Portugal’s farmers' confederation has welcomed the new edict that farmers with less than €1,670 annual income are exempt from registering with Social Security and from filing income tax returns.
The Minister of Agriculture, Assunçao Cristas, has announced that farmers with income or Common Agricultural Policy payments of under €1,670 a year will be exempt.
The president of the Confederation of Farmers of Portugal (CAP) Joao Machado commented, "We totally agree, because we have been negotiating this for ages and this has been achieved by negotiation between the ministries of Finance, Agriculture and Social Security."
The new registration scheme that requires all farmers with commercial activity to register with Finanças and Social Security, with VAT exemption for those with a turnover of under €10,000 a year, received harsh criticism from industry associations and farmers groups who warned of the negative effect of this new bureaucracy on the small-scale farming industry.
The Confederation boss may agree with this risible annual turnover benchmark but the National Confederation of Agriculture considers the €1,670 limit to be “a provocation to small farmers who are treated as indigent by the lady minister.”
"We maintain our fundamental claim which it to scrap these new tax rules." Said Joao Dinis, leader of the National Confederation who added that the ideal would be "back to the previous situation in the 2013 State Budget," i.e. to exempt all farmers with an annual income of under €10,000.
The Agricultural Minister is guilty of frequent extensions to her own rules, the last was the 4th taking registration deadline day to 1st April with the matter still not sensibly agreed and legislated for. She has promised to change and simplify the registration requirements and make it easy for small-scale farmers to continue in business, however limited.
The government also created a working group that is suppoed to be studying a way to simplify the 'guia de transporte' system for farmers which also became mandatory last year. Currently a farmer transporting produce to market has to list each category of product and accurately note the number or weight of each. The working group has achieved little of note and certainly has not produced a solution to a situation that delights the GNR whose glee in fining white farm vans has been noted across the nation.
The Minister’s goal, in her own words, is “to simplify billing for small farmers and small producers that locally market their products in local markets.” In this she he has failed.
This is not a minor problem as small-scale farmers account for 80% of the agricultural labour force with notable numbers in the northern and central regions of the country.
Socialist MP Miguel Freitas has spotted that the minister’s latest €1,670 limit is pretty useless, adding that "thousands of farmers are abandoning their activity as a result of these new reporting obligations and the associated bureaucracy.”
"In 2013 there were 52,800 jobs destroyed in agriculture, many of them due to the new tax regime for small farmers that the Government has failed to simplify."
Now, according to the MP, "any small farmer who received more than €150 per month" is required to enroll in Finanças.
This is a rare mistake from Cristas whose sector generally is doing well with a record EC grant income and an export boom in agricultural pruduce.
The government is often criticised for being a starry-eyed friend to big business interests, ignoring collateral damage in its policy making. The current situation will force many small farmers simply to give up and grow food only for themselves and neighbours. Those shoppers expecting a seasonal range of fresh produce at the nation’s markets soon will have less choice and the supermarket chains will pick up the slack.
