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Land Value Tax on farms

It might seem to us that the greatest opposition to a land value tax in Ireland will come from the farmers.  But that might be a mistake.  Here is an article from Irish Farming .ie bemoaning the loss of the land Commission whose powers were used to redistribute land from the large, often absentee landowners (though not all by any means) to typically small, inevitably male, tenant farmers who just happened to vote for Fianna Fail.

“Subsidies create terrible problems for farming, but one of them is that they reduce the push factor to get people off the land. An elderly couple on 30 acres can eke out an existence on the single payment and the old-age pension, particularly since the break was made between production and payment. They don’t actually have to do anything to get the cheque. At the other end of the scale, a young farmer who perhaps inherited the few acres from his parents, is able to hang on to the land while supplementing his income from construction. Only half of Irish farmers describe it as their sole source of income. The disappearance of that safety net is just another reason for farmers to find themselves in a state of panic. We could wait for nature to take its course, but as long as the subsidies are there, the process will be slow – too slow for “professional” farmers who will go under while waiting for things to change. Agriculture has suffered from a proliferation of interference, but I wonder if there is a case for one last intervention. Whether or not one agrees with what happened in the past, I think we need a 21st century Land Commission. Just as big farmers were compelled to sell their land in the 20th century, should we consider forcing small ones to sell it back? That annual spend of €2 billion would buy a lot of land in just one year that could be redistributed to create efficient farms. The industry is dying, so isn’t it better to do some triage? Write one last cheque for the fatally wounded and focus on saving the rest.”

Irish now calls for a Land Commission to compulsory purchase small farms to give to potentially viable full time farmers.  We understand the motive but the method would be victim  to as much political shenanigans as the first incarnation of the Land Commission. Instead of compulsion, a modest land value tax set at say 10-20% of the rental yield of farmland, would encourage land owners to sell or get serious about the productive use of their land.

The system can be adjusted so that good farmers in every sense – especially in terms of the environment- will win out.  This reform should be accompanied by the abolition of income tax on farming profits  (not counting subsidies) which is hardly worth the effort of collection.

The entire structure of agriculture, from the price farmers are paid for their produce and what they pay out in costs, all adds up to a minus. Trinity College professor Alan Matthews has calculated that the only income that farm families had from their farm enterprises last year came from direct payments and these amount to almost €2 billion. Without these payments, farming families would starve.

This article heralds the first whiff of reality in the usual farmers poor mouth song, all be it one that manifestly looks to favour the strong farmer.  Could their historical political champion, Fine Gael be on the rise again…?

Posted in Money Systems, News.

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