Stack or sow tillage choice
Opponents of decoupling will be quick to interpret the 33% drop in early sowings of winter barley as a disastrous result of the EU decisions, to decouple arable aid payments, and to enable many growers claim their full arable payments on only 50% of the land they farmed three years ago.
The FAPRI-Ireland Partnership of Irish and US economists had predicted a fall in the value of the Irish cereals sector of just 4% due to decoupling (by 2012).
Now, “prophets of doom” will be questioning FAPRI-Ireland’s predictions for the other Irish farming sectors. Compared to the average of 2000 to 2002, they predicted falls in the value of farm production by 2012 of 6% for livestock, 14% for milk, and 4% for crops.
An overall decline in value of farm production of 8% was foreseen.
However, they were making their calculations long before the “stacking” concession in decoupling was clarified earlier this year.
Stacking enables a farmer with 100 hectares of grain, of which 50 hectares is rented, to discontinue production on all or part of the rented area, while remaining eligible for the decoupled single payment on the entire 100 hectares.
With 41% of the national tillage area leased annually, and a further 10% leased for terms of three years or more, Irish tillage farmers this year faced a critical decision - how much of their rented 170,000 hectares should be planted in 2005?
“The clear advice is that if the value of the grain and straw does not exceed the rental price and the cost of producing the crop, serious questions must be asked about continuing to grow grain on rented land”, said Teagasc Tillage chief adviser Jim O’Mahony earlier this year.
“The consequences of not stacking are that the grower must continue to rent land until 2013 in order to draw down the full single farm payment. However, if land is stacked in 2005, there is no limit on the area of grain which can be sown in 2006 and subsequent years, at re-negotiated rental prices,” he said.
“Farmers should think twice before growing a crop on poor quality land, or on land that is too costly to rent. Remember, this land will deliver a payment of around €375/hectare (€150/acre) with no crop. What must be avoided is that the single payment is used to finance the cost of growing a crop on unsuitable land,” he warned.
“The bottom line is if land which is rented is not capable of yielding up to 10 tonnes/hectare (4 tonnes/acre) of winter wheat or up to 7.5 tonnes/hectare (3 tonnes/acre) of spring barley, the economics of continuing to grow crops are doubtful.”
Meanwhile, the grain industry will be hoping that the first estimations of planted acreages will improve dramatically, boosted by the fine early November weather conditions.
