Farmers in Northern Ireland have been shocked this week with news of potential stocking rate restrictions on the way.

Down South, the potential scrapping of the ringfenced Common Agricultural Policy (CAP) budget for food and agriculture is taking centre-stage.

In Kildare on Tuesday night at the IFA CAP meeting, over 500 farmers gathered to hear the latest proposals on what the next CAP might look like.

Keynote speaker on Tuesday, Tassos Haniotis, a former director of strategy and policy analysis with DG Agri, gave his personal view that investing in soil health long-term was the only solution to a squeezed farmer margin.

He suggested while food prices are rising, the farmers’ margin has been squeezed, because on-farm costs such as energy and fertilisers are rising faster.

Limited progress

His analysis indicated that while EU agri trade has increased, there has been limited progress in greenhouse gas emissions, so the only way forward is to invest in a long-term strategy to improve soil health.

The former senior EU official effectively said farmers should forget about increasing the pot of funds in the next CAP budget, given the wider financial demands elsewhere such as security and defence.

The IFA’s chief economist Tadhg Buckley on Tuesday suggested there is increasing speculation that the EU Commission will propose a major reform of how it allocates funds to member states in July.

The drawback, according to Buckley, is that it would effectively mean no dedicated agri budget allocation, which could bring more risk into guaranteed funding and potentially give more power to local governments.

The IFA economist suggested a simpler, more targeted and future orientated CAP was the way forward, alongside a separate environment budget.

IFA president Francie Gorman didn’t leave a tooth in it when he suggested proposals to scrap the CAP budget and replace it with a single fund, rather than a designated fund with no allowance for inflation at farm level, would devastate the sector. He said it would damage confidence in the entire EU project.

In a strongly worded address at the start of the meeting, Gorman said he will be in Brussels protesting alongside COPA and ICOS next week, to put food security front and centre.

Northern Ireland

Meanwhile in Northern Ireland, farmers have been hit with a hammer blow, as Nutrients Action Programme (NAP) plans to drastically cut phosphorus surpluses on farms were revealed last week.

If enacted, the move will have hugely significant consequences for the future viability of Northern Ireland farming, especially dairy farming. The NAP impact on dairy co-ops such as Lakeland and Dale Farm would be hugely significant.

The long and short of it is the Northern Ireland department of agriculture is saying that between feed and fertiliser, there is surplus phosphorus on land and it is getting into waterways, reducing water quality.

The department has proposed rules which for some farms would effectively mean at least a 50% cut in stock numbers.

The move prompted Lakeland CEO Colin Kelly to say that it feels like the farming sector is planning with blindfolds on and one arm tied behind it’s back.

Essentially, the industry has been asked to fundamentally change how it operates inside a six month window.

The vulnerability for Lakeland Dairies, which sources over one billion litres of milk in Northern Ireland, is that it now places a huge question-mark over at least 50% of Northern Ireland’s milk pool.

Realistically, the options for Northern Ireland’s farmers are to cut stock numbers, acquire more land or export slurry. All are becoming more difficult.

High output system

Finally, cutting stock numbers in an already high output system means an effective immediate overnight income and margin cut.

Both moves show uncertainty for the future which undermines investment in the sector.

The stark reminder for farmers south of the border with the Northern Ireland moves this week is that being outside the EU doesn’t bring a ‘carte blanche’ to decision making on farm.

Inside or outside the EU, human health and safety issues such as water quality and greenhouse gas production are still seen as more important than food, despite predictions of less milk and beef output.