Written answers

Thursday, 3 November 2011

Department of Agriculture, Marine and Food

Farm Retirement Scheme

3:00 pm

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry South, Independent)
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Question 135: To ask the Minister for Agriculture, Food and the Marine the steps he is taking to ensure that it will be attractive for young farmers to take over the family farms; the level of funding that will be made available for this purpose; and if he will make a statement on the matter. [32614/11]

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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We are all aware that there is a need to improve the age structure of our agricultural work force, and to support well-educated young farmers who will be the platform for further innovation and growth in our agriculture industry. To achieve our Food Harvest 2020 targets, Ireland will need to respond to new market opportunities, and young people tend to be quicker to adapt when change is required. The number of farmers under 35 in Ireland is very low, just 7% of the total. A recent Commission study found that 'younger managers tend to perform better than the EU average, with 46% more area and 57% more economic potential for 21% more labour force'[[1] Commission Staff Working Paper, Impact Assessment, CAP towards 2020, Annex 1: Situation and prospects for EU agriculture and rural areas , p. 25. Brussels, 12/10/2011. 1] . There are several measures in the tax system that encourage the transfer of land to young farmers. For example, if a farmer increases the value of his stock over the course of his accounting year, he is entitled to deduct 25% of this increase against his trading profit for tax purposes. But young trained farmers can deduct 100% of any increase in stock valuation. This full relief is available to young trained farmers for four years.

Another measure is the relief from stamp duty for young trained farmers when they purchase land or have it transferred to them. This is designed to encourage the transfer of farms to young farmers. When it is combined with agricultural relief from Capital Acquisitions Tax it encourages inter-generational transfers. There are also reliefs from Capital Gains Tax to encourage farmers over the age of 55 to hand the farm on to the next generation. There is full relief from Capital Gains Tax if the farm changes hands within a family. ([1] Commission Staff Working Paper, Impact Assessment, CAP towards 2020, Annex 1: Situation and prospects for EU agriculture and rural areas, p. 25. Brussels, 12/10/2011. )

We have also generally favoured young farmers in aid rates and/or selection criteria for on-farm investment support measures. However in my view, we should also consider further measures to assist young trained farmers, and I think that it is sensible to provide for such support in both Pillar 1 and Pillar 2 of the CAP. In this regard I have welcomed the measure in relation to Young Farmers in the recent CAP reform proposals from the Commission, which mandates Member States to use up to 2% of the national direct payment ceiling to make top-up payments to young farmers for a five year period. This is a proposal that Ireland was particularly active in pressing with the Commission in advance of the emergence of the legal proposals and one that we will continue to support in the negotiations.

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