The leader of the National Confederation of Agriculture, João Dinis, fears that many of the Algarve’s farmers will join farmers across the country and simply stop farming due to new legislation with compliance insisted on by Finanças and the Social Security department.
Dinis demands a specific tax status for those cases where farm income is low. The cost and complexity of regulation means otherwise that farmers will give up and production will cease.
When these rules start, and farmers with commercial activity must declare the beginning of their activity, João Dinis estimates that only about 10,000 farmers in the country will have complied, leaving at least as many again who have not.
"Thousands of farmers will be forced to stop producing or will have to dodge the system and will be subject to sanctions," said Dinis, demanding the annulment of the current legislation and the establishment of a working party to create a status of ‘small farmer’ acceptable to the IRS and Social Security departments.
The goal, said Dinis, is to create a more transparent and simplified system where contributions are worked out according to actual income.
Under the legislation that come into force next April, all farmers are required to have registered at Finanças and will be subject to a VAT regime if they have an annual income exceeding €10,000.
The leader of the ANC argues that the procedures are too complex for many, noting that among the farmers of small family farms, "many can not account for VAT because they have no organised accounting," many are unable to read and according to Dinis, farmers already are being pressurised into adhering to the new rules as buyers and cooperatives can only legally buy produce if there is a proper invoice.
Dinis estimates that between 10,000 and 15,000 farmers nationally have yet to register and many have no intention of doing so, “many of those will wind up their activity due to tax and contributions regulations and bureaucratic complications. Some are already receiving letters because they have to make payments to Social Security and are panicking" said the ANC leader.
João Dinis also criticised taxes as being the only measure that the Agriculture Ministry had taken into account for farmers of small and medium sized businesses.
In the face of the ministry of agriculture celebrating increased production and a rise in jobs in the sector, soon small farms across the Algarve may lie fallow due to an inflexible system that punished rather than rewards. The social cost of regulation again has been ingnored and the broad brush, 'one size fits all' approach to regulation from Lisbon will leave many able and happy farmers, sitting indoors and wondering what sort of system it is that lets weeds grow where once crops flourished.
