Stephen Cadogan: Can agricultural pollution be solved by paying farmers to retire?

Stephen Cadogan: Can agricultural pollution be solved by paying farmers to retire?
Over 400 pig farmers in the Netherlands have jumped at the chance to get out of the business, in return for a €455m payoff from the government scheme to reduce nitrogen pollution.

Could Ireland find €2.5 billion to pay the most intensive farmers to retire, because their businesses are deemed to be causing pollution?

That’s how much the Netherlands is paying livestock farmers situated near nature reserves, and 400 pig farmers, to retire.

Farmers here are bombarded by criticism for their industry’s 33% share of Ireland’s greenhouse gas emissions.

It’s one of the biggest of farmers’ several worries.

It’s even bigger than the Covid-19 damage to their markets, principally because of the restaurant lockdown reduced sales of food.

Such market shocks are commonplace in the food industry, and there’s an end in sight to the Covid-19 market disruption.

Brexit is a bigger worry, threatening 34% of food and drink exports that go to the UK.

But success in export diversification is reducing dependency on the UK, and there is always some hope that an EU-UK free trade agreement can be achieved.

A drought threatened to set back farmers back, but rain came in time.

In contrast, it’s harder to see how public pressure for climate and biodiversity action will develop.

It has been a headwind for many years, but farmers as usual brushed it off and ploughed on in their own furrow, with great results — an increase of nearly 50% in output of raw material for the food industry, agri-food exports, and value added production, since 2008.

Still, the sector is increasingly bad-mouthed by environmentalists, which farmers fear may turn the tide of public opinion against them.

They can see where that leads, by looking at the Netherlands, where the government is getting tougher with farmers.

The Netherlands, remarkably, is the second biggest food exporter in the world, but that cut no ice a few years ago, when the EU and their own government forced Dutch dairy farmers to get rid of 190,000 dairy cows (11% of the national herd) in 2017 and 2018, because of their runaway phosphorus fertiliser pollution from livestock manure.

Now, nitrogen and its effect on nature is the big worry in the Netherlands.

The Dutch Government has been forced to act by legal actions pursued by environmentalists, and imposed radical measures, such as stopping construction projects and farm expansion, and cutting the daytime speed limit on all roads to 100kph.

But an advisory council commissioned by the government, and headed by former Deputy Prime Minister Johan Remkes, says the government must double its nitrogen emission reduction targets, make them compulsory, and require the biggest effort from farmers.

It’s no wonder Dutch farmers feel there is a lack of respect for them in Dutch society, nor that they have been staging huge disruptive public demonstrations over the past year. Their German neighbours are also feeling the pressure now, as one of the main targets for environmental activists, who have sued the Berlin government over its failure to tackle harmful air pollution.

Farmers here may remember the warning 22 months ago by Phil Hogan, who was then the European Commissioner for Agriculture and Rural Development, at a dairy conference in Dublin, that the Netherlands is “a cautionary example” for Irish farmers. “Failure to act now will lead to negative consequences in the near future, potentially very negative consequences,” he warned.

Since then, there has been no let-up in the pressure on Irish farmers, No doubt many of them wonder if they will be closed down sometime in the future, for the good of the environment, even though nitrogen emissions in Ireland are less than half of those in the Netherlands or Belgium, and also behind the levels of Germany, Denmark, the UK, and Italy.

And we have the lowest premature deaths due to air pollution in Europe, except for Iceland, according to 2018 European Environment Agency data.

Nevertheless, if farmers feel unwanted, they might welcome opportunities to get out of the business.

That has happened in the Netherlands.

Their Ministry of Agriculture, Nature and Food Quality introduced a €180m scheme last January to compensate pig farmers who wish to leave the industry.

But 407 farmers applied to take part in the scheme. Many more were willing to end their businesses than the Ministry had anticipated, or than the amount of money available could accommodate. So the government has added €275 million of funding to bring the scheme up to €455 million, enough to accept all of the 407 applications that meet the requirements of the scheme.

This will result in 910,645 pig rights being withdrawn from the market (all of Dutch farming is now limited by rights; anyone who wants to expand has to buy livestock rights on the market, in a system which limits production like the EU milk quota did up to 2015).

The Dutch government also launched a €5 billion support programme to finance investments focused on nature restoration, and encourage farmers, industry, aviation, and shipping to reduce their emissions.

About €1.8bn of this fund will be allocated to agriculture to buy out farmers that work close to nitrogen-sensitive nature areas, and to encourage farmers to go “green”.

If Ireland could come up with over €2 billion to buy out farmers deemed to be causing too much pollution, there would probably be no shortage of takers.

Unfortunately, there aren’t too many billions sitting in the exchequer looking for somewhere to be spent.

Maybe the EU could come to the rescue of the environment by paying farmers to retire? It doesn’t seem so at the moment, with Agriculture Minister Michael Creed recently revealing that the current understanding is that the European agriculture sector will not benefit from funding under the Just Transition Fund.

The latest proposals from the EU Commission include a reinforced Just Transition Fund, with additional funding of €30bn, bringing the total amount to €40bn, to alleviate the socio-economic impacts of the transition towards climate neutrality in the most affected regions, as part of the EU’s Green Deal. But it seems farmers need not apply.

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