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Budget 2021: Everything Farmers Need to Know

€80m allocated for TAMS

While the TAMS II scheme was omitted from the main budget documents earlier on Wednesday, the Minister has said that he is “also providing €80m for TAMS to support investment on farms and the continuation of the scheme”.

COVID beef scheme and new weighing measures

Some new details have been revealed on the €45m COVID beef scheme.

There will be €40m for the Beef Sector Efficiency Pilot, which the Department has said will be based on the BEEP-S scheme.

The Department will also be “providing an additional €5m for a new calf weighing measure to support beef farmers rearing dairy calves”.

€17m for Sheep Welfare Scheme

Some €17m has been allocated to the Sheep Welfare Scheme for 2021.

Tillage and farm safety funding

Some €10m has been ring-fenced for the tillage sector in Budget 2021.

Minister McConalogue said he is “extremely conscious of the pressures on the tillage sector this year”. This €10m will come from an overall fund of €79m for “a number of pilot measures in the agri environment area”.

There will be “new initiatives” for farm safety funded from this €79m too.

Brexit funding for agriculture

Minister for Agriculture Charlie McConalogue has announced that the €3.4bn recovery fund to support sectors particularly affected by a no-deal Brexit and COVID-19 will be open to the agriculture sector.

How much will be available to the sector is unknown at this time.

What about TAMS?

Any details on Targeted Agricultural Modernisation Scheme (TAMS II) funding or a rollover of the scheme have been left out of Budget 2021.

The possible absence of a scheme in 2021 is likely to lead to a surge of applications before the closing date in 2021.

REPS scheme a step closer

News correspondent Barry Cassidy takes a look at the new REPS scheme in the context of the budget.

Some clarity on what the new REPS could look like has also been provided.

The new funds will be used to “create an innovative, results-based pilot scheme for farmers who improve the biodiversity and carbon management of their land”.

Farmers will be required to undertake specific actions to generate these results.

You can read more on REPS and the budget here.

Bog restoration and farm plan programme

The Department of Heritage has been allocated almost €96m in Budget 2021.

This is to be spent on an “expanded programme of peatlands restoration, biodiversity investment and conservation works”.

It will also be spent on expanding the National Parks and Wildlife Service’s Farm Plan Scheme (examples of schemes here include the Corncrake scheme) and “advanced conservation and restoration of protected natural heritage areas.”

National flood warning service

Met Éireann is to receive €13m in Budget 2021.

Met Éireann will establish a national flood forecasting and warning service and will update its existing weather radar infrastructure.

Rural broadband promise

Budget documents show an additional €132m capital allocation to the National Broadband Plan in 2021. This allocation will help to connect thousands of homes and businesses to high-speed fibre in 2021.

“Rural communities will no longer be left behind,” the Government document reads.

Brexit funding for Department and Bord Bia

An extra €25m in current expenditure has been allocated to the Department of Agriculture for extra staff and additional funding for Bord Bia in respect of Brexit.

Another €4m in capital expenditure is to be provided to the Department of Agriculture to provide for necessary Brexit infrastructure next year.

No change to pension age

There will be no change to the pension age in next year’s budget and it will remain at 66.

33% increase in funding for Organic Farming Scheme

Funding for the Organic Farming Scheme has been increased by 33% to allow it to be reopened for new entrants, according to Budget 2021 documents. The scheme last opened to new farmers at the end of 2018.

The scheme received €12m in Budget 2020, so an extra €4m is set to be added, taking total funding to €16m.

Approximately 1,500 farmers receive organic scheme payments valued just shy of €9m annually.

Ireland has one of the lowest levels of organic farming in the EU, with just 2% of land area under organic management practices compared with an EU average of 8%.

The EU’s Farm to Fork strategy sets a target of 25% of EU land under organic management by 2030.

€45m for ‘COVID-19 beef scheme’ to improve carbon efficiency

An additional €45m has been secured for next year to roll out a COVID-19 beef scheme that will be aimed at improving carbon efficiency on farms.

The scheme will be the successor to the BEEP-S scheme, which itself replaced the temporary BEEP scheme.

An allocation of €45m is similar in scale to BEEP-S and is the main provision in the budget to support beef farmers.

Details on the scheme will likely emerge in the coming days and weeks. However, it is clear the focus will be on the environment and emissions.

Increases in living alone and fuel allowances, children’s benefit

Minister Michael McGrath announced changes to the following schemes: Living alone allowance to increase by €5 to €19 per week.The fuel allowance is to increase by €3.50 per week to €28.Children’s benefit to increase by €5 for those over 12 years of age and by €2 for those under 12 years of age.

Retrofit schemes for older homes

Minister for Public Expenditure Michael McGrath has announced that €100m from carbon tax income will be allocated for increasing the energy efficiency of homes.

That’s an 82% increase and will allow for an expansion in the Warmer Home Scheme and new schemes that will help homeowners retrofit their homes up to a BER rating of B2.

This, the minister said, will help to reduce greenhouse gases and support thousands of jobs in the construction industry.

Food ombudsman gets the green light

One of the main measures to be implemented as part of the Department of Agriculture’s increased allocation is a new food ombudsman.

A national food ombudsman was a commitment in the programme for government and is set to police the relationship between primary producers and processors.

Department of Agriculture to receive an extra €179m

The Department of Agriculture is to receive an increased allocation of €179m on last year’s allocation. In total, the Department will have €1.8bn to spend in 2021.

Minister for Public Expenditure Michael McGrath said: “Supporting our farmers and our rural communities as they respond to COVID-19 and Brexit is an important policy objective for this Government.”

The extra funding will be for additional Brexit controls, a new food ombudsman and a range of agri-environmental pilot schemes.

Macra welcomes tax reliefs for young farmers

The extension of consanguinity and consolidation relief has been warmly welcomed by Macra na Feirme.

“These tax reliefs are essential to young farmers. Macra fought hard for the extension of these reliefs to deliver for young farmers,” said president Thomas Duffy.

Pilot REPS scheme a step closer

The Government will announce a range of new agri-environmental pilot schemes to be rolled out across 2021.

Documents seen by this newspaper show a total of €79m has been allocated to new agri-environmental and other farm support measures.

Increasing the level of environmental ambition has been a key touchpoint of Budget 2021.

The money will allow for the rollout of a much-touted pilot ‘REPS-style’ scheme.

With an extension secured for farmers already in GLAS, the funds will be used to introduce new environmental measures to support actions by farmers not currently in an agri-environmental scheme.

This means it is likely new entrants to farming since 2016, after GLAS was rolled out, and farmers whose AEOS contracts finished in 2018 will be first in line to take up the new measures.

Crucial schemes to be extended for 95,000 farmers

Budget documents seen by the Irish Farmers Journal show that the Government will extend farm schemes including GLAS, ANC, BDGP and the Sheep Welfare Scheme.

This was essential for farmers with no CAP budget in place for 2021 and a likely transition period of two years before one will be put in place.

Farmers had feared they would lose more than €215m in scheme payments from 31 December 2020. Farmers in GLAS alone are facing the loss of €150m when their contracts end in December.

€50m for third-level students

The Government has introduced a once-off hardship fund of €50m for all students affected by COVID-19.

This works out at about €250 per student. For students studying agriculture, veterinary and so forth at third-level, this is a measure worth noting.

Farmers’ flat rate VAT increase

The farmers’ flat rate of VAT is to increase from 5.4% to 5.6% from 1 January 2021, Minister Paschal Donohoe has said.

Stamp duty on farm consolidation

Minister Donohoe has renewed the relief on stamp duty, which allows farmers to pay a lower rate of 1% on land transactions for farm consolidation, for two years.

The 1% rate will be in place until the end of 2022 and that renewal date will coincide with the renewal date for Capital Gains Tax reliefs.


The price of a packet of cigarettes is up by 50c per pack. This will bring the price to €14 for cigarettes in the most popular price category.

Consanguinity to be renewed for three years

Minister for Finance Paschal Donohue has proposed to extend consanguinity relief, which had been due to expire at the end of the year, for a further three years to the end of 2023.

The relief applies to the transfer of farmland between certain blood relatives whereby the applicable rate of stamp duty is reduced from 6% to 1%.

Carbon tax increased

As expected, the carbon tax will increase by €7.50/t from midnight. This will increase the carbon tax to €33.50/t.

That will add 1.5c/l to a litre of diesel and just over €85 to the cost of filling a 900-litre tank of oil for the house.

It will add 1.937c/l to the cost of a litre of green diesel, bringing the total carbon tax on agri diesel to 8.97c/l.

If a typical tank fill is about 2,000l, the expected increase will cost a farmer €38 every time the tank is filled.

Earned income tax credit

The earned income tax credit for those who are self-employed is to be equalised with the PAYE credit, an increase of €150 to €1,650.

€17bn budget for 2021

There will be just under €18bn in the budget for 2021, with Paschal Donohoe stating the “impact of the budget will be felt in every household and business across the country”.

No-deal Brexit budget

Minister for Finance Paschal Donohoe says: “This year while we continue to prepare for Brexit, we are also now responding to first global pandemic in a century.”

He added that COVID-19 is an “invisible enemy” that has caused great suffering and disruption.

He said the budget is framed on the “basis of no bilateral trade deal between the EU and the UK” – a no-deal Brexit.

What farmers should watch out for

A budgetary allocation for REPS, potential extensions to schemes such as GLAS, TAMS and BDGP and the carbon tax are among the big-ticket items for farmers.

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Article from https://www.farmersjournal.ie/budget-2021-everything-farmers-need-to-know-576939

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