Once again we see the future of our agricultural sector being debated within the political arena. There has been no shortage of commentators wanting to express an opinion on how the sector should be reformed. Some present a vision where radical reform could deliver both in terms of climate change obligations and farm incomes.
In an interview over the weekend, An Taoiseach Leo Varadkar said: “Ireland needs to see more ambitious climate action as an opportunity to remake agriculture.” According to the Taoiseach, this would “give much better and secure incomes to our farmers for diversifying”.
It is not surprising that his comments echo the views of John Fitzgerald, chair of the Climate Change Advisory Council. Fitzgerald has justified recommendations from the advisory council to cut the national suckler herd by 500,000 cows on the basis that alternative land uses, such as forestry, would deliver more sustainable incomes to farmers.
We also have the Green Party and more recently the European Commission, through its Farm to Fork strategy, painting a utopian landscape where a radical overhaul of the agricultural sector will deliver for farmers and the environment. As Amy Forde reports, the Commission sees a rapid expansion of the organic farming sector as the direction of travel.
So does the green agenda actually provide the silver bullet that many farmers have been waiting for – particularly, as Fitzgerald claims, those in the low-income suckler and beef sector? Would a radical overhaul of the sector, including a dramatic reshaping of the national suckler herd, actually benefit farmers financially?
Unfortunately, it is a question that no farmer is in a position to answer. Despite repeated assurances, neither the Taoiseach, Fitzgerald, the Green Party nor the European Commission has presented a detailed economic analysis or produced a policy framework to support their claims.
At EU level, we have yet to see an economic impact assessment detailing the effect at farm level of reducing pesticide use by 50%. Nor have we seen either an ability or willingness for the EU to apply these same environmental standards to food imports. There has also been little discussion on the impact that such a dramatic shift to organic production would have on food prices. This raises the question if the agenda is to wind down EU food production by starving farmers of production technologies simply to allow more agricultural concessions to be made in international trade deals.
In the case of the Taoiseach’s comments, where is the economic assessment that supports his view that more ambitious climate action will deliver better and more secure incomes to farmers? The same need for accountability equally applies to Fitzgerald and the Green Party: where is the economic model that shows that farm incomes and rural Ireland will benefit financially from the green agenda, even if it comes at the expense of the national suckler herd?
To date, the agenda has been to exclude farmers from the renewable energy sector with Government policy favouring semi-state agencies in the pursuit of large-scale development as opposed to community-based projects.
The suckler sector is too important simply for it to be cast aside in the hope of better things to come
Meanwhile, despite claims that the forestry sector is the saviour of suckler farmers, the rate of afforestation in 2019 was just 40% of the Government’s target. The lack of proper legislation has seen the sector grind to a halt in the absence of licence approvals for planting and felling.
When discussing the future of the national suckler herd in the context of climate change, it is often ignored that the sector contributes €3bn per annum to the rural economy and supports 52,000 jobs. It is an integral part of the economic fabric of many towns and villages.
The sector is too important simply for it to be cast aside in the hope of better things to come. It is legitimate for farmers to now ask the Taoiseach to present, in detail, economic modelling and the policy framework to support his view that more ambitious climate action will deliver better and more secure incomes to farmers.
If the Government has a strategic plan and long-term policy framework that will deliver a win-win for the environment and farm incomes, why would it not be brought into the public arena for farmers to give it full consideration?
If the direction of travel is to continue with a flawed policy of focusing only on national emission targets, as highlighted by Colm McCarthy, and move towards environmental protection at the expense of production, those who promote that view have a duty to spell out the details of the policy framework that will be put in place to protect farmers and rural communities. Farmers are not mushrooms – they shouldn’t be kept in the dark.
\ Jim Cogan
COVID-19: the biggest shock ever to hit farm incomes
At the end of April, the Irish Farmers Journal commissioned UCD Prof Michael Wallace to assess the economic impact of COVID-19 on Irish farm incomes. His findings show that the COVID-19 pandemic will deliver one of the biggest income hits ever levied on the sector.
Even in a scenario where prices stabilise at current levels, the impact on farm incomes in 2020 is forecast to be close to €600m. Income from dairying is forecast to fall €320m with income from beef production falling €250m. If the presence of the virus causes long-term disruption to the food service sector and impacts negatively on consumer sentiment, the financial impact could reach €1bn. CSO figures, which show aggregated farm incomes (operating surplus) to range from €1-€1.5bn per annum, excluding subsidies, puts the scale of the hit into context.
While the more severe scenario is thought less likely, few have a clear vision as to what the future holds in the absence of a vaccine or suitable course of treatment for the virus. Most countries are only slowly coming to grips with the challenges of trying to unlock their economies while also protecting public health. The threat of a second wave of the virus is weighing heavily on the minds of most governments.
Given the scale of the economic challenges for farmers, the €2bn COVID-19 credit scheme announced by the Government at the weekend is both welcome and necessary. As more details become available, it will be critical that the rollout of the scheme is not delayed and the proportion of funding allocated to farmers reflects the scale of the economic challenges.
The scale of the financial hit to farm incomes should also lend weight to Minister Creed’s campaign for EU supports ahead of next week’s meeting of EU agricultural ministers. The minster recently announced he has secured unanimous supports across 27 member states for more comprehensive action in response to COVID-19. Along with aid for private storage, he is also seeking direct supports for the beef sector, summer CAP payments and fewer farm inspections.
EU flags outside the Berlaymont, home of the European Commission in Brussels.
European Union: coronavirus threat to single market
Pre-COVID-19, protecting the single market and ensuring a level playing field was a sacred principle of the EU. We should not ignore the extent to which this has been damaged by the European Commission’s decision to relax EU state aid rules, creating the opportunity for the wealthiest member states to secure an unfair advantage within the single market.
Commission data shows that while Germany represents 25% of the EU’s GDP, it accounts for 52% of the total state aid provided in response to COVID-19.
The biggest benefit of Ireland’s membership of the EU – by far – is access to the single market.
Political attention should be given to the impact that the creation of an un-level playing field could have on our exports. Increased calls to re-nationalise food markets has major implications for our agricultural sector.
Beef: solution required for BEAM reductions
Also in this week’s edition, Adam Woods details what steps farmers need to take to comply with the BEAM scheme. Many farmers are concerned in relation to complying with the stock reduction element.
The 5% reduction requirement should be adjusted to reflect the impact of COVID-19 on beef prices and the ability of farmers to trade stock through marts.
Guidance needs to be given quickly as we do not want a situation where farmers are being forced to sell stock below market values.
Once again we see the future of our agricultural sector being debated within the political arena. There has been no shortage of commentators wanting to express an opinion on how the sector should be reformed. Some present a vision where radical reform could deliver both in terms of climate change obligations and farm incomes.
In an interview over the weekend, An Taoiseach Leo Varadkar said: “Ireland needs to see more ambitious climate action as an opportunity to remake agriculture.” According to the Taoiseach, this would “give much better and secure incomes to our farmers for diversifying”.
It is not surprising that his comments echo the views of John Fitzgerald, chair of the Climate Change Advisory Council. Fitzgerald has justified recommendations from the advisory council to cut the national suckler herd by 500,000 cows on the basis that alternative land uses, such as forestry, would deliver more sustainable incomes to farmers.
We also have the Green Party and more recently the European Commission, through its Farm to Fork strategy, painting a utopian landscape where a radical overhaul of the agricultural sector will deliver for farmers and the environment. As Amy Forde reports, the Commission sees a rapid expansion of the organic farming sector as the direction of travel.
So does the green agenda actually provide the silver bullet that many farmers have been waiting for – particularly, as Fitzgerald claims, those in the low-income suckler and beef sector? Would a radical overhaul of the sector, including a dramatic reshaping of the national suckler herd, actually benefit farmers financially?
Unfortunately, it is a question that no farmer is in a position to answer. Despite repeated assurances, neither the Taoiseach, Fitzgerald, the Green Party nor the European Commission has presented a detailed economic analysis or produced a policy framework to support their claims.
At EU level, we have yet to see an economic impact assessment detailing the effect at farm level of reducing pesticide use by 50%. Nor have we seen either an ability or willingness for the EU to apply these same environmental standards to food imports. There has also been little discussion on the impact that such a dramatic shift to organic production would have on food prices. This raises the question if the agenda is to wind down EU food production by starving farmers of production technologies simply to allow more agricultural concessions to be made in international trade deals.
In the case of the Taoiseach’s comments, where is the economic assessment that supports his view that more ambitious climate action will deliver better and more secure incomes to farmers? The same need for accountability equally applies to Fitzgerald and the Green Party: where is the economic model that shows that farm incomes and rural Ireland will benefit financially from the green agenda, even if it comes at the expense of the national suckler herd?
To date, the agenda has been to exclude farmers from the renewable energy sector with Government policy favouring semi-state agencies in the pursuit of large-scale development as opposed to community-based projects.
The suckler sector is too important simply for it to be cast aside in the hope of better things to come
Meanwhile, despite claims that the forestry sector is the saviour of suckler farmers, the rate of afforestation in 2019 was just 40% of the Government’s target. The lack of proper legislation has seen the sector grind to a halt in the absence of licence approvals for planting and felling.
When discussing the future of the national suckler herd in the context of climate change, it is often ignored that the sector contributes €3bn per annum to the rural economy and supports 52,000 jobs. It is an integral part of the economic fabric of many towns and villages.
The sector is too important simply for it to be cast aside in the hope of better things to come. It is legitimate for farmers to now ask the Taoiseach to present, in detail, economic modelling and the policy framework to support his view that more ambitious climate action will deliver better and more secure incomes to farmers.
If the Government has a strategic plan and long-term policy framework that will deliver a win-win for the environment and farm incomes, why would it not be brought into the public arena for farmers to give it full consideration?
If the direction of travel is to continue with a flawed policy of focusing only on national emission targets, as highlighted by Colm McCarthy, and move towards environmental protection at the expense of production, those who promote that view have a duty to spell out the details of the policy framework that will be put in place to protect farmers and rural communities. Farmers are not mushrooms – they shouldn’t be kept in the dark.
\ Jim Cogan
COVID-19: the biggest shock ever to hit farm incomes
At the end of April, the Irish Farmers Journal commissioned UCD Prof Michael Wallace to assess the economic impact of COVID-19 on Irish farm incomes. His findings show that the COVID-19 pandemic will deliver one of the biggest income hits ever levied on the sector.
Even in a scenario where prices stabilise at current levels, the impact on farm incomes in 2020 is forecast to be close to €600m. Income from dairying is forecast to fall €320m with income from beef production falling €250m. If the presence of the virus causes long-term disruption to the food service sector and impacts negatively on consumer sentiment, the financial impact could reach €1bn. CSO figures, which show aggregated farm incomes (operating surplus) to range from €1-€1.5bn per annum, excluding subsidies, puts the scale of the hit into context.
While the more severe scenario is thought less likely, few have a clear vision as to what the future holds in the absence of a vaccine or suitable course of treatment for the virus. Most countries are only slowly coming to grips with the challenges of trying to unlock their economies while also protecting public health. The threat of a second wave of the virus is weighing heavily on the minds of most governments.
Given the scale of the economic challenges for farmers, the €2bn COVID-19 credit scheme announced by the Government at the weekend is both welcome and necessary. As more details become available, it will be critical that the rollout of the scheme is not delayed and the proportion of funding allocated to farmers reflects the scale of the economic challenges.
The scale of the financial hit to farm incomes should also lend weight to Minister Creed’s campaign for EU supports ahead of next week’s meeting of EU agricultural ministers. The minster recently announced he has secured unanimous supports across 27 member states for more comprehensive action in response to COVID-19. Along with aid for private storage, he is also seeking direct supports for the beef sector, summer CAP payments and fewer farm inspections.
EU flags outside the Berlaymont, home of the European Commission in Brussels.
European Union: coronavirus threat to single market
Pre-COVID-19, protecting the single market and ensuring a level playing field was a sacred principle of the EU. We should not ignore the extent to which this has been damaged by the European Commission’s decision to relax EU state aid rules, creating the opportunity for the wealthiest member states to secure an unfair advantage within the single market.
Commission data shows that while Germany represents 25% of the EU’s GDP, it accounts for 52% of the total state aid provided in response to COVID-19.
The biggest benefit of Ireland’s membership of the EU – by far – is access to the single market.
Political attention should be given to the impact that the creation of an un-level playing field could have on our exports. Increased calls to re-nationalise food markets has major implications for our agricultural sector.
Beef: solution required for BEAM reductions
Also in this week’s edition, Adam Woods details what steps farmers need to take to comply with the BEAM scheme. Many farmers are concerned in relation to complying with the stock reduction element.
The 5% reduction requirement should be adjusted to reflect the impact of COVID-19 on beef prices and the ability of farmers to trade stock through marts.
Guidance needs to be given quickly as we do not want a situation where farmers are being forced to sell stock below market values.
This is a subscriber-only article
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