Andrew Doyle (Wicklow, Fine Gael)
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Question 56: To ask the Minister for Agriculture, Food and the Marine the reason behind the changes made in budget 2012 including his main priorities for the agricultural sector; and if he will make a statement on the matter. [38926/11]

Simon Coveney (Cork South Central, Fine Gael)
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The taxation measures announced in Budget 2012 reflect this Government's commitment to the agri-food industry and in particular to 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 were designed to encourage collaboration between farmers and to facilitate the timely transfer of agriculture land to more active and younger farmers.

The new stock relief incentive for farm partnerships will 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.

The reduction in stamp duty 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.

The changes in Capital Gains Tax will incentivise the earlier transfer of farm assets to the next generation, and encourage the sale of land by those farmers with no successors. 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.

All of the measures outlined above are designed to increase productivity and help the sector in attaining the challenging targets outlined in the Food Harvest 2020 strategy.