In a week dominated by the future of CAP and the implications for individual farmers’ payments, there were some other significant occurrences.
The EPA issued yet another warning about the sustainability of the current trajectory of Irish farming.
Strathroy issued a warning to farmers about the possibility that the further expansion of dairy output on the island may have implications for the price it can pay for new milk in peak months.
And An Taisce lost another round in its fight against Glanbia’s proposed cheese plant in Belview.
I think there is a link between all these things. We need to talk about dairy expansion.
The harsh reality of CAP reform is that for one farmer to benefit, another farmer must experience a cut in payments.
This is a simple matter of maths, as Pillar I funding, the resource being drawn on, is finite and capped.
The process is guaranteed to set farmer against farmer. Some will want to gain, others won’t want to lose. Hard choices are ahead.
As farmers, we think of ourselves as entrepeneurial types, but we are operating in a strongly supported and heavily regulated industry, where we set neither the price of what we pay for inputs or what we get paid for our produce.
Producing to the highest standards in the world, forced to accept commodity prices set by a globalised market that suits big players, family farming only survives.
The unpalatable truth is that either the cost of food must rise, or subvention of food production will have to increase.
Time to talk
It is in this context that it is time, indeed it is past time, that we talk about dairying.
And this is not about Glanbia’s plant - we currently have barely enough processing capacity to cope with peak milk, and improving genetics means milk output will rise year on year even with a static dairy herd.
It’s prudent to build capacity, and to diversify the product mix to soft cheese.
The question is what is the strategy for future expansion?
Since 2014, it has been clear enough. Dairy farmers have been actively encouraged to increase production, to maximise the return of milk form grass. Non-dairy farmers have been encouraged to move into the more profitable enterprise.
The response from farmers has been mind-blowing.
The total number of cows has risen from 1,144,826 in 2010, to 1,570,180 last year, a 37% increase.
And those 425,000 extra cows are all over the country. Longford has an extra 40% of dairy cows, admittedly from a low base. The county with the largest percentage increase over the decade was actually Offaly, up 67%. More predictably, Kilkenny (up 63%) and Wexford (up 55%) follow close behind.
Farmers have expanded without having to worry about either processing capacity or any curbs or restrictions due to their carbon footprint.
That day is now ending.
Processing capacity, expanded as it has been, cannot keep pace with increasing supplies.
Glanbia and Strathroy are unlikely to be the only processors that will issue warnings to their suppliers.
The simple truth is that Irish farming’s carbon footprint was falling slightly every year prior to the end of quotas. It has risen sharply since
Supply this year is up over 8% on last year, and processing capacity barely coped. If there had been a breakdown at one of the larger processing plants in May, milk would have been been spilled.
And the carbon footprint of dairy expansion will come under a lot of scrutiny as soon as the sectoral targets are announced.
The simple truth is that Irish farming’s carbon footprint was falling slightly every year prior to the end of quotas. It has risen sharply since, and all of the extra carbon comes from dairy expansion.
Dairy farming can argue that having been held back for 30 years, it was entitled to drive on. And there is no arguing its relative profitability compared to any other enterprise.
But whatever anyone’s view of dairy expansion since 2014, any further expansion will take place in a world where carbon is being counted.
And just like direct payments, if the sector has a finite limit, one farmer’s extra carbon output will have to be offset by another farmer cutting his carbon output.
What difference does it make?
A farmer could be forgiven for wondering what difference 100 cows would make to global methane emissions.
This is particularly true if the methane trapped under permafrost in Siberia is released.
What is happening in Canada right now is a further indication of how seriously we need to consider this possibility.
The answer is that it makes no difference at all if one farmer has 100 extra cows. But an extra 425,000 cows, as we have seen in a decade, is significant, particularly in a small country like ours.
Let’s look at the numbers for a moment. There are around 18,000 dairy farmers. That’s about 15% of the 120,000 odd basic payment applicants.
It’s fair to say almost all these farmers have increased cow numbers since quotas ended.
For many, it’s been moderate expansion on the existing land base. There was plenty of scope.
Trapped by quotas, most farmers had been finishing their male cattle, some had sucklers, many grew some grain or maize.
Now many dairy farms have only milking cows, with replacement heifers sent to boarding school only returning when ready to calve down.
It’s also fair to say that most dairy farmers have completed that expansion process.
I’d be surprised if more than one quarter of dairy farmers have further expansion capacity or plans at present, it could be as little as one in six.
So we are now looking at about 3,000 dairy farmers with expansion plans. Some of these are “platforming”, renting out separate farms and establishing a second or subsequent herd on that platform with paid labour and/or in some form of share-farming agreement with the landowner.
These farmers are driven, hard-working, and technically excellent. But they have a problem. Their expansion plans will create further increased methane, methane they will be shortly asked to account for as farming gets its sectoral target in a few weeks’ time.
And it’s a problem for all of us, because we will all have to share the burden of the extra methane from the extra cows that have fuelled dairy expansion.
So should 3,000 farmers be allowed to create a carbon bill that all farmers will have to pay?
A line will be drawn in the timeline. Anything before that date, whenever it is, will have to be dealt with collectively by all farmers. Anything after that date will may become the responsibility of the individual farmer.
We are currently in a strange twilight period, knowing carbon accounting is imminent, but carrying on as normal.
Diving under the gate
There is another truth. That is, in the past, whenever farmers have been aware that change was coming, a dive for the line has generally paid off.
Those farmers who milked as many cows as possible in 1983 gained milk quota, farmers who slaughtered as many cattle as possible in 2002 gained high entitlements for the following two decades. Some farmers believe it was clever to flatten all the hedges before regulations limiting hedgerow removal became law.
So it’s hard to argue with a dairy farmer who decides that the best way to prepare for a new potential carbon quota is to have as many cows as possible for whenever the line is drawn.
Like Tom Cruise diving under a closing shutter-door in Mission Impossible, get in there first, and deal with whatever is on the other side of the door afterwards.
It’s understandable, and it means that the uncertainly is actually fuelling expansion.
We have plenty of reason to be optimistic about long-term potential of dairying in Ireland. There is no reason why the primary issue of methane emissions form the dairy sector can’t be successfully tackled in time
The Zero emissions Livestock Production (ZELP) which sits at the nose/mouth of a cow and breaks the methane down into far less harmful gases continues to trial promisingly.
And the related environmental challenges can be met with wide adaptation of best practice.
The shackles may come on, but not forever.
No magic bullet
However, I have concerns about farmers placing false hope that the biogenic methane dynamic is a get out of jail free card, for three reasons.
The first reason is that the science is evolving but not resolved or universally accepted.
I’m not saying Frank Mitloehner is wrong, the deep science is way beyond my understanding.
I’m simply saying there’s no guarantee that the decision-makers in Dublin or Brussels will put it at the heart of carbon counting over the next decade.
Secondly, even if biogenic methane is universally accepted, the model is based on a balance between a stable number of cows and the offset from the carbon trapped by the grassland they are grazing.
Irish livestock production is not a stable model, and the increase is entirely due to increasing dairy cow numbers.
Thirdly, even if numbers stabilise, and even if biogenic methane is accepted by the international scientific community, there is a further truth.
If grass traps methane, it will trap atmospheric methane whether the cows are grazing it or not.
More extensive grassland farming will see an improved net output.
It can be argued that grass converted to biogas would offer a carbon double-dividend to the farmer and lower the carbon footprint by reducing emissions and providing a source of renewable energy.
No one in farming is really talking about these things. Perhaps no one is saying them because they think it is letting the side down.
We are way past that point in the debate.
Does anyone really think that Tom Arnold, the chair of the AgriFood 2030 strategy, or John Fitzgerald or Marie Donnelly of the Climate Change Advisory Council aren’t fully aware of everything I’m stating?
And as for the most trenchant critics of Irish farming and dairy expansion post-quotas, anyone following An Taisce’s campaign to overturn the planning permission granted to the cheese plant at Belview will be fully aware that they have gained an understanding of our sector and are aware of all its flaws.
There are some who want to end livestock farming, and see this as a step on the road, I have little doubt.
But if we don’t confront the reality of what we are doing, and plan for a sustainable future, we are handing a massive advantage to that viewpoint.
It is incumbent on processors to take the new realities on board.
Management and particularly farmer board members have a responsibility here.
As dairy expansion approaches whatever ceiling that will be applied to it, indiscriminate expansion must be succeeded by managed expansion.
Hard choices will have to be made.
Should all new milk be treated differently, as Glanbia will do, and Strathroy might have to? Should priority be given to established herds or to new entrants? Are smaller producers more deserving than larger farmers? Is platforming a model that should be encouraged?
Co-operatives were established to promote the common good of communities of farmers. They still exert control over almost all if Ireland’s dairy processing.
The easy thing to do would be to sit tight, say nothing, and see how things pan out. But would that be the right thing?
Charlie McConalogue mightn’t be the only one with difficult decisions ahead of him.