Specific Details
White Paper on Enterprise
Intended results
To highlight how the agriculture sector continually proves its resilience and represents the foundation stone on which economic activity and employment (both upstream & downstream) revolve in many towns, villages and surrounds throughout rural Ireland.
The sector employed 163,600 people or 7.1% of total employment in 2020. Outside of Dublin and the mid-east region, the sector provides between 10% and 14% of employment. At an aggregate level, some 137,500 farms producing over €8.2 billion in output; over 770,000 hectares of forest; and over 2,000 fishing vessels and aquaculture sites producing fish with a value of €700 million, underpin the sector .
While the integral role and importance of FDI to the national economy cannot be contested, the value of Indigenous industries too should not in any way be undervalued or diminished. DPER data suggests that aggregate Direct Expenditure from Irish-owned firms are comparable with Foreign Owned firms (€27.6bn vs. €29.8bn), with significantly higher proportions of Food, Drink & Primary Production sales consumed locally relative to Foreign Owned firms – 75% vs. 9.7% respectively.
To highlight how, in the context of increased global uncertainty, and possibly recession, that it was the Agri-Food sector that was instrumental in pulling the Irish economy out of deep recession after 2008, but enjoyed limited benefits itself. Indeed, there has been a clear and obvious reduction in farmers share of the value chain
In this regard it is critical the new Office for Fairness and Transparency in the Agri Food Supply Chain ensures a fair share of the consumer euro goes to farmers. It must however have full powers of investigation and be able to compel actors in the chain to provide them with real data and back up documentation. Just doing ‘market analysis' based on ‘publicly available' information will not redress or improve anything.
To highlight how Food & Drink exports totalled a record €13.5bn in 2021, (€37m/day) accounting for 9% of total exports in value terms. Between 2010 and 2021, total exports from the sector increased 71%. The strong growth in exports is however not having a proportionate impact at farm level, where at best aggregate farm incomes have remained static in the last decade.
To demonstrate how Irish farmers, across all sectors, are facing into an increasingly uncertain future. Increasing regulation, Brexit-related trade disruption, climate action and reduced Common Agricultural Policy (CAP) direct payments receipts for some of our most productive farmers from 2023 leaves Irish farming in a perilous position.
The most immediate/short-term challenge is however the energy and input price crisis following the Russian invasion of Ukraine, where farmers across all sectors are being hit by an array of spiralling input costs, which are eroding already low margins for most. Agflation far exceeds general and indeed food price inflation, with negative terms of trade evident throughout 2022 to date.
Unlike others, farmers have not had the luxury of being able to pass on the added cost of production to others, and so cannot be left to carry all the risk. A continuation of targeted Government interventions will be required in the short-term.
IFA recommendations for Building business resilience post Brexit
The United Kingdom (UK) has, and will remain, a key strategic market for Irish Food & Drink exports, however Irish farmers have been forced to endure the adverse consequences of that unexpected Brexit vote in June 2016, operating often within the realm of negative market sentiment; currency fluctuation; protracted EU/UK negotiations; uncertainty and indeed a series of Hard Brexit cliff-edges, which unfortunately even today, remains a possible reality/
Given their inherent risk, primary producers must receive the largest proportion of Irish allocated BAR funding, with a series of targeted support measures provided to preserve/sustain on-farm operations and mitigate the adverse impact of Brexit – both those encountered to date and those potentially yet to come.
1.Direct, targeted financial aid, in the form of De Minimis aid, to compensate for lost income incurred as a result of the weakening of sterling; atypical seasonal demand and/or other direct Brexit related reasons. 2.Subventions on added cost of production. 3.Measures, including direct-aid to support improved performance, efficiency and/or sustainability of the agricultural holding and therein support improved income resilience.
4.Measures to reduce reliance on inputs by directly supporting farmers to implement measures that improve soil health and animal health leading to higher production efficiencies. 5.Measures to promote On-Farm Diversification. 6.Measures to support Intergenerational Renewal / Collaboration type supports/models. 6.Measures to attract, sustain & diversify skills/expertise in the Irish Agri sector. 7.Development of specific volatility and risk management measures.
Measures to Support Climate Action -
Irish farmers are fully engaged and committed to climate action. The Climate Action and Low Carbon Development (Amendment) Act 2021, which was passed in July 2021, sets a legally binding target of a 51% reduction in emissions by 2030, relative to a baseline of 2018. Under the Act, the Government is required to set sectoral emissions ceilings for each sector of the economy.
This will mean the Minister of Agriculture, Food and the Marine will be legally obliged to introduce measures to ensure emissions from Agriculture remain under the sectoral emissions ceiling.
IFA Recommends a number of measures that, if introduced, could further support climate action -
• Existing regulations are somewhat restrictive in terms of maximising the generation of renewable energy sources. Farmers who receive grant-aid to support installation of renewable energy sources should be allowed to sell any surplus electricity generated after domestic/business consumption, in full, onto the national grid and receive an income for same (in arrears if required).
• Farmers who generate surplus electricity be allowed export it onto the national grid via smart meter and then be allowed the same amount as an offset back to them as required with no financial transaction necessary.
• In order to promote and encourage the adoption of microgeneration on Irish farms IFA propose the establishment of capital grants of approximately 50% for farmers to invest in microgeneration. This will require a new financial support programme for microgeneration with a separate structure and set of rules.
This money should come from outside of CAP Pillar II funds. This programme should apply to all usage on farms including the farm residence, and should not be capped at 11KW.
• The delivery of a meaningful ‘Feed in Tariff' with no limits on export volume to grid. • Remove planning impediments for microgeneration projects. • The establishment of a new ‘Roof-Top Solar Scheme' and a new ‘Anaerobic Digestion Support Scheme', financed by the Department of Environment, Climate & Communications and independent of TAMS, to support increased investment in renewable energy sources.
• Farm equipment, which contributes to increased emission efficiency, such as LESS equipment or capital investment in developing bioeconomy supply chains, should qualify for accelerated capital allowances. • All farm equipment (incl solar) that contributes to a reduction in emission intensity, should also be exempt from VAT.
• Farmers have a critical role to play in achieving the afforestation targets, however the current policy and supports are not working for farmers. The afforestation figures, farmers only planted 360ha or 18% of 2021 programme, show that they are no longer willing to commit land to forestry
Successive policy decisions including the cutting of forest premiums, restrictions on planting productive land, unwarranted retrospective recoupment of premium payments, increased environmental requirement that have reduced commerciality, inadequate compensation for farmers with ash dieback, increased management costs and the ongoing delays getting a forest licence, have undermined confidence.
. New measures are needed to reverse the decline in afforestation, while ensuring a balanced regional spread of forestry is achieved.
Measures to improve on-farm efficiencies
• Funding to expand and develop the IFA Smart Farming Programme, as recommended in the Joint Oireachtas Climate Action Committee Report Climate Change A Cross-Party Consensus for Action March 2019.
• Funding to introduce a Sustainable Development Programme (SDP) to co-ordinate the delivery of price supports for farm-scale and community-based renewables and to ensure the maximum delivery of the Teagasc Marginal Abatement Cost Curve (MACC) climate roadmap.
• The introduction of a protected urea incentive scheme, reducing the price differential below it and existing products to encourage increased adoption
• A support scheme should be put in place to encourage slurry additives uptake.
• Improved Animal Health and Performance measures such as supporting more targeted use of antibiotics and antiparasitics
• Scheme to fully genotype existing dairy herd, focused on animal health and welfare, production efficiency; methane efficiency, and market suitability of all off-spring
To highlight the diminished Services in Rural Areas
The diminished level of competition, and indeed traditional service provision, in Ireland's banking sector continues to be eroded, and is a particular cause of concern. Closure, and/or loss of personal service in many ‘operating' Banks, represents yet another dent to the social fabric of many rural towns/villages serving also a significant inconvenience, cost and financial risk to its many businesses and inhabitants.
Many are now faced with the new reality of being without 24/7 access to cash with the withdrawal of ATMs; forced to travel significant distances (even across country boundaries) of wait on hold for hours on dedicated phone lines (often times passed to multiple persons) to conduct day-to-day business transactions.
- Access to farm finance and working capital is paramount for farmers across all the enterprises and it is vitally important that farmers have easy access to sufficient low-cost funding to allow their businesses to trade efficiently.
- Increased access and availability of high-speed Broadband is fundamental to preserve enterprise and trade in rural Ireland, amplified during Covid-19 times. Its availability, where matched with adequate services, may also limit rural de-population and incentivise both residents and enterprise back into rural communities.
- Strategic national investments and partnership arrangements, spanning health, education, enterprise etc within rural areas is also essential to promote more balanced rural development.