Irish Farmers' Association (IFA) president Francie Gorman has said that the organisation hopes that the budget announcement on carbon tax will be the Government’s “first turn in a three-point turn on carbon tax”.

On Tuesday, Tánaiste Simon Harris announced that carbon tax on kerosene and natural gas will be reduced to the 2023 rate of €48.50 per tonne of CO2 in Budget 2027 and carbon tax increases will remain suspended in the lifetime of the current Government.

“Our view is that the carbon tax should be removed, but today’s announcement is a recognition that it is an issue [with carbon tax] for rural Ireland in particular,” the president stated.

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The IFA welcomed measures including the increase in the flat rate addition for non-VAT registered farmers, the extension of the fuel rebate scheme and the top-up of the fertiliser support scheme, which the organisation said “must be paid out as a matter of urgency”.

The increase in the flat rate addition for non-VAT registered farmers from 4.5% to 4.8% will bring it in line with the livestock rate and this will be worth €30m to farmers in 2027, the IFA noted.

Concerns

However, the IFA raised concerns that the cost of doing business is continuing to escalate at farm level and more will need to be done to address this.

The IFA president highlighted that there was no significant change in the total funding allocated to farming in this year’s budget.

“The budget for the Department of Agriculture, Food and the Marine remains broadly similar to 2026 at €2.3bn, which is disappointing in the context of a 6% increase in overall Government spending,” Gorman highlighted.

“On the expenditure side, there is an increase in funding for some schemes, but our concern is that there may not be enough to avoid linear cuts to individual farmer payments, particularly in our most vulnerable sectors.

“We will be taking this up with the Minister for Agriculture, as any cuts must be avoided.”

The increase in the TB valuation ceilings by €500 per animal will only help address the issue of TB to some extent, Gorman explained.

Modest improvements

IFA farm business chair Bill O’Keeffe said overall the budget will see modest improvements in what people have in their pockets, with income tax cuts helping farm households that are struggling to cope with rising bills.

O’Keefe highlighted that the IFA had sought the VAT on all non-oral vaccines to be reduced from 23% to 0%. However, the Government has brought it down to 9% for respiratory vaccines only.

“On the inheritance threshold, the increase of €20,000 to €420,000 is well short of what was needed to cover valuation inflation in recent years,” he stated.