Budget 2023 has allocated €2.14bn in funding for the Department of Agriculture, Food and the Marine (Department). This allocation is an increase of €283m on Budget 2022 and the highest level of funding ever recorded for the Department.

Key budget 2023 Measures

Arising from Budget 2023, the key supports for the agri-business sector include:

• Funding of more than €218m for agri-environment schemes including the Agri-Climate Rural Environment Scheme (ACRES) which will support up to 50,000 farmers in adopting farming practices which protect biodiversity and the environment.
• Over €100m in targeted beef and sheep supports to improve competitiveness and sustainability, alleviate increased input costs, and protect animal health and welfare.
• Up to €30m for a fodder support scheme and the continuation of the €10m Tillage Incentive Scheme.
• Supports for high fertiliser prices through grant aid schemes for Multi-Species Sward/Red Clover and a new €8m grant aid scheme to support the spreading of lime.
• Increased funding of €37m for the Organic Farming Scheme, marking an 80% increase from 2022 and allowing for the re-opening of the scheme for new participants.
• An increase in the Targeted Agricultural Modernisation Scheme (TAMS) to €90m to fund proposed investment in on-farm renewables for farmers (subject to European Commission approval). If approved, this will support a proposed increase to a 60% grant rate for solar panels and a standalone investment ceiling of €90,000 for solar installation. As an immediate step, farm dwellings are now eligible for solar panel investments as a cost-of-living measure.
• A €13.3m extension of funding for the Farm Environmental Scheme and continued funding for the Soil Sampling Scheme for another year.
• Increased resources and a dedicated budget of €2.5m for farm safety initiatives together with an increased budget of €20m for research and innovation projects, and increased funding for state agencies such as Teagasc to promote sustainable farming practices.
• A targeted budget of €12m over the next four years for a farm-based anaerobic digestion sector in Ireland. 
• More broadly, the Business Energy Support Scheme will address energy price increases for food businesses, including farmers, which will allow for payments toward electricity costs of up to €10,000 per month.

Funding for CAP Strategic Plan 

A number of the above measures will fall within the impending CAP Strategic Plan (CSP), which commences in January 2023. Under its Budget 2023 allocation, the Department will assign almost €10 billion to the CSP. Over €500m of this sum will be directed specifically towards sustainability and environmental protection initiatives.

Agri-Taxation 

Budget 2023 also sees the extension of the following key agri-tax reliefs which were due to expire this year:

• The Young Trained Farmer Relief (extended until December 2024);
• The Farm Consolidation Stamp Duty Relief (extended until December 2024);
• The Farm Restructuring Capital Gains Tax Relief (extended until December 2024);
• The Young Trained Farmer Stock Relief (extended until December 2025); and
• The Registered Farm Partnership Stock Relief (extended until December 2025).

Additionally, there will be a new Accelerated Capital Allowance for better slurry storage and management to protect water quality and reduce dependence on chemical fertilisers. 

Whilst the carbon tax rate is set to increase from October 2022, €81 million generated from the carbon tax fund is to be provided to the Department, which will be used to finance the above-mentioned ACRES scheme. 

More broadly, the existing excise reductions for fuel, and the 9% VAT rate for electricity and gas will be extended until 28 February 2023.

Conclusion

Budget 2023 introduces critical supports for the agri-business sector. These measures recognise the myriad of challenges presently confronting the industry, including spiralling energy costs and costs of production, together with the increasing demands of sustainable farming practices and environmental protection legislation.

For further information on how Budget 2023 impacts your business, contact Colette Brady, Ciarán Herlihy, Elaine Morrissey or your usual William Fry contact.

Contributed by Florence Meagher, Anna Lee Dowling