€3.2 billion to support agriculture, fisheries and food in 2009

'Against the background of the deterioration in the public finances, my approach in preparing the 2009 estimates for my department was to focus available resources on the measures that allow us to maintain and grow the productive capacity of the agri-food sector,' said Minister for Agriculture, Brendan Smith, last week. Minister Smith pointed out that 'the headline figure for my Department (€1,803m) indicates a year-on-year reduction in spending of 11.8%. This gives a misleading impression because the 2008 allocation was increased recently by an additional €195m, which was provided for the Farm Waste Management Scheme. When this additional funding is excluded, the gross Estimate for the Department for 2009 is actually 2.6 per cent lower than that in the 2008 Forecast Outturn.' The minister highlighted the fact that, when combined with EU funding of €1.4bn, total expenditure by his department in support of the agriculture, fisheries and food sector will amount to over €3.2bn in 2009. Minister Smith said pointed out that the government had committed significant additional financial resources to areas such as the rural environment scheme where the rates of grant had been increased by 17 per cent, the new suckler cow scheme and the farm waste management scheme. Expenditure for that scheme in 2008 will exceed €375m following the provision of the additional €195m in recent weeks. REPS protected 'The choices I have made will enable the major developmental schemes to continue, and are intended to facilitate the continued strategic development of the agri-food sector. I have therefore chosen, for example, to protect the Rural Environment Protection Scheme (REPS), including the 17% increase in rates, and to ensure that it can continue to accommodate farmers wishing to join in 2009. This reflects the value I place on a scheme that meets environmental imperatives and consumer demands for environmentally friendly food production. Next year the provision for REPS will be increased to €355million. 'I have also ensured that the commitment entered into in Partnership to spend €250m on the suckler welfare scheme is fully honoured. The commitment to payment of a premium of €80 per animal in respect of the 2008 scheme will be honoured in full with €33m to be paid this year, and a further €44m provided in 2009 to pay the remaining 2008 scheme claims. The balance of the €250m - some €173m - will be paid to participating farmers over the remaining life of the Suckler Scheme. Savings Minister Smith said that he decided reluctantly to reduce expenditure under the scheme of Area-Based Compensatory payments. The provision for the scheme payments next year is reduced to €220.4m. He said the reduction will be implemented in a targeted manner in the main by reducing the maximum hectarage limit on which payments are made to 34 hectares and also by a small increase in the stocking density requirement. 'In reducing expenditure I have sought to target the payments and maintain the productive capacity of the sector. While overall expenditure will fall, I am confident that the majority of farmers will not suffer any reduction in their payments.' In relation to the Early Retirement and Young Farmer Installation Schemes, the minister said that the €56.7m provision will allow current commitments to be met but, for the present, new applications for these schemes are being suspended with immediate effect. However the minister specifically welcomed a number of farm tax measures that were renewed in Budget 2009. These are part of a number of schemes and reliefs that have been put in place in recent years to bring about improvements in land mobility that will, in turn improve productivity and efficiency. These particular reliefs include the renewal of stamp duty relief for four years until 31 December 2012 (worth an estimated €53m in a full year), the renewal of stamp duty relief for farm consolidation for two years from 1 July 2009 to 31 June 2011, the renewal of both the general and the young trained farmers rates of stock relief for a further two years (estimated cost to the Exchequer of €2m in a full year) and the extension of the accelerated capital allowance for necessary farm pollution control facilities from 31 December 2008 to the 31 December 2010 (worth estimated €10m in a full year). Stamp duty When combined these farm tax measures are estimated to be worth over €65m in a full year. The top rate of stamp duty on agricultural land transactions is being reduced from 9% to 6% on amounts over €80,000 with effect from 15th October. This should reduce the cost of agricultural land to purchasers and encourage higher number of transactions. All these measures help to improve land mobility, land swaps and higher environmental standards.' Minister Smith said that he had decided to reduce his Department"s contribution to the cost of the Fallen Animals" Scheme from €28m to €14m. Thus an adjustment of the burden sharing of this Scheme was now appropriate with the sectors involved taking a greater share of the costs. The reduced funding will be implemented through reduced rates under the scheme, which will be discussed with the various interests over the next few weeks. Forestry The 2009 Estimate provides €127.7m for the forestry sector, an increase of 6% over 2008. While over €80m will be directed to payments of premia, mostly to farmers, there will also be generous support for planting and support schemes. The level of funding provided should allow planting to be maintained close to this year"s level.