If the nitrates derogation goes and farmers have to reduce their stocking rate to 170kg organic nitrogen per hectare, farmers and co-ops alike will end up with stranded assets, TJ Flanagan of ICOS has said.
Speaking at Dairy Day in Páirc Uí Chaoimh last Thursday, Flanagan estimated that since the abolition of milk quotas €1bn has been spent on stainless steel at co-op level and another €1bn has been spent at farm level.
“If we lose our derogation and we’re down to 170kg, at farm level, farmers with high levels of borrowing won’t be able to get land, or will have to get rid of cows. We’ll be in a fair bit of trouble.
“We need a singular focus now to get this right. We have a specific task facing us over the next 25 months where we have to address that water quality piece, if we get that right we’ll survive,” he said.
Meanwhile, lecturer Declan O’Connor told those at Dairy Day that dairy is a very positive industry to be associated with.
Forecasts for the future of the industry, O’Connor said, are positive, as global dairy demand is expected to continue to increase by 1% or 2%.
However, he went on to say that dairy farmers need certainty and stressed the need to address the risks related to dairying.
“I cannot really think of a more risky industry, any industry with more uncertainty, so it’s how you divide that uncertainty is going to be tricky.
“The risks have got to be addressed, that’s why you need risk management tools, whether it’s from a health point of view [or a price point of view] but the most important one is in terms of regulation,” he said in reference to the derogation.
“Farmers need certainty in regulation, you cannot keep on operating where the goal posts are being moved or where you have no idea where the goal posts are,” he said.