This week, the Department of Agriculture said it is considering an anaerobic digestion (AD) pilot project with funding from the National Development Plan.

While any acknowledgement of AD technology from the Department should be welcomed, the announcement caught many by surprise.

AD is a tried, tested and reliable technology which has been in operation in the EU on a large scale since the 1980s. In other words, we know how the technology works so the merits of funding a pilot project are questionable. What the industry really needs is support.

As Stephen Robb outlines in this week's edition, the proposed Renewable Heat Obligation will kick-start the market for renewable gas. Biomethane, produced from farm AD plants, will play a key role in fulfilling the obligation.

However, producing biomethane is expensive due to the high up-front capital expenditure costs involved with building a plant, which includes the tanks, feeding equipment, gas upgraders, compressors, etc.

Therefore, the industry needs support, if not in the form of a subsidy then in the form of capital grants to help bring the initial build cost down.

AD has a role to play in decarbonising both agriculture and energy while displacing chemical fertiliser with organic bio-fertilisers and helping to better manage farm nutrients. These opportunities to farmers can no longer be ignored in a rapidly changing industry.

Milk price gap continues to rise

There is now a 4c/l differential in the price being returned to farmers and what processors are receiving from Ornua. The reasoning for the differential should be made clear to farmers by their co-op board members. As input costs at farm level balloon, the ability of farmers to accept a deflated market price in 2022 will not exist.

Meanwhile, the scale of the differential should re-focus farmer attention on the value creation that Ornua, through Kerrygold, is generating in the market.

Worryingly, the risk to this value creation from Irish processors competing with Kerrygold in its main export markets appears not to have resonated with dairy farmers with the recent move by Dairygold to enter the US market in competition largely having gone unchallenged by the farm organisations.