Submissions highlight benchmarking concerns, writes Sean MacConnell, Agriculture Correspondent

As the economy looks set to move from boom to gloom, the agriculture sector is even more defensive than usual prior to this year's Budget. The farm organisations have already submitted shopping lists as long as the proverbial arm to Mr McCreevy looking for the usual leg up.

There is a common theme in all the submissions and that is that benchmarking will be destructive not only to the Irish economy, but to farmers as well. This view was best expressed by the largest farm organisation, the Irish Farmers' Association, which believes that benchmarking would result in higher taxation, higher inflation and an "unjustified transfer of income to the sheltered public sector from the exposed private sector".

One can imagine how well this has been received by the civil servants in the Department of Agriculture & Food who this year will hand out well over €1.6 billion in cheques to Irish farmers. The IFA's submission said that the public service pay bill has already increased by 47 per cent in nominal terms in the past three years to 2002.

However, it said, in the same period, national farm income will have declined by 4 per cent in nominal terms. This figure is being hotly disputed by the Department of Agriculture which said farm income has increased by 27 per cent over the years 2000 and 2001.

Both IFA and the other organisations have warned the Government not to increase the levels of taxation as this would render the economy uncompetitive. This demand would find general acceptance across the rest of the sectors.

While most PAYE workers find what the farm organisations say to be irritating in the extreme and believe that farming is probably the most sheltered sector in Irish society, there are some genuine problems which Mr McCreevy should address.

A large number of farmers, perhaps up to 30,000, have a weekly income of less than €200 and there is very little likelihood that their income will increase. It has been a poor year in farming with low prices for most of the commodities, particularly beef and cereals. The summer weather was foul and there is likely to be shortfall in forage later this winter. There is also the looming difficulty that Irish farmers must become more competitive or be wiped out as they come under increased competition from an enlarged EU and from outside with more liberal trading in agricultural produce expected in the next round of the world trade talks.

For the commercial farmers, the job of making themselves competitive has to start now and their greatest difficulty is how to increase productivity and still comply with increasingly more rigid EU environmental regulations. The EU Nitrates Directive, which we should have introduced years ago, has to be put in place this year and this will mean a huge investment on Irish farms of at least €1 billion over the next three years.

Farmers want to raise the income thresholds for participation in schemes such as the Rural Environment Protection Scheme and the Farm Waste Management Scheme. They want to reduce the amount of matching funds they contribute. An increase in farm pollution tax allowances would benefit not only the farmers but the environment as well and would, without doubt, be a good move.

So too would be increases in the Installation Aid which has become an essential measure in helping young farmers get into farming. This is vital because far too many of our farmers are on the wrong side of 50. Farmers have to be very flexible in dealing with their business and in the absence of large amounts of land coming on the market - less than 1 per cent changes hands annually - there is a growing demand from the sector for greater tax relief for the long term leasing of farmland. The farmers will be hoping that the current relief, which only applies to people over 55 years old, will be increased and the age limit abolished.

This would increase the amount of land which would become available to younger people and would provide a better income for older people who might release it and would be beneficial all round. The bottom line is that Ireland needs a vibrant agricultural base and while it is costing the Irish and European taxpayer a lot of money to keep it so, that is how it must be.