Jimmy Deenihan
Question:95 Mr. Deenihan asked the Minister for Agriculture and Food his proposals to facilitate long-term land leasing; and if he will make a statement on the matter. [20182/04]
View answerTuesday, 6 July 2004
Questions (62)
Oral answers (5 contributions)
The rapid economic growth since the early 1990s and the small amount of land for sale have contributed to significant increases in the price of land. Non-farmers competing with farmers for the limited amount of agricultural land that becomes available can make the cost prohibitive for many farmers. Land sales are at an exceptionally low level — less than 0.2% of agriculture area — and leasing is the only alternative for farmers wishing to develop the necessary scale for improved viability.
In November 2003 I made a submission to my colleague, the Minister for Finance, seeking an extension of the rental income exemption for long-term leases then available only to farmers over 55 years. On budget day 2004 the Minister for Finance announced that the age limit for qualifying lessors was being reduced from 55 to 40 years and the annual exemption thresholds were being increased from €5,079 to €7,500 for leases of five to seven years, and from €7,618 to €10,000 for leases of seven years or more. These changes were made effective from 1 January 2004.
Is the Minister aware that there are approximately 30,000 farmers aged 66 or over who receive non-contributory pensions? Would he agree that penalising them if they lease their land, by reducing their pensions, is a disincentive to them? Will he examine the social welfare code and the possibility of a greater exemption for people on non-contributory pensions and other social welfare payments?
An exemption introduced in the 1990s for REPS was a major incentive to encourage people in the west of Ireland in particular to enter that scheme. More land is available for leasing and will come up because of de-coupling but there are too few incentives to take it up. Will the Minister consider lowering the age limit of 40 years to 30 years to encourage and enable young farmers to lease land?
I agree that farmers are constrained if they must buy farmland. The recent budget reduction of the age limit and the increase in the tax exemption for leasing land were welcome moves. I will discuss the matter of the non-contributory payments with the Minister for Social and Family Affairs because I sympathise with people receiving these payments. It was the system for many years when there was no PRSI. In the past seven or eight years people have made RSI payments and are entitled to a full contributory pension. Those caught in the previous system are on a low threshold when the pension is reduced. I would like that to be taken into account. Although it is not my direct responsibility I will discuss it with the Minister for Social and Family Affairs.
The price of land is prohibitive. Most people agree that income from general farming would scarcely meet the repayments on the cost of land. Nevertheless a difficult hilly farm in West Cork, with approximately 62 acres of arable land, sold a couple of weeks ago for €1.3 million to a local farmer. One needs only read today's Farming Independent to see similar stories.
Was it Paddy Sheehan?
I could not advise any farmer on this because he or she would get a very poor return on the outlay as only 0.2% of land becomes available at any time, making it a very restricted market. The vendors do extremely well. I met the farmer who said that selling the farm was the first bit of ease he had got and he can look forward to a decent lifestyle in retirement.