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. his is on top of €1.2 billion paid through the Basic Payments Scheme.
Regarding the agri-food sector generally, the Food Wise 2025 strategy contains recommendations aimed at improving value-added and productivity at farm and food industry level through a focus on sustainability, efficiency, knowledge transfer and innovation. Realising the ambitious growth projections set out in Food Wise will be challenging, particularly in the context of Brexit, but I am confident that the strong implementation process for the strategy, led by the High Level Implementation Committee which I chair, will deliver results.
Specifically on the cost of inputs, we will of course remain vigilant in the current market environment but the CSO's agricultural input price index decreased by 1.0% in August 2016 compared with July 2016 and decreased by 4.7% in the 12 months to the end of August.
