New obligations for tillage farmers were the broad theme of the recent Irish Tillage and Land Use Society conference. These requirements are set against a background of new greening obligations, decreasing payment supports and new vehicle regulations that will apply from January 2016. The day began with an address from Liam Woulfe, managing director of the Freshgrass Group.
Liam’s many years of experience in varying agri businesses provided him with the impetus to go it alone and this began in 2001 with the purchase of Grassland Fertilizers Ltd. A few years later, he joined with Liffey Mills in the joint purchase of Drummonds. Between the two of these businesses, he now has a considerable direct interest in the tillage sector.
But the world keeps on changing and he who stands still gets left behind. Liam was not content to be just a fertilizer supplier – that’s a commodity.
In 2013, he initiated a joint venture between Grassland Fertilizers Ltd and Groupe Rouillier in France to form Grassland-Agro. This is not just a fertilizer company, but rather a solutions company which begins at ground level to provide solutions throughout the food chain.
The Rouillier connection provided access to technology and R&D, has a turnover of €3.4bn and a presence in 49 countries.
The focus is now very much on soil, plant and animal in that sequence, as that is how agriculture functions. This has opened the door to bring a whole range of products to the market, including slurry enhancers, soil conditioners, biostimulants, bedding materials, etc. So Grassland Agro’s focus for the future is to make a real difference.
Commenting on fertilizer markets for the year ahead, Liam said that the fortunes (or not) of arable farming normally have a big bearing on markets because the crop sector consumes about 70% of global fertilizer.
Consolidation in the fertilizer industry has removed surplus production and now supply and demand are more finely balanced. But price volatility will still occur as countries take a more political approach to food supply.
Other events, such as shipping issues, cause their own pressures. Things like export licenses and port strikes also impact on supply and prices. But the traditional relationship with oil price is now well broken as the lowest-cost producer is no longer a driver of downward price pressure.
That said, Russia supplies about 20% to 25% of fertilizer to the EU, especially nitrogen. Just like it did with gas, Russia might refuse to supply the EU if sanctions were to be intensified.
Indeed, its own internal demand for fertilizer is likely to increase as it ratchets up its internal livestock production in the face of international sanctions. This is a worry, given that the majority of nitrogen production globally tends to be located in politically unstable countries.
So as things stand, Liam said that it looks like prices will be broadly similar to 2014, especially for P and K.
Looking further forward, Liam pointed to increasing competition for global resources, such as energy, water and food. We are well placed to make good use of all of these in a climate that is good for plant production.
But we must look towards more sustainable production and actively protect our soil and water resources. These are tremendous assets that, combined with our green image, can be used to successfully lever market access, especially to more premium markets. Food Harvest 2020 looks for smart green growth and Liam concurs.
While FH2020 set no targets for growth in the crops sector, Liam commented that its primarily export focus must be balanced against the need for internal supply security. “We are only 80% self-sufficient in cereals and this could threaten our Irish branding”, he commented.
There are many opportunities on the crops front. We will need more feed to support the growth envisaged for the livestock sector. We badly need protein produced all across Europe. And import feed brings additional nutrients that may have more difficulty finding a home in a more sustainably intensive agriculture.
Liam also suggested that there is more scope for partnerships to work along the supply chain to benefit all players. The tillage sector must find a way to work itself up the added value chain.
“While we must continue to strive for increased output, there is an equally great need to increase the income value of what we produce. We need to make consumers more passionate about our products, whether that be cream liqueur, porridge or Irish whiskey. Malt is a partnership – its Irishness must be promoted and this must be used to give benefit through the supply chain.”
Asked what he thought the sector should do more of, he replied “we need to show concern for the things that the public is concerned about. These can be turned into cash in time”, Liam stated. The challenge is to generate profit from production, as distinct from just output.
To do this, the sector needs to leverage relationships with the big processors and establish a direct connection with consumers. Processors are already doing this.
“Ultimately, we need to ensure that our product quality is so high that it deserves a ‘point of difference’ in the market that can be used to generate profit.
The sector needs to contribute to the Brand Ireland concept using all-Irish ingredients. We must be part of the process of “building trust in the food chain”.
CAP and greening updates from Department
Reminding us about Commissioner Hogan’s promise to simplify the greening regulations, Paud Evans from the Department of Agriculture stated that this does not include the greening rules per se, only the technical implementation rules can be changed outside of the actual regulations.
Paud went on to say that, in his experience, simplification of EU regulations often means more complications. The reason hinges on the fact that simplification can often remove some of the operating flexibility required at individual farm level.
While the greening measures impinge heavily on the tillage sector, Paud reminded us as to how far the final agreement moved from the initial proposals a few years ago. These differences are outlined in Table 1.
Fallow could be important in the 2015 crop mix, but the Commission will not accept the Department’s closed period of 1 January to 30 June. They want a 31 July closing date. This would make temporary grass more difficult to manage within fallow. But a mid-July end point is still being considered.
A second management requirement is that all fallow lands must be maintained in good condition.
The dilemma as to what a hedge is for ecological focus area (EFA) purposes looks to be coming to an end. Paud said that the Department will view a hedge as any structure that is subject to cross compliance regulations.
So if you are not allowed to remove it, it is officially a hedge for EFA purposes. This effectively means that gaps in the woody composition of a hedge are no longer an issue for farmers intending to use their hedges as EFA.
But there may still be some strings attached to this definition. Every hedge has a start and an end point on the map and it is possible that a gap from the beginning or the end to where the woody plants are may still not be acceptable for EFA.
So it seems like gappiness will not matter once you are within a woody section. This still sounds complicated, but it is much simpler than having to exclude all gaps.
A GLAS scheme will be available for 2015. Crop producers with greater than 30ha who want to use the green cover option for crop diversification, ie to remove the need for three or more crops, will be given priority access into GLAS.
However, two issues in particular remain to be ironed out. One is the proportion of the area that needs to be sown to green cover and the second is the duration of the period of cover.
For farmers currently planning their approach to EFA, Paud stated that the same parcel cannot be used for two EFA measures in the same year – eg the planting of a protein crop for EFA followed by winter cover in the same ground, or fallow followed by winter cover.
Penalties and deductions
It has been stated that penalties will not apply where a farmer is not totally greening compliant. This is technically true for 2015 and 2016, but then penalties will be phased in from 2017 onwards.
Penalties, when they apply, will eat into the basic payment entitlement, as well as the greening component. However, deductions will apply from 2015 onwards if one is not greening compliant, but they only apply to the greening component of the arable area – no penalty will apply to the greening payment on permanent pasture.
These deductions appear quite severe. They appear to equate to roughly double the noncompliant area being deducted from the greening payment.
In the case of a mixed farmer, the deduction only applies to the arable area (crops, plus fallow, plus temporary grass) and not to the area in permanent pasture.
A few other points of information also emerged. Under GLAS, the planting of green cover is entitled to a €155/ha environmental payment.
For those using green cover under GLAS to fulfil their three-crop requirement, Paud indicated that applicants will receive between €120/ha and €125/ha to compensate for the cost of planting this cover.
Fallow can provide EFA on a hectare-for-hectare basis, ie one hectare of fallow provides one hectare of EFA. But what about the hedges and ditches on a fallow parcel for EFA? Paud stated that, in this instance, the hedge and ditch areas can effectively be double counted.
One must include the area under hedges and ditches in the area of a parcel. This then counts in the fallow parcel EFA, plus the separate use of the hedge area as a landscape feature for EFA.
The same situation applies in the case of parcels growing protein crops.
Paud reminded farmers that the online mapping facility is now in place and farmers should use this to review the EFA (hedge/drain) allocation on their parcels.
Printed copies of the EFA maps, for the parcels on one’s 2014 application, will be posted to all farmers expected to comply with greening.
These EFA maps, which will also show the reference area which must now be used for future claims, will issue to farmers before Christmas and will be accompanied by a greening manual to inform farmers as to what needs to be done and how online changes should be made.
It is expected that the Basic Payment Scheme application process for 2015 will be live online by mid-February.
This process must also be used to check for greening compliance and to alter any elements of parcel EFA allocation.
It is also expected that paper application forms will issue to farmers believed to be exempt from greening before the end of February 2015.
It should be noted that individual farmers, whom the Department believe will have to comply with greening, will not be issued with a paper application. Applications that require greening compliance (10ha or more of crops) can only be made online.
Revised agricultural vehicle standards
While they do not come into force until 1 January 2016, the revised standards that will apply for agricultural vehicles are of significance given the new weight, braking, coupling and lighting requirements that will apply.
The tillage sector has a lot of big gear in terms of trailer capacity and also other associated tillage machinery.
Justin Martin from the Road Safety Authority presented an excellent summary of what is involved and the main implications of the new laws to be implemented.
These changes apply mainly to four separate areas:
New and definite weight limits have been agreed for trailers of different axle numbers and configurations.
The legal maximum weight is now governed by the number of axles, the presence (or not) of axle suspension and the tractor coupling system.
Towing speed and tyre type are other ingredients in the mix.
These details have previously been carried in this paper and there will be further articles in the near future, so I will not summarise them here.
Suffice it to say that some existing machinery on farms may have to be modified to comply with these new requirements. Farmers and contractors need to understand what is involved.