generational renewal. Additional supports include €159 million for agriculture relief for 1,413 participants, €27.2 million for 10,820 beneficiaries under long-term leasing relief, €41.9 million for stamp duty exemption for 2,733 participants and €1.2 million for stock relief for 420 young trained farmers. Supports must be targeted at key challenges. Access to credit is often cited as a concern for young farmers. Loans under the future growth loan scheme are unsecured, which makes it a viable source of finance for young and new entrant farmers, particularly those who do not have high levels of security.

It is my intention that the new CAP and strategic plan will continue to focus on strategic requirements and the CAP consultative committee, which considers all matters concerning new CAP proposals, has broad membership providing for ongoing consultation. I acknowledge the concerns raised this morning and it is important they have been raised. I will certainly work with my colleagues. The Department is in negotiations on the new CAP strategic plan in Ireland. We believe that there are wider issues regarding generational supports but it is also about ensuring farmers feel they have a viable future in rural Ireland. This is what we want to achieve.