Ireland’s dairy sector is blue chip. Wages averaged more than €97,000 last year in the face of rising input costs. No other farming enterprise here commands that sort of return. The sector accounts for over €5 billion in exports and is the single largest component of our food and drink trade.
What makes it so profitable is the “value add” — the amount by which the value of a good is increased at each stage of production.
So when it comes to shouldering the burden of emissions cuts — agricultural emissions are due to be cut by 22-30 per cent as part of the State’s climate action plan — dairy advocates can reasonably argue that the focus of the cuts and the reforms should be, not exclusively but mainly, elsewhere.
Beef farming, for instance, is predominantly loss-making without EU subsidies and on a hectare-by-hectare basis more carbon intensive.
The great Guinness shortage has lessons for Diageo
Ireland has won the corporation tax game for now, but will that last?
Corkman leading €11bn development of Battersea Power Station in London: ‘We’ve created a place to live, work and play’
Elf doors, carriage rides and boat cruises: Christmas in Ireland’s five-star hotels
Dairy has one big Achilles heel, however: water quality. The counties that have soaked up the expansion in dairy, or pivoted more into dairy, since the lifting of EU milk quotas in 2015 — Cork, Waterford, Carlow, Kilkenny and Kildare — are the same ones that have experienced the biggest declines in water quality.
A senior Leinster House official said that if you were to overlay a map of dairy expansion since 2015 with a map of deteriorating water quality zones, they’re almost a match. The problem is the industry’s intense use of nitrogen-based fertilisers and/or livestock manure, which run off the land, polluting waterways.
This is aggravated by the fact that 7,000 dairy farmers enjoy a European Commission-approved derogation that allows them to use additional nitrate — up to 250kg of livestock manure per hectare. An Taisce is taking a legal action against the derogation.
Since the lifting of EU quotas in 2015, Irish milk output has effectively doubled to 10 billion litres while our dairy herd has swollen by a third to 1.6 million animals.
At the same time, the Environmental Protection Agency (EPA) has highlighted a big decline in water quality. The agency estimates that about half of Irish rivers and lakes are now failing to meet minimum environmental quality standards due to high levels of polluting nitrates and phosphates, most of which come from agriculture.
“Rivers such as the Bandon, Lee, Blackwater, Suir, Nore, Barrow and Slaney have high nitrogen levels, with significant implications for the marine environments they flow into,” the EPA said in a recent report.
This is a well-worn path internationally. New Zealand, Ireland’s dairy Doppelgänger in the southern hemisphere, went on a similar expansion path in the 1980s and 1990s, which exacted a big toll on water quality there. The Netherlands has just recently been forced to cull part of its dairy herd while imposing strict phosphate quotas on dairy farmers — a source of controversy — in response to a rapid decline in water quality there since the lifting of EU quotas.
EU policeman
If Ireland’s water quality does not start to improve by next year, the European Commission will begin cutting the levels of nitrate that farmers here can spread on the land. Not for the first time, the EU will act as policeman for the Irish environment.
This is the backdrop to an intense debate going on at Cabinet level, one that has been overshadowed by the recent surge in inflation and the cost-of-living squeeze. On one side is Green Party leader and Minister for the Environment Eamon Ryan; on the other is Minister for Agriculture Charlie McConalogue.
Ryan wants deeper emissions cuts, above the 22 per cent lower bound limit specified in the State’s climate plan, while McConalogue is resisting on the grounds that the 22 per cent will involve significant challenges and cutbacks in itself. Both are under intense pressure, from environmental NGOs on one side and farming organisations on the other.
When the State’s climate plan was finalised last year, a report by consultancy KPMG suggested agricultural emissions cuts above 21 per cent would require a reduction in the national herd. Talk of reducing herd numbers tends to elicit strong reactions from farmers, who already feel squeezed by the drive forever cheaper food.
At first the Government was vague on the issue, talking about “stabilising” herd numbers. But more recently, Ministers and rural TDs have been more forthright, confidently stating there will be not cuts to herd numbers.
But here’s the rub. Implicit in the State’s climate plan for agriculture is a reduction in the allowable use of fertilisers, a move that will reduce the number of cows dairy farmers can maintain on a given piece of land.
“We estimate that the change in the nitrates levels being proposed by the Government will see the middle strata of Irish dairy farmers — the people on 50-odd acres with 80-odd cows — having to lose at least 25 per cent of their herds,” says the Irish Creamery Milk Suppliers Association.
So while Ministers promise no cuts to the dairy herd, the State’s strategy will do it indirectly. This verbal sleight of hand is now dawning on farmers and there is considerable disquiet. Agriculture was always going to be the trickiest element of Ireland’s climate equation, and so it is proving.
