Editorial: does every farmer really need to own a tractor?
In this week's editorial, Justin McCarthy asks if farmers should share tractors, looks at the labour shortage in dairying and the Department's response to our report on inspections.

Our Machinery section this week features a tractor special. Within it is a listing of the various tractors available on the Irish market, along with their performance details and – most importantly – list price. With the typical 80-120 horse power model now costing from €70,000 to €100,000 depending on the specification and brand, the purchase of a new tractor will represent one of the largest investment decisions most farmers will make.

It is also worth noting that on its own, a tractor will deliver little, only acting as the powerhouse for the implements that are attached. Therefore, to extract value from the machine itself, further investment in equipment is required, whether it be in a loader, mower, fertiliser spreader, trailer or tillage equipment.

In the last few years in particular, we have seen great strides in the quality of service provided by agricultural contractors. The professionalism of the service and the superior capacity of the equipment and technology most contractors are investing in has brought change at farm level. Probably one of the best examples of this is the fact that it is now the exception rather than the norm to see farmers harvesting their own silage.

However, like house ownership, there is a long tradition of Irish farmers having to own their own tractor – of course the stark difference is that in most cases the tractor is a depreciating asset, while the house should at least retain its value. Questioning this mentality should be done against a backdrop where:

  • The bulk of Irish farmers are small-scale operators where the output and profit-generating capacity of the farm are totally disproportionate to the investment required in having a tractor on the farm – even a secondhand machine.
  • Advances in new technologies have seen the output capacity of the modern-day tractor far exceed what the demand is on these smaller -scale farms, leaving the tractor sitting idle for large parts of the year.
  • There is of course a valid argument that, at present, these farmers have little alternative but to have their own tractor sitting in the yard for 365 days of the year. Getting a contractor to carry out smaller tasks on the farm such as topping, feeding animals over the winter and spreading fertiliser is difficult and such services are often not available.

    However, the necessary technologies are available for this to change and to allow machines to move from farm to farm as required. We have seen in other industries how the development of apps has allowed for increased sharing of assets. In the hospitality industry, the introduction of Airbnb has allowed individuals share their most prized asset: their home. Meanwhile in London, we see similar technology used allowing city dwellers share their cars with total strangers.

    Is it a stretch too far to imagine a service where a part-time farmer books a tractor over an app to carry out work?

    The question is: can these same technologies be used when it comes to farmers sharing assets such as tractors? Is it a stretch too far to imagine a service where a part-time farmer books a tractor over an app to carry out work during the course of the weekend or where a tractor/loading shovel that is working on a tillage farm in the autumn moves on to a livestock farm to feed animals over the winter?

    Fears of the past around how machines were being driven, their locations and even their misuse can now all be easily addressed by technology. Driver performance can be monitored remotely and rated, GPS technology can pinpoint machine location and restrict movement and in-cab controls can be overridden remotely, allowing the machine be disabled or performance restricted.

    Irish agriculture has a long tradition of being exceptionally well serviced by machinery manufacturers and dealers always being to the forefront in ensuring the sector has had access to the latest technologies. There is clearly now an opportunity for them to look at how technology can improve the utilisation of their machines on farm by creating a new ownership structure and, in doing so, create a new market with the potential to generate revenue from machines sitting in stock.

    There is also a farm safety dividend with farmers having access to the proper equipment for carrying out various tasks.

    Dairying: attracting young people into dairying

    As the economy approaches full employment, attracting young people into farming is going to become more difficult. When we consider that there is already a labour shortage in the dairy sector, the industry really needs to pull up its socks if it is going to keep growing.

    Attracting new people into the industry is one way of doing it, but as Aidan Brennan reports, improving the situation for existing employees to retain them within farming is also needed.

    We can’t and shouldn’t expect people to work where facilities and processes are inadequate. This really added to the workload this spring. It is interesting to note that over 25% of dairy farmers surveyed said that calving and calf-rearing facilities were inadequate. Springtime is busy enough without adding extra work and stress by not having enough housing.

    But it’s not all about sheds either. The best facilities in the world won’t retain staff if they feel they are not respected, given responsibility, time off weekly and shown appreciation for their work.

    Being good at managing people is a skillset that farmers can and must learn, much the same as managing grass and cows. Who is going to help them learn these skills?

    Department: farmers deserve fairness and respect during inspections

    The Department of Agriculture must be able to guarantee that the necessary oversight, monitoring and appeals structures are in place to ensure farmers are treated fairly and respectfully when engaging with officials. There is no doubt that this is the case in the vast majority of interactions.

    This week, Thomas Hubert continues his investigation into a case where a number of farmers are making serious allegations against a specific official.

    This week’s report on the chain of events outlined by Carlow farmer Derek Deane follows a similar trend to those outlined by others.

    We have been contacted by farmers in other parts of the country making similar claims. We continue to encourage farmers who feel they have been the victim of any of the issues we have identified to contact us by email at thubert@farmersjournal.ie.

    Meanwhile, in response to our coverage, the Department has urged any farmer with a complaint to contact its Quality Service Unit. Receiving such information is obviously a critical part to building a case against any individual.

    Greenhouse gases: meeting agreed targets will be difficult

    It will require effort and commitment to reduce Irish agriculture’s greenhouse gases to meet the binding commitments that have been set – difficult but not impossible.

    The just-released analysis by the special Teagasc team dealing with this critical area is highly informative and realistic.

    The aim is to get from the current 20m tonnes of carbon dioxide (CO2) equivalent to 14.95m tonnes by 2030. While the challenges are real, the capacity to reduce Irish agriculture’s net contribution to greenhouse gas production is real and achievable. Methane production (mainly from ruminants) can be stabilised through increased efficiencies in feeding, breeding and management. Nitrous oxide, mainly from fertilisers and tillage, can be significantly reduced with current knowledge.

    Forestry and soil management can, through sequestration and more careful management of organic soils, absorb CO2 in the case of forestry and prevent its release in the case of organic soils. Finally, bioenergy from either livestock or plant material can offset fossil fuel emissions.

    Government action has been hesitate in some areas – to put it mildly – but the methods of achieving our goals and obligations, while continuing to increase output, are clearly possible from the Teagasc work. At the same time, the international carbon efficiency of Irish agriculture should continue to be stressed around the various negotiating tables.

    Editorial: is Minister Creed listening to farmers?
    Being out of touch or not listening to farmers is harsh criticism for a minister who always seems fully engaged.

    Earlier this week, the IFA accused Minister for Agriculture Michael Creed of not listening to the issues that sheep farmers have raised in relation to the compulsory introduction of EID. According to the IFA, the minister has completely underestimated the on-farm costs associated with EID. Darren Carty goes into detail here.

    It is not the first time Minster Creed has either been accused of not listening to farmers or of not understanding the problems being encountered at farm level.

    Tillage farmers have long felt let down by the minister with the Department’s response to the weather-related crop losses incurred in 2016 only reinforcing this view. It was just over a year ago when tillage farmers were forced to occupy the Department offices in Dublin – a move that finally forced the minister to reluctantly agree to a €1.5m crisis fund.

    National headlines

    The same reluctance emerged again earlier this spring when the minister was slow to accept the impact that an exceptionally harsh spring was having on farmers. It was only after the issue hit the national headlines that Minister Creed took action and moved to help farmers source imported fodder.

    In an interview published earlier this week, the minister once again played down the challenges of last spring, highlighting that the volumes of fodder imported earlier in the year only amounted to feeding the national herd for an eight-hour period – indicating that the challenges farmers faced in the spring were overhyped.

    It is a view that farmers will no doubt have difficulty reconciling with – after incurring the stress last spring of seeing winter fodder supplies dwindle, while at the same not being able to get stock to grass due to poor ground conditions.

    The minister for agriculture of the day and his senior officials and advisers have to display judgement and empathy. Neither have been present in sufficient quantities

    Furthermore, making such a statement at a time when farmers across the country are once again under pressure – this time due to the impact of one of the worst droughts to hit the country in over 30 years – either points to a lack of judgement or empathy within the minister’s team. It perhaps explains why Minister Creed once again stands accused by farmers of being behind the curve when it comes to taking the necessary steps to address the challenges created by a summer where grass growth has crashed due to lack of moisture.

    While acknowledging the aid package announced by the minister late last week, to encourage tillage farmers to plant catch crops for the livestock sector, it again is seen by many as a reluctant gesture – mainly because the real potential of such a scheme was to get these catch crops planted in mid-July as soon as winter crops were harvested. The two- to three-week delay in the minister making a decision has greatly reduced the yield potential of these crops.

    Government support

    Like every sector of society, farmers expect the Government and in particular the minister of the day to provide support to minimise the damage and suffering caused by exceptional events – as was the case when assistance was rightly provided to the families and businesses affected by severe flooding in 2016.

    By any objective standards the weather challenges that farmers have had to deal with this year must be judged as exceptional, and so merited a timely and effective official response. To date, the minister hasn’t ticked either box in the eyes of farmers.

    Of course, criticism of Minister Creed extends beyond how he and his department have dealt with weather- and fodder-related issues. Comments in relation to providing additional support for the suckler sector have created a view that the Government sees sucklers as an economic liability in the context of dealing with the challenges of climate change. Again, the minister is seen as having been slow in defending the role of the sector around the Cabinet table.

    Lack of delivery in relation to the low-interest rate loan scheme that was announced in October 2017, and a disjointed rollout of schemes under the Rural Development Programme (RDP) where communication with farmers was poor, particularly in relation to payments, have added to frustrations. Again, there appears to be a lack of appreciation as to how much farmers depend on payments under these schemes to simply meet household bills.

    Being out of touch or not listening to farmers is harsh criticism for a minister who, at a personal level, always comes across as fully engaged and committed to supporting the sector for which he holds responsibility. However, the minister for agriculture of the day and his senior officials and advisers have to display judgement and empathy. Neither have been present in sufficient quantities in several recent issues and the Government’s standing among the farming community has suffered accordingly.

    Disconnect

    It raises the question as to where this disconnect is occurring. The Department of Agriculture has always had a reputation for competence across the rest of the civil service: its delivery of the BPS has been recognised as the best in Europe, as has its negotiating capacity in Brussels and in the international arena, reflected in the significant breakthrough in getting beef into China.

    Traditionally, it has seen some outstanding individuals appointed to key positions. But things were different in the past. Civil servants and ministerial advisers were usually from outside of the capital and had a real feel and empathy with the broad agricultural sector. From the outside, it would appear that the need for empathy and judgement among key members of the ministerial team and at senior level in the Department has played second fiddle to the skills necessary to deliver the administrative oversight function demanded by the EU.

    With the secretary general post currently under consideration, it is an opportune time for Minister Creed to question if the present structures that have been in existence are the best ones to serve the sector and ensure all stakeholders work together to reach what is a common goal: for Irish agriculture to develop to its full potential for the betterment of both farmers and the wider economy.

    Fodder: putting a plan in place for tight fodder supplies and cashflow

    This week’s paper includes a 32-page Winter Feed & Finance supplement produced by our specialist team with the support of IFAC. The key piece of advice is to take action early. Small steps taken in early November could avoid having to take much more costly measures next February. In many cases, the most cost-effective response will be to increased concentrates rather than buying silage, hay and/or straw. Where 50% of the forage requirement is available on farm, it is not necessary to buy forage to fill the gap unless it is value for money in relation to concentrates. Also in the supplement, IFAC looks at the cost implications of what has been a difficult year.

    Elsewhere this week, Aidan Brennan launches a special series looking at what steps farmers can take over the next six weeks to grow their own way out of a fodder deficit.

    Potatoes: farmers facing losses of yield and quality

    Potato sprouting in drills.

    The recent hot spell has created a huge problem for most potato producers. The intense heat in combination with moisture stress has led to regrowth in the tubers in the ground long before the crop is ready to be harvested. This will inevitably lead to a loss of yield or quality – or both.

    Potato growers invest about €60m annually to produce the national crop of just under 8,000ha so a disaster of this kind would be catastrophic. The fact that this is a new and unique problem leaves the sector without the necessary guidance as to how best to react.

    Read more

    Planting the seeds to grow your own

    Anger over changes to mandatory EID tagging

    Editorial: are Irish cattle the secret to success in Britain?
    In this week's editorial, Justin McCarthy looks at how Irish meat processors are taking control of the British market.

    As we predicted last week, Kepak has reached agreement to buy the red meat division of British-based 2 Sisters Food Group. The deal will effectively double Kepak’s processing capacity, bringing its annual cattle throughput to over 500,000 head, with sheep reaching 1.35m.

    The deal, for an undisclosed sum, strengthens the processor’s strong relationship with the retail giant Tesco, with the Kepak group now supplying Tesco Ireland and Tesco UK. It is understood that Tesco played an influential role in ensuring the deal between the two processors went ahead, therefore giving Kepak an immediate blue-chip retailer as it re-enters the British beef and lamb processing sector, having exited back in 2007.

    This latest deal further reinforces the dominance of Irish-controlled meat plants in Britain. ABP Food group and Dawn Meats have been very aggressive in the mergers and acquisitions space over the last 10 years – with ABP having traditionally bought individual processing businesses located in strategically important areas, while Dawn Meats recently acquired a controlling shareholding in the Dunbia group.

    As a result, three Irish-controlled meat processors – ABP Food Group, Dawn Meats and Kepak – control just over 50% of the British cattle kill, with ABP and Dawn each controlling 20% and Kepak, through 2 Sisters, controlling 11%. Across Britain and Ireland, the same three processors now control 60% of cattle slaughtering.

    So, how have three Irish-controlled meat processors managed to secure 50% of the British cattle kill? A central plank to their expansion programme over the past 10 years has been their ability to develop strong supply relationships with the leading British retailers. This week’s announcement now sees ABP, Dawn and Kepak closely aligned to the three largest retailers, Tesco, Asda and Sainsbury’s, which between them control around 60-65% of the highly prized British retail market. The processors’ dominance is also evident at the premium end of the food service market, and with the leading burger chains.

    Finished cattle prices in Ireland can range from €100 to over €300 per head below the British price

    A key element to developing a strong supply relationship with any retailer is being able to deliver a high-quality product at a competitive price. It has often been lamented by British-controlled processors that the key to running a successful meat processing business in Britain is having meat factories in Ireland – a direct reference to the fact that finished cattle prices in Ireland can range from €100 to over €300 per head below the British price.

    In assessing how Irish processors have gained such a strong foothold, it would be wrong not to acknowledge the standards to which they operate across their British and Irish sites. This is evidenced by their ability to develop business across the world in a trading environment that has undergone continuing change.

    All of these companies successfully utilised the intervention buying support system for beef in the 1970s, 1980s and into the 1990s. They availed of the EU export refund support to build international export businesses until they ended in 2005. More importantly, when these supports ended, they were in a position to invest in infrastructure and acquisitions to launch an assault on the unsupported retail and food service sectors in Britain and beyond to mainland Europe. There were setbacks like BSE and the horsemeat scandal, yet the Irish supply chain retained the confidence of its British customers.

    The expertise of the Irish meat industry to provide an excellent service and develop markets is a given. However, it is also valid to question the significance of access to an Irish cattle pool that is consistently €100 to €300 per head below the British equivalent, yet the promotional material refers to “British and Irish”.

    What’s more, the price to the consumer is the same, whether for a retail pack of meat or a Big Mac, irrespective of the fact that the cattle from which the beef was taken were bought at a much cheaper price if they were Irish.

    The ability to blend British and Irish product clearly delivers Irish processors a competitive advantage when dealing with margin-hungry retailers.

    With the private ownership structure and lack of legal obligation on transparency, it is impossible to quantify how important the Irish cattle element of “British and Irish” beef is to the companies that have access to both. The acquisition pattern of the past decade and more suggests Irish processors have had an edge on British counterparts, and in the absence of evidence to the contrary, the importance of cheaper Irish cattle is a plausible explanation.

    This is reinforced by the inability of British-based businesses to access Irish cattle due to labelling regulations, leaving the concern that there are higher margins from Irish cattle going to Irish-controlled processors, and not to Irish farmers.

    Gene editing: court decision a challenge for the EU

    Last week’s decision by the European Court of Justice (ECJ), which ruled that new breeding techniques like gene editing come under the legislation which governs genetically modified organisms (GMOs), represents another challenge for the future development of the EU.

    Many new technologies have been developed since the introduction of the GMO legislation which have the potential to significantly alter the genetic fine-tuning of humans, animals and plants for the good of society. As these advances have now been put on ice, the EU has two options:

    1. Live with the current ruling. This will prevent the EU from benefiting from the technological advances available to societies elsewhere.

    2. Change EU legislation to enable proven safe technologies and products to be developed so that society can benefit from advances in science.

    Do our MEPs have the vision and conviction to act for the future of the EU? It is surprising that farm organisations have not reacted more vocally to the ECJ decision given its potential impact on the long-term development of food production within the EU and the global competitiveness of EU farmers.

    Ironically, on the same day of the ECJ ruling, we had the announcement that the EU had agreed to buy increased volumes of GM soya beans from the US.

    Drought and feed crisis: missed opportunity as Minister Creed fails to grasp fodder relief options

    Seed bed preparation under way on John Stokes' tillage farm in Co Cork, where Westerwolds will be sown to alleviate pressure on the fodder shortage.

    It will come as a major disappointment to those struggling with the impact of drought conditions that Minister for Agriculture Michael Creed has failed to take any meaningful steps to address what has the potential to be a major fodder issue for many farmers next winter.

    The European Commission has a wide range of measures available to enable member states help farmers boost fodder supplies, including allowing governments provide direct income support to farmers. Yet the Irish Government appears reluctant.

    While growth conditions have improved, the minister is missing out on a real opportunity to boost national fodder reserves. By not moving to encourage tillage farmers to plant catch/fodder crops, the window of yield opportunity is reducing weekly.

    Farmers will be asking why the minister has not moved on the flexibilities provided by the Commission around greening and broadening the catch crop species base.

    Unfortunately, the minister appears more focused on the promotion of what others are doing to help farmers rather than taking serious action on behalf of the Department.