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Budget 2018 - Building Competitiveness, New Opportunities and Protecting the Irish Agri-Food and Fisheries Sector in the face of Brexit Challenge

The Minister for Agriculture Food & Marine Michael Creed TD today (Tuesday) announced a major package of budget measures designed to help farmers, fishermen and food SME’s navigate the current challenges arising from Brexit and to advance the growth objectives of Food Wise 2025.

Speaking at the announcement of his Department’s budget details Minister Creed said;

“While these are challenging and uncertain times for the agri-food sector, the Government is determined to support our farm, fisheries and food enterprises to assist them to manage these difficulties and keep to the growth path agreed in Food Wise 2025.  

The provision of support for vulnerable farmers, fishermen and for investment, innovation and market development in a food sector challenged by the uncertainty surrounding Brexit is a key feature of this year’s budget.  The funding announced today will allow us to build on the work we have already done and to encourage the continued growth in our food exports which grew by 13% in the first half of 2017”.  

Detailing the measures for farmers, Minister Creed said;

“I am very pleased to confirm that the Programme for Partnership Government commitment to increase the Areas of Natural Constraint (ANC) scheme allocation for 2018 will be met.  This €25 million increase will provide direct financial support to farmers in the most marginal areas of the Country.  In total €626 million is to be invested in the rural economy, direct to farmers, through the RDP schemes, with increases in funding being made available to ANC’s (€25million) and the Targeted Agriculture Measures Scheme (TAMS) (€20 million) specifically.

Following on from the very positive reaction by farmers to the Agriculture Cashflow Support Loan Scheme, which proved that significant demand exists for low-cost flexible finance, €25 million has been provided in my Department’s estimates to facilitate the development of a new Brexit response loan schemes for farmers, fishermen and food businesses in 2018”. 

Referring to the taxations measure announced in the budget, Minister Creed said;

“I welcome the taxation measures announced today, which I sought in my annual agri-taxation Budget submission:

  • The renewal of Stamp Duty Consanguinity Relief on Transfers of Farmland, a hugely important relief to the agriculture sector which facilitates succession and the earlier inter-generational transfer of family farms. I also welcome the fact that the rate remains at 1%.
  • An important change to support environmental sustainability and promote renewable sources of energy, that where active farmers lease farm land for solar panel use, it will be considered as eligible for Agricultural Relief and Retirement Relief.
  • The continuation of measures to promote and support entrepreneurship, as evidenced by the increase in the Earned Income Tax Credit by €200 to €1,150. Most farmers, foresters, fishermen and small food processors are self-employed and will see their tax liability fall with the increase in the tax credit. I also welcome the new “Keep initiative” to help small employers retain key employees.

My Department and I will continue to work closely with Minster Donohoe and his Department on taxation issues, including continuing our engagement on exploring further taxation measures for income stabilisation where we shall keep a range of options under review.”

Commenting on measures contained in the budget targeted at enhancing the competitiveness of the agri-food sector in order to mitigate the potential negative impacts of Brexit such as currency volatility, the Minister said: 

“Ensuring that our food exporters, particularly our SME’s are competitive from a cost perspective, in the International market place is a basic element of how we will meet the challenges posed by Brexit.  Therefore, building on the success of the low cost agri loan fund I announced in Budget 2017, my Department in conjunction with the Department of Business, Enterprise & Innovation has secured Budget funding for a new €300 million Brexit Loan Scheme to be delivered by the SBCI (Strategic Banking Corporation of Ireland) through commercial lenders. This scheme will provide affordable, flexible financing to Irish businesses impacted by Brexit. Given the agri-food sector’s unique exposure to the UK market, my Department’s funding for this scheme ensures that at least 40% of the fund will be available to food businesses. 

Furthermore I am allocating €5 million for the provision of grant aid to companies to carry out investment in the areas of improved efficiency and enhanced productivity.”

Referring to measures in Budget 2018 directed at  building new market opportunities abroad, particularly for food exporters with a significant exposure to the UK market the Minister said;

“Having consulted extensively with all key stakeholders over the past year, my Department, and its agencies have identified the key investment priorities to help the Irish agri-food & fisheries sector meet the challenges presented by Brexit.  In light of the specific vulnerability of the seafood sector to Brexit, €40.5M will be allocated to the continued rollout of the Seafood Development programme to support fishermen and seafood processors in the coming year, in addition to broader measures targeting food businesses across the board.

“Since the Brexit decision, my Department has placed great emphasis on enhancing its own capacity and that of Bord Bia’s in the area of market diversification and new market access.  Following on from the extra €10 million that I have allocated to Bord Bia since the Brexit vote, I am putting forward another €4.5 million in 2018 to assist the agency in its promotional and developmental work overseas.  Furthermore my Department is working with the Department of An Taoiseach and other Government Departments on the expansion of the State’s Global footprint, to ensure that the future development of the Irish agri-food sector is incorporated in this strategy. 

In the areas of innovation, research and new product development I propose to allocate an investment of €5 m to fund research and innovation in the Prepared Consumer Foods Sector. This critically important sector, which is responsible for exports valued at more than €2 billion, is particularly challenged by Brexit.   My department, working with the sector and with State Agencies, will use this funding to invest in capital equipment to support innovation in the sector. 

Later this week, I will announce the establishment of a National Food Innovation Hub – a facility which will provide the appropriate intellectual, technical and architectural environment where research, innovation and diversification in food, necessary to address the Brexit challenge, can flourish.”

Speaking at the conclusion of his Budget announcement, Minister Creed said,

“The Exchequer contribution to the expenditure of my Department will amount to €1,556 million in 2018; €1,284 million in current expenditure and €272 million in capital expenditure.  A further €1.2bn EU funding for the basic payment will bring total investment to €2,756 million in 2018. This Budget marks another strong response to the market difficulties being experienced in several sectors arising from on-going currency fluctuations and uncertainties over Brexit.

I am confident that I have secured the funding necessary for the continued development of the Irish agri-food and marine sector in line with the strategy outlined in Food Wise 2025 and in meeting the challenges and opportunities that lie ahead.”

Initial Publication Date: 
Tuesday, 10 October, 2017