Andrew Doyle (Wicklow, Fine Gael)
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Question 49: To ask the Minister for Agriculture, Food and the Marine the reason behind any changes made in budget 2012 including his key priorities for the agri-food sector; and if he will make a statement on the matter. [38925/11]

Simon Coveney (Cork South Central, Fine Gael)
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The taxation measures announced in Budget 2012 reflect this Government's priorities for the agri-food industry and in particular the expansion planned in the Food Harvest 2020 strategy. The measures announced have been designed specifically to:

· Encourage farming as a career for young people

· Incentivise farm partnerships and greater productivity at farm level

· Stimulate land sales and land transfers

· Facilitate new enterprise opportunities in farming

· Help agri-food businesses innovate and export

The main measures in the Budget which will benefit the agri-food sector are as follows:

Incentive for Farm Partnerships

One of the most significant new measures introduced in Budget 2012 is the new stock relief incentive to encourage farm partnerships. For registered farm partnerships, the current rate of 25% stock relief will increase to 50%, and, for certain young trained farmers entering such partnerships, a rate of 100% stock relief will be available. This new incentive will run until December 2015.

I am supporting farm partnerships because I believe that collaboration through partnership can improve farm structures generally, facilitating farms to operate more efficiently, increasing scale on farms, and bringing more innovative and energetic young prospective farmers into farming. More farming partnerships are required to increase productivity and meet the Food Harvest 2020 targets.

I am confident that providing an additional incentive to farm partnership formation will encourage farmers to consider more closely the benefits of farm partnerships to their farming business and in providing a better work-life balance.

Encouraging farm partnerships will also support the dairy herd expansion required over the coming years, enabling Irish farmers to avail of the opportunity presented by the abolition of EU milk quotas in March 2015.

Stamp duty reduction

I am particularly pleased that Budget 2012 reduces the stamp duty rate on agricultural land from 6% to 2%, with immediate effect. In addition, half the rate (1%) will be applicable on transfers to close relatives until the end of 2014.

This change will substantially reduce the stamp duty payable on transfers of farm land by gift or by sale. It should stimulate a stagnant land market – currently only 0.5% of total agricultural land is offered for sale annually – and ensure that land transfers to more active producers. It will also promote inter-generational transfer, as the cost of lifetime transfer to transferees who do not qualify for the young trained farmer stamp duty relief has reduced considerably.

I am confident that this measure will give younger, progressive, commercial farmers a greater opportunity to purchase land and thereby increase their farm size, which will make the farm more competitive.

Capital Gains Tax retirement relief Budget 2012 has restructured the retirement relief available on Capital Gains Tax in order to incentivise the earlier transfer of farm assets to the next generation, and to encourage the sale of land by those farmers with no successors. As of 1st January 2014, for those farmers aged 66 and over, an upper limit of €3m will be introduced on family transfers, compared to an unlimited amount currently. On non-family transfers, the current upper limit of €750,000 will be reduced to €500,000. Applying the new limits from 1st January 2014 allows farmers already aged 66 and over to plan the orderly transfer of assets in advance of that date.

It is important to remember that these new measures do not mean that a farmer has to cease farming altogether beyond the age of 66, but it allows them to plan for a phased gradual transfer of assets to the next generation.

We are restructuring retirement relief in order to encourage farmers around the normal retirement age, who have successors, to transfer their land and holdings to young, innovative, ambitious, prospective farmers. This restructuring will also encourage farmers with no successors to sell some of their land before normal retirement age. This measure will encourage an improvement in the age profile of farmers, and should ensure that farmland is put to more productive use.

Food Harvest 2020 measures

A range of measures which will support the Food Harvest 2020 objectives are also being implemented that will contribute to jobs and growth in the agri-food sector.

· The Suckler Cow Welfare Scheme will continue to be fully funded from national funds. In particular, despite the financial constraints faced, I will continue to provide the necessary funding to meet all payments due in 2012 at the current rates.

· I have allocated €5m towards the establishment of a Beef Technology Adoption Programme which will build on the work done to date under the Better Farm Programme. The roll-out of the Beef Discussion Groups will give beef farmers access to a range of additional skills to increase productivity. This programme was a key recommendation of the Beef 2020 Activation Group.

· I am re-opening the Targeted Agricultural Modernisation Schemes (TAMS) which had been suspended earlier in the year because of the uncertain budgetary situation. I am providing funding in 2012 to enable all of the schemes to re-open - Poultry and Pig Welfare, Dairy Equipment, Sheep Handling and Rainwater Harvesting Schemes, as well as the Bio-energy scheme. In addition to providing an incentive for farmers to invest in their enterprises and secure their futures, these schemes will make a worthwhile contribution to job creation and to the maintenance of existing jobs in rural areas.

· In forestry, I am anxious to deliver on the Government's commitment to afforestation and to support a sector which contributes to job creation and to the maintenance of jobs in rural areas and which has a vital climate change role. Overall Expenditure for Forestry will be higher than the published figures and will amount to €111.76 million when the published estimate of €84.86m is boosted by a further €27m by way of carry-over of savings from 2011. This increased forestry funding of €112 million will allow afforestation to continue at roughly 7,000 hectares per annum as well as providing for the building of forest roads. There is no change in relation to the rate of payment of forestry premia, which continue at current levels.