Budget 2025 was widely anticipated to focus heavily on sharing the spoils of Ireland’s burgeoning public finance surplus. Increases in public spending and tax giveaways were the overriding theme, and the rural economy certainly wasn’t overlooked.
One of the headline takeaways was an additional €158 million for the Department for Agriculture, Food and the Marine’s budget allocation, an increase of 8.1% from 2024, to be pumped into farm subsidies, animal health, water quality improvement and other sustainability schemes. €85m has been ringfenced for brand new initiatives.
But what are the details behind the numbers and what difference will they make to rural communities?
The government’s economic policy as it relates to the farming and agricultural sector is focused on three areas – making work and business in the rural economy pay (including alleviating poverty), stimulating growth and managing the transition to more sustainable practices. Let’s look at the key takeaways from the Budget for each of these in turn.
Raising income in the rural economy
Tariffs on a long list of farm support schemes have increased, including boosts to the per-animal rates for beef, dairy and sheep, and €30m in support for the tillage sector, with subsidies increased to €100 per hectare.
As well as general personal tax giveaways which include uplifts in most Income Tax credits and a €2,000 increase in the standard rate band upper threshold, the Budget contained a number of announcements on farming-specific tax reliefs, though details on many are still to be announced. Stock reliefs have been extended to 2027, and the VAT Flat Rate refund for non-registered farmers will increase from 4.8% to 5.1% From January 1st 2025.
The Budget also sees the creation of a new ‘Forgotten Farmers’ fund, initially worth €5m. This is to assist an estimated 3,500 farmers who missed out on CAP funding in the wake of the 2008 recession.
Stimulating growth
The Budget commits €320m to a capital programme that includes additional funding for the Targeted Agriculture Mechanisation Scheme (TAMS), forestry, food processing and €21.6m to back investments in research and development in rural and agri-businessses.
In addition, €212m has been earmarked for rural development as part of the Our Rural Future five-year strategy, which is entering its final year. A new round of calls for bids under the European Innovation Partnership scheme has also opened, with €36m available.
Sustainable farming
Another €60m has been allocated to the Agri-Climate Rural Environment Scheme (ACRES), raising funding for 2025 to €260m. The government’s flagship agri-environment scheme aims to provide financial support to farmers and land owners for making the transition to more sustainable practices by targeting funding at approved land-based and agricultural practices.
An additional €10m has been promised to support organic farming, bringing the total budget in 2025 to €67m. €6m is to be invested in a new soil sampling scheme, and subject to European Commission approval, the government is seeking to build on the Nutrient Importantion Storage Scheme (NISS) announced earlier this year with a new grant to help farmers to invest in nutrient storage on their farms.
€40m in capital funding will be committed to the development of the biomethane industry by 2027.
With the government backing up its vocal support for Irish farming with significant financial investment, it’s a good time for businesses in the rural sector to make plans for future growth.
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Get in touch with our dedicated team of agri-business finance specialists to discuss what the Budget could mean for you in 2025 and beyond.
