Bord Snip cuts on Agriculture and the Rural Economy will cost more than savings made

BORD SNIP CUTS ON AGRICULTURE AND THE RURAL ECONOMY WILL COST GOVERNMENT MORE THAN ANY SAVINGS MADE – IFA STUDY

• Job losses of 12,000+

Drop in output of €430M+

• Extra burden on Social Welfare budget  €240m+

A detailed economic analysis of the McCarthy proposals carried out by IFA shows that the cuts will lead to job losses of 12,300, a drop in output of €430m and a greater burden on the Social Welfare budget than the savings made by An Bord Snip.

Mr Walshe said the proposed cuts will seriously undermine the positive contribution of agriculture to the rural economy, including a reduction in output for the agri-food sector, an increase in the number of farmers on Farm Assist, a reduction in the number of active farmers and an increase in rural unemployment.

Addressing the media at the Dublin Horse Show today, IFA President Padraig Walshe said the analysis underlined the misguided approach taken by the Government-appointed group. He said, “Our figures clearly show that increased unemployment in the rural economy, coupled with greater numbers applying for Farm Assist, will cost the Exchequer €240m in the form of increased Social Welfare payments. The cuts proposed by An Bord Snip will save the Exchequer just €204m, which is €36m less. The Government has to recognise the futility of the approach set out by Colm McCarthy’s Review Group and abandon the proposals.”

Padraig Walshe said, “this is a particularly difficult time for farm families as prices across all commodities are under pressure. Government support for the agri-food sector will be repaid by maintaining production and output, which in turn will help to increase exports and grow jobs.”

The livestock sector will be particularly impacted by the proposed cuts, where individual farmers are facing cuts of up to 40% in income, through the proposed cuts in REPS, Suckler Cow payments and Disadvantaged Areas. IFA estimates that 20,000 suckler herds will be lost.

In 2008, 75% of all REPS participants were in the drystock and sheep sectors and sheep farming is mainly undertaken in more remote areas of Ireland, highly dependent on the Disadvantaged Areas Payment.

The ewe population is currently 2.1 million. The proposed cuts could result in a reduction, over a period of a number of years, of up to 420,000 animals, or 20% of the national flock.

There are approximately 9,000 dairy farmers in REPS, or slightly below 50% of the total population of 19,000. It is estimated that 20% of Dairy REPS farmers could exit dairy farming, which would result in a reduction of 10% in the total number of Dairy farmers.

The IFA President said farmland in REPS provides a significant carbon sink, absorbing approximately 2.3 million tonnes of CO2e. REPS is of huge benefit to the rural economy, providing employment for farm suppliers of fencing materials and hedging, garden centres, planning consultants and other labour inputs.

With an average payment of €6,200, REPS is a significant support scheme, particularly in the West of Ireland. In Connaught alone, 34% of farmers (20,500) are in REPS.