Innovation the key to a better future in Irish dairy farming

The agriculture industry faces continuously changing markets with external and internal forces compelling those involved in the industry to adapt to ever altering scenarios.

Economic pressures continue to be one of the driving forces in the need for adaptation on farms. Policy developments throughout the last few decades — most specifically, sustainability and environmental neutrality — have placed increased financial and technical pressure on agricultural production and producers.

The commercial and environmental context in which we farm and milk our cows has changed and it’s likely that the pace of change will actually pick up; to say that we will have to change too — to innovate — is to do no more than state the obvious.

We are told that the sector will inevitably move towards fewer dairy farmers milking larger herds in a way that maximises economies of scale. It seems to me at least as likely that the drive to innovate must result in developments that will actually to some degree offset ‘traditional’ economies of scale.

One identifiable trend in other sectors affected by the drive to sustainability and environmental sensitivity is a rediscovery of the idea that ‘bigger’ is not necessarily ‘better’ and the drive towards micro-innovation that would give, in our case, medium-sized milk suppliers all the innovative tools that might enable them to flourish in the markets post-quota.

Whether the drive to innovate propels us into bigger operations or whether it enables us to keep medium-sized dairy farms is something we will discover over the next decade. But one thing is certain as of right now: Those who stay in the production of milk in Ireland must learn to innovate.

As with any other commodity, dairy products face the potential for increases and decreases in demand and supply and, as a result, changes in their value on world markets. Most of the external issues facing the Irish dairy sector such as price and demand cannot be controlled at the micro level.

So it is important to examine the factors which farmers can control and the degree to which changing accepted practice — in other words, innovating — can help us to control those factors which are within our control as price takers.

Farmers intending to expand milk production post-2015 will incur expansion costs such as increasing herd size, investing in new infrastructure and possibly, the purchase of additional land. Furthermore, milk quota abolition in 2015 may result in reduced milk prices. Effective management post-2015 will be vital to ensuring farm profitability and the reality is those two words ‘effective management’ will increasingly come to mean understanding a single word, ‘innovate’.

In my position as President of ICMSA, I have met thousands of farmers over the years and long ago I went ‘on the record’ with my conviction that Irish farmers, particularly the younger generations, must now be considered as global leaders in terms of technical skill, commitment and comprehensive understanding of sustainability.

The ability of our members to understand the dynamics of innovation will either support my contention or challenge it. For my own part, I’ve never been more sure that we can and will innovate our way to a great future.