The launch of MilkFlex as a national product is another positive industry led initiative in the area of market volatility.
The key feature of MilkFlex is that it has inbuilt “triggers” that adjust loan repayments in line with movements in milk price and the seasonality of Irish milk production. The product, which was recognised by Cogeca at European level also brings much needed competition and innovation to the farm finance market.
Separately, the Minister for Finance and Public Expenditure, Paschal Donohoe TD and the Minister for Agriculture, Michael Creed TD has invited submissions before the end of May on agri taxation. The consultation was promised last year by Minister Donohoe and will concentrate primarily on the issue of income stabilisation.
The Food Wise strategy identifies price volatility as a specific threat to the agri food sector and recommends the development of measures to mitigate the risk of income volatility. In this context, ICOS strongly believes that a new measure is long overdue to stabilise income at farm level, which will allow farmers to use periodic high prices to sustain them in weaker markets. This approach is supported by the European Commission in its recently published communication on the future CAP, which has urged Member States to make provision in their taxation policies for income deferral/stabilisation tools.
ICOS has developed a very detailed proposal known as “555”, which is a voluntary scheme that would allow milk suppliers to defer not more than 5% of their annual income. The deferred income can be drawn down at any time within 5 years and subject to income tax at the time of draw down. The ICOS proposal is a tool that will support the family farm model and deserves the full backing of Ministers Donohoe and Creed.
By Eamonn Farrell
Agri-Food Policy Executive
18 Dec 2020
18 Dec 2020