Written answers

Wednesday, 30 November 2016

Department of Agriculture, Food and the Marine

Farm Household Incomes

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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33. To ask the Minister for Agriculture, Food and the Marine the extent to which he expects to be in a position to continue to engage with the agri-food sector with a view to achieving a stabilisation of income deriving from agricultural produce, with particular reference to the need to ensure a sustainable income leading to a steady supply to the consumer; and if he will make a statement on the matter. [37690/16]

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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Ireland is a small open economy which exports the vast bulk of its main agricultural commodities. Therefore producer prices in Ireland are largely determined by commodity prices on world markets, rather than by production levels within Ireland itself. We have seen significant commodity price volatility on world markets over the last few years. However, there are measures in place to help Irish farmers through these periods. Direct payments, estimated by Teagasc at an average of over €17,000 per farm in 2015, provide a valuable source of farm income support and act as a hedge against price volatility.

Food Wise 2025, the new ten year strategy for the agri-food sector, identifies the opportunities and challenges facing the sector, and provides an enabling strategy that will allow the sector to grow and prosper. Food Wise includes more than 400 specific recommendations, spread across the cross-cutting themes of sustainability, innovation, human capital, market development and competitiveness; as well as specific sectoral recommendations.

Food Wise is not just about expanding production, I believe that moving up the value chain where possible, in terms of the type of products sold and how they are produced, is an important hedge against volatility.

The implementation process for any strategy is vital for its success. I chair the Food Wise High Level Implementation Committee (HLIC), with high level representatives from all the relevant Departments and State agencies. The committee reviews progress on detailed actions on a quarterly basis, in order to identify and solve problems quickly. Stakeholders regularly present to the committee meetings on their priorities for particular sectors or themes and by the end of this year, the HLIC will have reviewed in detail progress on the five cross-cutting themes and the twelve individual sectors outlined in Food Wise 2025.

Since taking up office, one of my priorities has been to address the impact of the sustained period of lower commodity prices on farmers. I met with a range of stakeholders in advance of the recent Budget and I have been engaged, both at National and EU level, to address the issues involved and to ensure that we continue to have a sustainable and resilient sector. As part of the recent Budget, I announced a “three pillar strategy” to alleviate the pressures of income volatility through:

- Lower Cost Finance: I announced plans for an ‘Agri Cashflow Support Loan’ fund of €150 million, which will support highly flexible loans at an interest rate of 2.95%, for amounts up to €150,000 and for terms up to six years.

- Tax Measures: I agreed with my colleague the Minister for Finance an adjustment to the current ‘Income Averaging’ system, allowing for an opt-out in an exceptional year.

- Farm Payments: Spending on farm schemes through the Rural Development Programme will see €601 million go directly to farmers in 2017, including a new €25 million sheep welfare scheme and increased participation in GLAS, BDGP & TAMS. This is on top of €1.2 billion paid through the Basic Payments Scheme.

My Department will continue to engage with the Department of Finance on key agri-taxation policy objectives, including responses to income and price volatility.

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