Complete loss of derogation could 'reduce dairy income by up to €23,000' a year, IFA warns
Faced with the challenges that come with having to comply with new nitrates rules by the end of this year, farmers are already fearing a loss of the derogation altogether post-2025.
Ireland's largest farm organisation has warned that a complete loss of Ireland's nitrates derogation would have "massive ramifications" for the agriculture sector.
The Irish Farmers' Association has said that its analysis estimates that this year's reduction to the maximum stocking rate from 250kg of organic nitrogen to 220kg "will have a cumulative sector cost of up to €60m per annum".
Faced with the challenges that come with having to comply with new nitrates rules by the end of this year, farmers are already fearing a loss of any derogation post-2025.
In his submission to the Oireachtas Joint Committee on Agriculture, Food and the Marine as this week's meeting gets underway, IFA president Francie Gorman has said his organisation estimates that the "removal of the derogation entirely would reduce dairy income for the impacted farmers by an average of up to €23,000 per annum".
This would be a "huge drop given that average dairy family farm income for the last five years was about €87,000 per annum", the Oireachtas committee was told on Wednesday.
"The wider economic impact of the derogation would be even more significant. Using Dairy Industry Ireland analysis of the economic contribution of the dairy sector, IFA estimate that a loss of the derogation could result in over 1,100 job losses and a potential economic impact of over €1bn per annum when all direct and indirect factors are accounted for," Mr Gorman said.
"Some mistakenly think this is only a dairy issue. In reality, any changes to the derogation impact all land-based sectors given the hugely disruptive impact it has on the land market.
"In the cases where drystock and tillage farmers do manage to retain rented or leased land, this is generally coming at a higher cost."
The IFA estimates that the removal of the derogation would result in dairy farmers requiring about 86,000 hectares just to maintain their current dairy cow numbers.
This additional land requirement is not factored into Climate Action Plan targets, Mr Gorman said.
While an estimated 3,000 farmers are directly affected by the existing reduction to 220kg of nitrogen per hectare, another 7,000 farmers are estimated to be directly impacted if stocking rates were capped at 170kg, the IFA said.
"IFA estimate that approximately 55% of milk supplied comes from farms stocked above 170kg. If these farms had to reduce milk output, this would result in increased costs and job losses at processing level," Mr Gorman said.
"The removal of the derogation entirely will jeopardise the viability of thousands of farmers across all sectors.
"This would have a huge knock-on social impact on rural Ireland."
Agriculture committee chairman Jackie Cahill said that the decision last year by the European Environment Commissioner to reduce the derogation "was met with disappointment across the Irish agriculture sector, including by this committee".
"We are all committed to improving Ireland’s water quality in line with the objectives of the Nitrates Action Programme and Irish farmers have made huge efforts in this regard," Mr Cahill said.
"Genuine concerns exist among farmers at this decision by the EU Commission and how compliance with the maximum stocking rate of 220kg organic nitrogen will impact them.
"These include the economic and social effects on farms and farming families, whether the Nitrates Action Programme is fit for purpose in terms of improving water quality, and if additional supports and resources are required to ensure farmers can be compliant with the action programme."
