Written answers

Wednesday, 1 June 2022

Department of Agriculture, Food and the Marine

Agriculture Industry

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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240. To ask the Minister for Agriculture, Food and the Marine his plans address the extreme volatility in farming based on a farm management deposit scheme model; and if he will make a statement on the matter. [28389/22]

Photo of Charlie McConalogueCharlie McConalogue (Donegal, Fianna Fail)
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While taxation policy is primarily the responsibility of my colleague the Minister for Finance, we work closely to ensure that it is consistent with the Government's priorities for the agri-food sector.

As part of Budget 2019, a “Report on Tax Expenditures Incorporating outcomes of certain Tax Expenditure & Tax Related Reviews completed since October 2017”, including the implementation of the 2014 Agri-taxation Review, was published. It also included an “Evaluation of income stabilisation”, including consideration of a deposit-type scheme. The Minister for Finance decided not to introduce such a  measure at the time.

Income averaging for farmers is an important agri-taxation measure and it assists in addressing income volatility. It allows farmers to pay tax based on the average of the preceding five years farming profits and losses.

As an additional support, farmers may also elect to temporarily step-out of averaging for a single year, for example where market returns are particularly bad and cashflow does not support the payment of an average year’s tax. The tax payable for that year is based on actual profits for that year, with the tax due on the average profits deferred.

The current Programme for Government contains a commitment to consider further taxation measures to manage evolving issues such as market volatility and this will be kept under review.

My Department recently considered this issue in the context of developing the CAP Strategic Plan and the role of direct payments and measures such as support for producer organisations and the Knowledge Transfer Programme, which provides financial management training, were identified as helping farmers to manage income volatility.

My Department also funds loan schemes, such as the Future Growth Loan Scheme and the Brexit Impact Loan Scheme, which also assist Irish farmers with access to finance and support in times of volatility. 

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