Early retirement, please

28 September 2001

Early retirement, please

By Philip Clarke

Europe editor

LIKE most farm sectors in the developed world, Irish agriculture has a highly skewed age profile.

Roughly half the countrys farmers are over the age of 55, while just 10% are under 35. The reasons are not hard to fathom, with the rural young tempted away by the prospect of more money for less work in other parts of Irelands vibrant economy.

But such is the importance of food and farming to the Republic, that the government has launched an early retirement scheme and a new entrants scheme to correct this imbalance.

Early Retirement 2000, as it is known, replaces a previous scheme which operated in the late 1990s. That took 10,000 older farmers out of the sector, releasing some 300,000ha (741,000 acres) for the next generation.

"Early retirement is crucial to the restructuring of Irish farming, getting more land into the hands of younger farmers quicker," says John Enright, the Irish Creamery Milk Suppliers Associations senior policy executive.

More flexible

But while the retirement programme offers greater flexibility and a bit more money, uptake has been slow, with just over 500 applicants since it was launched a year ago. The authorities were expecting 7250 by 2006.

"Foot-and-mouth has had an impact, for sure," says Mr Enright. "It meant many farmers were not able to sell their livestock when they wanted to, so have decided to carry on another year before taking early retirement."

The ICSMA also believes the maximum payment of Ir£10,644/year is not high enough. "Its only a few hundred £s more than was being paid under the old scheme," says Mr Enright. "In real terms they are getting less, both because of inflation and the fact the punt is stronger."

Despite this, the ICMSA believes the new early retirement scheme will gather momentum and help reduce the average age of Irelands farmers.

And the new Installation Aid Scheme, which came into operation in February of this year, will have a crucial role to play in meeting this objective.

Available to any young farmer setting up between Jan 1 2000 and the end of 2006, it pays a one-off grant of Ir£7500 – up from the Ir£5600 under a previous scheme, which expired in August 1997.

Dublin anticipates that 3800 young farmers will join the six-year programme, though so far it has released no figures on the uptake.

While welcoming the initiative, the ICMSA believes the funds should also be available to farmers who set up after the old scheme expired. "I know one farmer who started in December 1999 and has missed out on Ir£7500 by just a few days," says Mr Enright.

He also believes that Ir£7500 is not high enough in a country where industrial wages are booming. It falls well short of the Ir£19,687 maximum allowed under EU law.

Setting an upper limit of 150 income units/year on eligibility is also unrealistic. That is equivalent to just 60,000 gallons (273,000 litres) of milk, or 45 cows. "Farms of this size need just as much help. They are the future of our dairy industry." &#42

Income unit conversions

1 cow over two years 1 unit

1 cow under two years 0.6 units

1 breeding sow 0.8 units

1 ewe 0.15 units

1818 litres milk quota 1 unit

1ha combinable crops 1 unit

1ha potatoes/sugar beet 1 unit

Non-farm income: Ir£200 1 unit

A farm with 20 dairy cows & 30ha of cereals has 50 income units/year.


&#8226 Early retirement

&#8226 Pays flat rate Ir£4255, plus Ir£226/ha up to 24ha or Ir£10,644/year.

&#8226 Pension paid up to the age of 70 for those who entered in 2000, falling to 66 from 2004.

&#8226 Land surrendered under the scheme must go to a younger farmer.

&#8226 The transferor must

&#8226 Be aged between 55 and 66.

&#8226 Farm at least 5ha of IACS registered land.

&#8226 Derive at least 25% of income from farming.

&#8226 Have farmed for at least 10 years.

&#8226 Cease all commercial farming.

&#8226 The transferee must

&#8226 Be aged between 18 and 45, falling to 40 by 2006.

&#8226 Have a non-farming income of less than 100 income units.

&#8226 Have three years experience and an agricultural qualification.

&#8226 Agree to farm the pension lands for at least five years.

&#8226 Have over 50 income units a year, 20 of which are from farming.

&#8226 Installation aid

&#8226 Pays a one-off grant of Ir£7500 to eligible farmers.

&#8226 Farmers must set up between Jan 1 2000 and Dec 31 2006.

&#8226 The applicant must

&#8226 Be aged between 18 and 35.

&#8226 Farm at least 5ha of land.

&#8226 Still have start-up costs to pay off.

&#8226 Apply to join the scheme within four months of setting up.

&#8226 Apply for payment within 30 months of setting up.

&#8226 Agree to farm for at least five years.

&#8226 Be set up on a holding with between 50 and 150 income units.

&#8226 Hold an agricultural qualification.

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