Creed Announces DAFM Budget for 2020 & First Wave of ‘No Deal’ Brexit Contingencies

The Minister for Agriculture, Food and the Marine, Michael Creed T.D, today (Tuesday) announced details of his Department’s 2020 Budget.

Speaking this afternoon, the Minister stated, “Today’s budget is unique in that it aims to preserve the strong financial supports that assist our Agri-Food sector, while simultaneously providing for the potential of a significant shock to the sector in the guise of a ‘No Deal’ Brexit. Against this backdrop, my priority has been to support sectoral vulnerabilities that exist and to maintain a strong focus on climate action and environmental sustainability. I also wanted to maintain the ambition for the development of our food industry while helping farmers, fishermen and food SME’s to navigate the challenges of Brexit. Today’s Estimates provide a gross Vote of €1.647 billion for the Department. This is €51 million more than in 2019, and is a 3% increase on the 2019 allocation.”

First tranche of No Deal Brexit supports €110m

Outlining the Government’s ‘No deal’ Brexit package designed to assist the most vulnerable sectors in the event of a ‘No Deal’ Brexit Minister Creed continued, “The Minister for Public Expenditure and Reform has confirmed that the Government will provide a ‘No Deal’ contingency fund to support our most vulnerable sectors, with up to €650 million available overall, to be activated in tranches as the full impacts of Brexit emerge. €110 million will be made available for the agri-food sector in the first tranche, to be supplemented by any exceptional aid provided from the EU.”

If the UK leaves without a deal, we will work our way through the necessary state aid provisions to deploy these resources in the most effective way possible. The provision of immediate support for our beef sector (€85 million) will be a first priority, as will support for our fishing fleet (€14 million). We will also want to support food companies wishing to re-orient production and marketing towards non UK markets (€5 million) and to provide necessary support to other sectors to improve competitiveness (€6 million).

While supports cannot fully address the negative effects of a No Deal for the agri food and fisheries sectors, this first tranche of supports will be used to ameliorate the immediate impact on farmers and fishermen, as the full impact of a No Deal Brexit crystallises, and to make some of the adjustments needed to improve resilience for businesses in the face of new market realities.”

Farm supports

Referring to the 2020 provision for his department notwithstanding Brexit, Minister Creed focused in particular on the difficulties in the beef sector, “Regardless of Brexit I am providing almost €85 million in targeted schemes to support sustainable beef farming. This includes almost €45 million for the Beef Data and Genomics Programme (BDGP), and a further €40 million for targeted supports. I intend to consult with stakeholders as to the use of these funds.

In broad terms the following options will be considered:

the continuation of the pilot BEEP suckler cow/calf weighing scheme, under de minimis State Aid provisions, with a view to such a measure becoming part of the next RDP, subject to an evaluation of its effectiveness. Farmers have responded very positively to this scheme. It will encourage weighing as a matter of course, in order to improve the environmental and economic performance of each suckler cow.

the provision of supports for beef farmers rearing dairy beef animals, to encourage best practice and improve the efficiency of such enterprises. There is real potential for dairy beef to provide a new income stream for beef farmers, provided we get the fundamentals right;

encouraging farm practices that ensure the very highest standards of animal welfare on beef farms.

The Minister indicated that €18 million is included for the continuation of the sheep welfare scheme, and that the budget for Bord Bia will be increased by more than €1.6 million with much of the additional funding to be used to promote Irish beef and sheepmeat.

Climate Action

Minister Creed referred to the Government’s Climate Action Plan and indicated that he had been cognisant of the need to support measures that could assist the farm sector in this area. Minister Creed added, “I am providing more than €103 million in support for the forestry sector, in recognition of the vital contribution it can make in mitigating climate change and augmenting farm incomes. The adjustments to the programme as a result of the Forestry Review in 2018 have already resulted in a much more diverse species mix than previously.

Together with the planting by Coillte in partnership with Bord na Mona, this provision can support afforestation of 8,000 hectares, in line with our ambition under the Climate Change Plan.

I am also increasing the provision for on farm investment, by more than €12 million, bringing the total to almost €91 million. This will fund investment in a range of environmental and competitiveness measures, including Low Emissions Slurry Spreading, solar panels, and slurry storage, as well as support for the horticulture and organics sector.”

The provision for agri environment schemes is increased by €5 million, bringing the total to almost €235 million. This includes an increase in funding for locally-led schemes in 2020.

These local environmental schemes are one of the real success stories of our Rural Development Programme. Through the long-standing Burren Programme, the newer Hen Harrier Project, the Pearl Mussel Project and many smaller local schemes, the Government is supporting farmers and local communities to deliver for the environment.

As part of a special allocation of €3 million to fund additional pilot projects aimed specifically at climate measures in agriculture. A call for a new pilot EIP scheme on reduced management of farmed peat-land will be announced in due course. This is designed to increase carbon sequestration and contribute to meeting our commitments as part the Government Climate Action Plan. It will also enhance the protection of bio-diversity and water quality and provide a template for action in advance of Irelands next Common Agriculture Policy.

Between payments funded through the exchequer and from the EU, total payments to farmers in 2020 will be €2 billion.

Fisheries

The provision for the Department’s Seafood Programme has been increased by €5 million, to a total of €137.8 million. The provision will help fund vital investment in our fishery harbours, most particularly in Killybegs, Howth and Castletownbere. The budget provision will allow the Marine Institute to progress the construction of a new €50 million modern research vessel. This will provide critical national infrastructure to enable Ireland to address the considerable challenges of Brexit and the Common Fisheries Policy as well as climate induced impacts on our oceans.

Food industry

In relation to the food sector, Teagasc’s capital provision of more than €9 million will permit it to proceed with the development of the food hub in Moorepark. €8 million is retained to support innovation in the Food Sector.

Horses and greyhounds

The Horse & Greyhound Racing Fund will be allocated €84 million and an additional €1 million will bring the 2020 allocation for Horse Sport Ireland to €4 million to assist with the strategic development of the sector.

Agri-taxation

Outlining the Agri-taxation measures in Budget 2020, Minister Creed commented, “The range of existing specific agri-tax measures are estimated to provide €240 million a year in supports to the sector. I am pleased that these supports have been maintained. I have also agreed with Minister Donohoe that our Departments will engage on potential measures to assist farmers in meeting the challenges and obligations set out in the Climate Action Plan and to incentivise better health and safety in the sector.”

Measures include:

The renewal of Capital Gains Tax Relief on Farm Restructuring, which will continue to address the challenge of fragmentation on Irish farms and will lead to improved efficiency and environmental benefits.
The increase in the Earned Income Tax Credit to €1,500. Most farmers, foresters, fishers and small food processors are self-employed and will see their tax liability fall with the increase in the tax credit.
The increase in the qualifying production threshold for microbreweries to 50,000 hectolitres, allowing larger breweries to expand, particularly with a view to their export sales.
The enhancements to existing tax-based measures in support of enterprise, SMEs and the agri-food sector, i.e. the Key Employee Engagement Programme (KEEP), the Employment and Investment (EII) Scheme and the Research and Development Tax Credit.

ENDS

Date Released: 08 October 2019