Advice for dairy farmers: Contract rearing or organic are alternatives

Most Irish farmers will have to depend on the traditional farm enterprises for their main income.

It is unlikely that there will be any great new enterprise developments in the near future.

Fortunately, there is great scope for growing and improving the efficiency of existing enterprises.

Improvements in animal health and breeding, together with new developments in grass and clover technology, will be very beneficial.

However, alternative enterprises such as contract rearing or organic production might suit some farmers.

Contract rearing

Contract rearing of replacements for local dairy farmers or for export is likely to provide an alternative system of farming in some areas.

This system of farming has advantages over many traditional dry stock systems.

These include:

* Reducing the investment risk involved in dry stock farming;

* Facilitates part-time farming;

* No time spent in buying and selling stock;

* Good cashflow, as the rearer is normally paid by direct debit monthly;

* Likely to be more profitable than some other dry stock systems;

* Provides a guaranteed income if targets are achieved (legal contract).

Contract rearing isn’t the only farmer-to-farmer business worth considering.

Direct selling of grain and other crops such as maize, whole crop, and fodder beet, is likely to provide an alternative sales outlet for other farmers.

Organic production

There has been a huge push toward organic production in the past few decades.

Teagasc has been very involved and millions of euro have been spent developing and promoting organic produce.

Teagasc has been supportive of organic production and has appointed organic advisers and a series of trials and upskilling of staff have been carried out.

Despite claims to the contrary, organic food has little or no health benefits to offer over freshly produced non-organic Irish food produced under similar conditions and within normal health and food safety regulations.

There will always be a limited market for organic food in Ireland and it is desirable that it should be supplied by home producers. However, organic produce will always be only on the fringes of Irish agriculture unless a significant export market can be developed.

Many organic producers are small-scale part-time farmers.

In recent years the organic sector has got a much needed boost with the launch of an action plan to drive the development of the sector.

If the organic sector can develop an export market for its products and get a slice of the multibillion-euro EU organic market, it will give it a much-needed boost and an opportunity to grow, but continued favourable treatment from CAP/government schemes is essential.

There has been huge growth in organic production in France in recent years with the help of large government support.

Land area in organic production in France doubled between 2007 and 2012 to 3.8%, with 36,000 operators.

The French government has set out a plan to again double the area in organic production by 2018.

The earliest adopters of organic production were in Sweden and Denmark and Finland, but the number of organic farms in these countries has declined.

Some 80% of the total organic food spending in the EU is in Germany, France, Britain, and Italy.

The first essential for successful changing to organic dairy farming is that farmers are already very efficient non-organic farmers, and that they can grow and manage clover swards successfully.

Unfortunately, some of the people who went into organic dairying did so because they were not very successful at non-organic dairying.

Others changed because they strongly believed in the concept of organic production.

Organic dairy production is much more expensive than conventional dairying, and a decent price premium is required in order for it to be profitable.

Farmers get paid a very good premium for five months, including the winter period. Therefore predominantly autumn calving is required for optimum profitability.

Fortunately Irish farmers have a good outlet for organic milk through Glenisk which is a very progressive company with an excellent range of products.

A major barrier to organic expansion is that the extra cost of production is not always reflected in the prices charged in the super markets for organic foods.

As regards other organic enterprises such as sheep and cattle, they are easier than organic dairying. As most of Ireland’s sheep and cattle are finished off grass, they are already the nearest thing that can be got to organic.

Cheese

It is great to see Irish farmhouse cheeses winning awards internationally.

Farmhouse cheeses has been among the most successful enterprises developed over the past few decades to enhance farm incomes.

This is a growing business, but nevertheless will always remain in the hands of only relatively few specialised producers.

Forestry

Ireland has a relatively small proportion of its land under forestry, despite some huge grants and incentives being put in place in the past few decades.

Except for very poor land areas which have no potential for growing food or feed products, I think forestry is not a good use of land.

However, forestry has a positive effect on greenhouse gas emissions, which will be beneficial nationally.

Income from forestry is very dependent on grants and subsidies, but it is more profitable than most dry stock systems and it has relatively low labour requirements.

Many farmers have put some of the poorer parts of their land into forestry during the past few decades and the resulting EU payments have provided some very useful farm income.

Biofuels

Primary biofuel production is unlikely to have much of a future in Ireland.

Secondary biofuels involve the manufacture of biogas or electricity from a wide range of raw materials, including slaughter house and other waste, grass silage, and specialised crops such as elephant grass.

Secondary biofuel technology is at an early stage of development, and there are continuous improvements with technical developments and a range of raw materials.

Secondary biofuels promise to provide greater environmental benefits than primary biofuels, when they are fully developed.

Some experts believe the production of biomass does hold some huge potential for Ireland if there is a rethink by the Government to give it proper support and plans for conversion into energy.

Biomass crops could be a very good alternative tillage crop as well as providing a significant national reduction in green house gasses.

Ireland currently imports huge amounts of biofuels to meet current targets.

Unless there is a change in policy, there will be massive increase in these imports.

Fracking

Fracking, which extracts gas from shale, has made a huge contribution to energy supplies in the US.

As a result, it is forecast that the US will be self-sufficient in energy supplies in the not too distant future.

There is evidence that Ireland has a good supply of shale gas, but environmental concerns are likely to delay the development of its extraction.

However, with new and improved technology this could be a valuable source of energy for Ireland in the future.


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