More so than any other sector, the prosperity of Irish agriculture is subject to political influence and policy decisions. Ensuring a deep understanding of the sector at all levels of Government is key to ensuring appropriate policy positions are adopted.

This week we carry an exclusive interview with An Taoiseach Leo Varadkar. The interview took place on the sidelines of a Fine Gael event held on a beef farm in Cork last Friday evening – clearly designed to ensure the party starts to bed down its traditional farming vote in advance of a possible general election.

While obviously well briefed on all matters agricultural, during the interview, the Taoiseach came across as having a solid understanding of the key challenges facing the agricultural sector, often going beyond simply stating the Government’s position to providing the context behind why such a position was being adopted.

Perhaps more impressive was when the conversation strayed into areas where he was less familiar, he actively sought more information on the issue with an obvious keenness to develop his understanding of it.

An Taoiseach Leo Varadkar speaking to Irish Farmers Journal editor Justin McCarthy. \ Donal O' Leary

On Brexit, the Taoiseach is clearly still committed publicly to the position that a deal can be reached that protects Irish interests, although our interview did take place before the resignations of UK Brexit secretary David Davis and foreign secretary Boris Johnson. However, his response when questioned on how farm incomes would be protected in the event of a no-deal Brexit is perhaps the strongest indication yet that talks are taking place in the background as to what response measures Ireland would need from the EU if it all went wrong.

While prefacing his comments that a hard Brexit was very much “hypothetical”, he accepted that if such an outcome did come to pass, the impact on agriculture would be severe. His language around the need for “transition funds” to help the agricultural sector adjust to the new trading environment is positive, as are his comments that it is understood across the European Union that Ireland would need state aid packages and investment packages in the event of a hard Brexit.

Clearly talks on how the EU would support the Irish economy and the agricultural sector in the wake of a hard Brexit are at a more advanced stage than is being portrayed.

The IFA has its work cut out if the Government is to be convinced that the budget should be increased to reflect inflation

On the future of CAP, the Taoiseach’s views are broadly aligned to those of farmers on the need for the CAP budget to be protected. However, the IFA clearly has its work cut out if the Government is to be convinced that the budget should be increased to a level that reflects the cost of inflation – “paying a little more” not to have reductions is very different to committing to providing the additional funds necessary to offset the cost of inflation over the lifetime of the next budget.

It was promising to see the Government not simply taking the populist view on the subject of capping payments. While the Taoiseach accepted the Government was discussing a cap of €60,000 with degressivity up to €100,000, he accepted that there could be anomalies. The issue of capping is not as simple as some might like to portray and the Government – through Minister for Agriculture Michael Creed – is right to take time on the issue. A poorly thought out model could end up penalising genuine farmers where CAP payments make up 80-100% of family income simply to reward those where, in the context of total family income, CAP payments are irrelevant due to large off-farm earnings. Such a scenario is equally as indefensible as allowing multimillionaires claim large six-figure sums in CAP payments despite their income and wealth being generated from non-farming activities.

There is also clearly work to be done on convincing the Government on the merits of a targeted payment for low-income sectors – particularly suckling. The Taoiseach’s comments on the issue are disappointing in that he appeared to link targeted payments to climate issues. His views that the focus should be on quality, productivity and efficiency are correct but the Government clearly needs to join the dots and realise that a targeted payment could help farmers deliver on all three.

A national envelope-styled system where the total pot of money available under any scheme is fixed would remove the incentive for farmers to increase cow numbers.

On the subject of climate change, it was very much the party line recognising that while in carbon terms we are one of the most efficient food producers in the world, this does not mean that farmers can expect a free pass when it comes to tackling the issue – a position with which most in agricultural circles would agree. However, this does not detract from the need for Government to repeatedly highlight the fact that Ireland’s emissions profile is flawed on the basis that it combines the carbon emissions associated with the oil and energy that we import and the food that we produce for export.

Overall, the Taoiseach appears to have a solid understanding of the main issues affecting the future of our agricultural sector. However, as his colleague Minister Creed is well aware, farmers judge performance by actions and not words.

Sheep 2018: oft-forgotten sector takes centre stage

Cheryl O'Brien exhibiting the overall champion at Sheep 2018 while Stephen Lynch exhibits the reserve. Pictured holding the champion cup is judge Michael Oliver.

The importance of the sheep sector within Irish agriculture is often not fully appreciated, despite Ireland being the fourth largest sheepmeat exporter in the world. While often seen as the poor relation to other farming sectors, Teagasc income figures show the efficient lowland sheep production systems to be out-preforming suckler and cattle finishing systems.

It was good, therefore, to see Teagasc put the sector centre stage at Sheep 2018 last Saturday in Athenry. There was an excellent blend of interactive on-farm technical demonstrations combined with an exhibition of top-quality breeding stock.

Alongside this was a range of information seminars that ran over the course of the day. One of the topics discussed was the impact of Brexit on the sector. On the surface, the sheep sector in the Republic is one that could actually stand to benefit from a hard Brexit, mainly due to the exclusion of British lamb in the French market and the ending of 400,000 lambs coming from Northern Ireland for direct slaughter each year.

However, as Dr Kevin Hanrahan was quick to point out, such an analysis ignores the fact that most sheep farms also run cattle enterprises and therefore any gain would be eroded by a sharp decline in beef prices.

Also, with the sheep sector reliant on CAP for 113% of income, even a marginal cut in the CAP budget would have a big impact on overall returns.

Meanwhile, Prof Gerry Boyle used the platform to again highlight the importance of ensuring that the environmental credentials of sheep farming were interwoven in further CAP schemes and marketing messages. It was a view echoed by Declan Fennell from Bord Bia.

Boyle’s insistence that such schemes must be tailored to the specific environment in which the farming system operates would address many of the issues raised by hill farmers in relation to the current GLAS.

EID tagging was naturally to the fore of farmers’ minds on the day – Darren Carty details the result of an IFA survey carried out at the event here. Access to China and the US is seen as being dependent on the implementation of EID.

However, this argument would carry much more credibility if Bord Bia and the industry were able to give farmers hard facts around potential for volumes and prices in these markets.

There is no doubt that EID would be a much easier sell to farmers in the event that a complete economic analysis was carried out showing where the financial gains would be delivered and how this would help profitability inside the farm gate. In such instances, this should explore the market potential and possibility for efficiency gains at farm level.

Dairy: is the current milk price payment system working for farmers?

We received numerous calls in relation to last week’s coverage of 2017 milk prices. The exercise raises the question as to the value of paying farmers retrospectively seven to eight weeks after the first of the product is delivered. Would a model that gives farmers a longer-term vision on price for the quarter or year ahead with a top-up structure based on performance better serve farmers?

Meanwhile, Eoin Lowry reports on the financial performance of Glanbia Ireland in 2017. It delivered an after-tax profit of €43m while paying a leading milk price to farmers, which indicates the strength of the business model in 2017.

Ireland still lags behind the main international dairy production regions when it comes to price.