CAT should be applied to transfers of businesses and farms.

Nermal

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How many family farms could generate the cash to pay CAT? I'd say very few could so I stand by my "nearly all".
If CAT is applied at the full rate then within a few decades most farms will be owned by corporations and there will be far fewer family businesses. Is that what we want?

I don't 'want' it, but I don't really care if it happens. I don't see why the tax system should artifically prop them up.
 

NoRegretsCoyote

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Try running your small part-time farm as you would a hobby in the true sense of the word and you'll soon find yourself in non-compliance with a full battery of regulations and therefore no longer eligible for your subsidy payment.
There are lots of regulations around being a rally car driver or keeping a horse. They are still hobbies!
 

T McGibney

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Any economic activity that would evaporate without 2/3 public subsidy of its costs is a hobby.
By your definition, the building of a road or bridge, the planting of a forest, or the running of a hospital would qualify as a hobby. That makes no sense.
 
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_OkGo_

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Wow, what a deeply misguided understanding of agriculture you have and as @T McGibney said, there are so many sweeping generalisations in your comments that its hard hard to know where to start.

Non-dairy cattle farming is not very labour intensive and you can combine it quite easily with other work
You have clearly never set foot on a farm to hold this view. And for the majority of those smaller farmers, they don't combine it with other work by choice, it is by necessity. They are still putting in at least 20+ hours a week into their "hobby". How dare they try to earn some extra income to support their families.

By now the majority of farms in Ireland are part time and in effect it is a very well subsidised hobby.
As above, it is not a hobby, they earn extra income from it. Would you work overtime and then turn around to your company and say don't worry about paying me, I love what I do so I don't need to be paid. People are allowed to both enjoy what they do and make money from it.

You can look at CSO agricultural accounts. Farm output less non-labour inputs (net value added at basic prices) is in most years less than the income from subsidies. When you take out paid help farmers make about twice as much in subsidies as they do in profits on their farm activity.
This is a classic case of quoting an irrelevant statistic to validate an illogical conclusion. The reality is that it is you (all of us) that benefits from those subsidies through very reasonable food prices. If the subsidies did not exist, the price of meat and dairy would need to double/triple to make it economically viable for farmers. Are food producers going to pay this and in turn will distributors and retail groceries stock shelves with products that have increased massively in price? Would restaurants and the hospitality sector be able to cope with these increases?

In many ways farming is more passive than active income.
As above, you've never set foot on any type of farm to hold this view. Maybe an accountants salary can be considered passive because they have the audacity to let Excel do their calculations??

Any economic activity that would evaporate without 2/3 public subsidy of its costs is a hobby.
It would not evaporate, you the consumer would pay the price through massive increases in the price of produce. And as a side note, pretty much every sector has some form of subsidy through a tax relief or direct provision. That's not to say that there aren't inefficiencies in the agriculture sector or that there aren't a few who play the system but it is not the black/white picture that you paint

I say all this as someone who worked on such a farm growing up and I now sit comfortably and a reasonably well paid in a large private sector company. I'm quiet happy to know with certainty what my income is at the end of each month. There is no chance that I would want to get home from work and face 2 hours of feeding/tending animals in the middle of winter on the hope that I turn a measly profit from it.

You might spare a thought for the passive hobbyist farmer as you settle in for a very reasonably priced steak sandwich takeaway on Friday night
 

NoRegretsCoyote

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And for the majority of those smaller farmers, they don't combine it with other work by choice, it is by necessity.
My point is that many would not put in such work if there were not so many subsidies on offer. Suppose there was a system where if you knit a jumper and sold it for €30 the state gave you €60 more - you would see a lot more people knitting, and existing knitters knitting more
This is a classic case of quoting an irrelevant statistic to validate an illogical conclusion.
It's a highly relevant and little-publicised statistic. It backs up my argument that a lot of farming is not commercially viable without subsidy.


As above, you've never set foot on any type of farm to hold this view. Maybe an accountants salary can be considered passive because they have the audacity to let Excel do their calculations??
Without farmland you can't farm, and you can make money renting farmland and not farming it at all yourself. Farming is of course a mix of active and passive income, but the land is doing at least as much of the work as the farmer is. In comparison accountant's MS Office license is a trivial share of their turnover.

If the subsidies did not exist, the price of meat and dairy would need to double/triple to make it economically viable for farmers.
Perhaps, but without huge impact on the Irish consumer. It's not very hard to import food of any type - when was the last Irish-grown pineapple you ate?

There is no chance that I would want to get home from work and face 2 hours of feeding/tending animals in the middle of winter on the hope that I turn a measly profit from it.
And you would want it even less if there wasn't a subsidy cheque in the post either!

My overall point is the tax treatment of inheritance is very gentle, particularly when you consider the subsidy regime on top.
 

Purple

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It would not evaporate, you the consumer would pay the price through massive increases in the price of produce. And as a side note, pretty much every sector has some form of subsidy through a tax relief or direct provision. That's not to say that there aren't inefficiencies in the agriculture sector or that there aren't a few who play the system but it is not the black/white picture that you paint
While I agree with the thrust of what you are saying there's no way farming would exist in its current form without the EU handouts. We'd pay more but not proportionately as farming now is grossly inefficient. We'd have fewer much larger farms and, given the appalling track record of pollution from Irish farmers, it would probably be easier to regulate and control those fewer larger farms from an environmental and animal welfare perspective. More intensive farming is also better for the environment.
 

Purple

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It backs up my argument that a lot of farming is not commercially viable without subsidy.
Almost no farming done in Ireland is commercially viable without subsidy.
Think of the handouts as a way of slowing down increased urbanisation. There is a strong societal argument for subsidised farming. Unfortunately there is no environmental argument for it.
 

Purple

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This contradicts my own understanding on this. Would you care to expand on it?
This gives more details but water can be recycled, excrement can be processed into fuel, clean water and fertiliser and the land freed up can be used for trees (carbon farming) and re-wilding.
Vertical Framing used a fraction of the land and water of conventional farming and since crops can be produced in urban centres the transport, storage and refrigeration costs and environmental impact are greatly reduced.
 

T McGibney

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This gives more details but water can be recycled, excrement can be processed into fuel, clean water and fertiliser and the land freed up can be used for trees (carbon farming) and re-wilding.
Vertical Framing used a fraction of the land and water of conventional farming and since crops can be produced in urban centres the transport, storage and refrigeration costs and environmental impact are greatly reduced.
Urban centre (!) crop production is unlikely within our lifetimes to dislodge an agricultural sector that produced €8.2 billion in output in 2020. And, sorry, that Cambridge study looks to be pie-in-the-sky stuff, as your link admits.
 

_OkGo_

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My point is that many would not put in such work if there were not so many subsidies on offer. Suppose there was a system where if you knit a jumper and sold it for €30 the state gave you €60 more - you would see a lot more people knitting, and existing knitters knitting more

It's a highly relevant and little-publicised statistic. It backs up my argument that a lot of farming is not commercially viable without subsidy.
Ok, the knitting is irrelevant (it's not a €7B sector) and the €30/60 split is not in line with the breakdown of figures from the CSO. It is also not a vital sector upon which other industries are reliant

Yes it is not commercially viable without subsidy. But without the subsidy, there is no other alternative other than to increase the unit price of the output to compensate and end up at the same profit margin. Agri is literally/metaphorically the bottom of the food chain. The €5B of intermediate consumption supports a raft of highly skilled/paid professionals (eg. accountants, veterinary etc) and other businesses. Are they going to take the hit by reducing their fees to compensate the lack of subsidy? Or will the meat/dairy producers increase the price they pay so that gross output goes up €2B? Would they absorb the cost or pass it on to the consumer.

Perhaps, but without huge impact on the Irish consumer. It's not very hard to import food of any type - when was the last Irish-grown pineapple you ate?
Lets import all our food and produce nothing in agri then? The intermediate consumption disappears and the big food producers (eg. Kerry group) no longer need to be here? That's not a great result for the wider economy. Yes there are some foodstuffs that we don't produce and they are imported for consumer choice like your pineapple. That is not the same as saying we can entirely replace all the meat/dairy and crops that we can produce

And you would want it even less if there wasn't a subsidy cheque in the post either!
You've missed my point on this. In my cushy office job, I don't need to financially rely on additional income earned from part time farming. I enjoyed farming but it was never a hobby hence I won't rock up to some random farm and start helping out. My anecdotal experience is that those part time farmers are usually not as educated or skilled to have high paying jobs. Yes, you'll get the occasional 3rd level educated professional but the majority have lower paid full time jobs and rely heavily on the income generated from farming. It's not their hobby, its their income.

I have no ties to farming any more but I've always found it odd that there is this perception that farmers are sitting back collecting all these subsidies and laughing all the way to the bank. The overall subsidies need to be viewed more in line with things like R&D tax credits or corporate tax rates. The farmer may be the direct recipient of the payment but it supports several layers of industry well in excess of the €7B output. In much the same way, many multinationals are allowed to use R&D tax credits with a very loose definition of R&D. The state foregoes that income in order to support and encourage employment within the sector with an overall benefit to the economy

But we have digressed massively from the CAT discussion (sorry mods). Maybe strip out some of these posts to a separate thread?
 
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