Speaking at the launch in Plunkett House, Dublin, ICOS president, Martin Keane called on “all political parties and general election candidates to seriously consider the ICOS proposal, which is straightforward, practical and workable.”
Known as the ICOS “5-5-5” Income Stability Tool, the measure includes three components:
•5 year income averaging: The scheme should be open to farmers participating in the 5 year income averaging scheme already in place
•5% of annual milk receipts: The scheme will permit a farmer to voluntarily defer up to 5% of their milk receipts in any one year
•5 year draw down period: The scheme will allow the deferred funds to be drawn down at any time within a maximum of 5 years, and subject to income tax at the time of draw down
Government action urged
Keane said, “The range and frequency of income volatility affecting dairy farmers is unprecedented in recent years. Action is urgently needed by the next Government and we need to think outside the box in order to put in place a suite of measures to help dairy farmers to manage volatility.
“ICOS strongly believes that we have developed a workable and straightforward agri-taxation measure that will help farmers, especially during years of low milk prices. We have devised the “5-5-5” scheme in order to comply with EU state aid rules and we urge the incoming Government to address this matter in the programme for government and budget 2017.”
ICOS dairy committee chairman, Jerry Long, added, “It is deeply frustrating to experience another damaging market downturn without appropriate agri-taxation measures in place to help dairy farmers."
More measures needed
Long said that the 5-5-5 scheme would allow dairy farmers to defer an amount of income into a recognized fund to draw from during periods of low milk prices.
Keane added that the proposal was just one of a number of measures needed to address dairy market volatility.
“Dairy processors are investing heavily in research and development in order to move the industry out of the most volatile commodity markets, focused on developing new routes to markets, committed to helping their suppliers to improve on-farm efficiency and are dedicated to the roll out of fixed price schemes,” he said.