RENUA Ireland plans to cushion farmers against the impact of booms followed by busts in areas of the agriculture industry by creating a price volatility fund.
Billy Timmins Wicklow & East Carlow TD stated today, “An ongoing challenge facing all producers in the agricultural sector is the serious volatility in commodity prices.
It is a significant financial burden and greatly hinders long term planning.
At present, this is very evident in the dairy sector, where the welcome end to the quota regime and the resulting increase in milk production has to some extent been offset by ongoing downward trend in milk prices.
We are proposing a Price Volatility Fund to help all producers deal with this ongoing issue.
Such a fund, similar to the Marginal Protection Programme of the United States or the UK Deficiency Payment Scheme of the 1950s and 1960s, would provide income certainty at times of significant price challenges across the industry.
Producers would be allowed to invest some of their profits tax free at times of high income receipts, and taxation would only apply once withdrawals were made from the fund.
In effect by choosing to enter such a fund farmers will insure themselves against volatile commodity prices and enable themselves to average out their income over time thus avoiding the current dangerous peaks and troughs in income.
Farmers are as vulnerable as any other sector to the economics of boom and bust.
It is past time the state intervened prior to a crisis rather than after it.”