Budget 2022 and the Agricultural Sector

Budget 2022 and the Agricultural Sector

There has been a wide welcome in the agricultural sector of the continuation of stamp duty relief for young farmers in Budget 2022, however overall, the measures announced by Minister for Finance, Paschal Donohoe and Minister for Public Expenditure, Michael McGrath, have been somewhat underwhelming for the sector as a whole

“There was nothing ground-breaking in this year’s budget for the agri-food or agri-business sector. A lot of the schemes for agriculture got rolled over into 2022, which was expected,” says Ciara. “It’s good to see the general stock relief is there until 2024 and has been extended and the young trained farmers and farm partnership stock relief has been extended to December 2022, together with the Stamp Duty relief for young trained farmers as well,” she added.

“It was good to see the acknowledgement by both Minister Donohoe and Minister McGrath for the role that agriculture and farming families are playing in our economy and in this post-pandemic recovery. However, people will be disappointed to see that the flat-rate farmers’ (VAT) addition has decreased from 5.6% to 5.5% for 2022. Whereas this is revenue-generating for the exchequer – and they’ve estimated that that is going to raise revenue of €5.8 million – the opposite to that is, that it is a cost of €5.8 million to the various unregistered farmers who avail of it,” she added.

Agriculture and the climate agenda in Budget 2022

A total €9.5 billion euro is set to be generated from carbon taxes up to 2030, with €1.5 billion of this going towards investments to target decarbonisation in the agriculture sector over the period.

“In this budget, none of the revenue that is being raised from carbon tax is being allocated to the Department of Agriculture to assist with these schemes for decarbonisation for 2022,” she continued.

It’s noted that they will form part of a suite of programmes along with the new CAP (Common Agricultural Policy) and that they will be introduced and that they will commence in 2023, rather than 2022.

“However, despite this, the Results-Based Environment Agri Pilot Project – REAP will continue in 2022. The funding for this is going to come from the exchequer rather than being directly funded by carbon tax,” she concluded.

To discover how our dedicated Food, Drink & Agri-Business team can help your business, click here.

To read BDO’s full Budget 2022 commentary, click here.

Content adapted from Agriland Ireland.