Why VAT should be a tax on luxury items, not products vital to animal production

All suggest that food prices must rise — that’s what we farmers have been asking for for years — but that only goes so far.

Over the years we have been advised to increase our efficiency, but again this can only go so far as to reduce costs.

middle man

So where can we still reduce costs? I’m a big fan of cutting out the middleman.

I went through some bills the other day. Most of these were related to livestock, vaccines and dosing products. Most were priced similarly to last year, maybe 5-10 pieces up, which was fair enough.

My big problem was VAT. I just don’t think there’s a need for that 23 percent tax. In my opinion the answer is no.

Some products are exempt from VAT — such as groceries and children’s clothing, but also animal feed.

In recent years we have been advised to reduce the use of antibiotics — for our livestock and for ourselves.

The World Health Organization says antibiotic resistance is one of the greatest threats to global health and food security.

A growing number of diseases and infections are becoming increasingly difficult to treat. Antibiotic resistance is accelerated by the overuse of antibiotics.

Our use of antibiotics at agricultural level is well below the EU average. We also know that modern agriculture would not work without the use of vaccines. So why tax them at this level, or at any level at all?

The use of vaccines curbs the widespread use of antibiotics.

Some might say just register the farm for VAT and reclaim it, but this is not an option for most farmers given the size of their business — they would end up paying VAT on their livestock.

Shouldn’t VAT be a tax on luxury items and not on products that are essential for animal production?

I understand that there have been calls in the past to reduce VAT on vaccines and dosages, but it seems that this needs to be ratified at European level.

But if ever there was a time to abolish VAT on these products, it is now, as food security and energy production are high on the European agenda.

Farmers in Ireland spend around €135 million a year on veterinary medicines, of which €40 million goes on vaccines. The abolition of VAT would mean a saving of almost 10 million euros.

This would encourage more immunization programs and improve national inventory across sectors.

VAT on agricultural diesel will also have to be examined. Here, too, tractor diesel is not a luxury — it is vital for planting, growing and harvesting crops at a time when the EU is trying to reduce its dependency on inputs.

The rise in oil prices will increase the cost of cutting silage. Whilst the VAT can be reclaimed by the larger contractor who is VAT registered, the smaller farmer who is not registered will have to bear the additional price of this last increase.

John Joyce farms at Carrigahorig, Nenagh, Co. Tipperary