Land access is essential for effective dairy expansion

This year is the 50th anniversary of the iconic JB Keane play, The Field. This classic drama is still compelling for all of us, even as it enters its sixth decade.

Apart from the main plot, the play underpins what we have known for years — land is important.

For farming communities, land is a resource from nature. It carries crops and feeds livestock where these outputs help us to nourish the entire country and countries further afield.

The new 2025 Agri-Food Strategy will outline the key actions required to ensure that Ireland’s agri-food sector contributes strongly to job creation and investment in rural Ireland. It will build on the growth already being achieved by the food and beverages sector under Food Harvest 2020.

The dairy industry forms a key part of this ongoing expansion agenda with Irish dairy exports likely to increase by some €1.8bn over the next five years, from a current base of over €3bn. We currently export over 85% of all our dairy production.

With milk quotas gone, the opportunity for growth seems clear even if there is current volatility in the markets. Each farmer will choose the level of resourcing they need to establish a sustainable production platform for the future. However, one of the main obstacles they may face is that of land availability.

The issue of land ownership and transfer is an extremely complex question for many farm families.

A low level of land mobility in Ireland is one of the main structural challenges facing the dairy sector. Making it easier to access land is vital to allow dairy farmers increase their productivity levels.

Under no circumstances is ICOS saying that every dairy farmer should expand. Such a decision must be made by the individual farm family based on their own personal circumstances and only after careful consideration.

However, it is essential that we make it as easy as possible for those who do want to expand. In this regard, the lack of access to land is a critical issue, which can prevent farmers, and the wider industry, from realising their true potential.

The volume of land for sale in Ireland is marginal with less than 1% of the total land area in the country switching hands each year. In addition, much of the available land for sale is often fragmented and in small parcels. Critically, the purchase of land is too costly for the vast majority of farm families. The rental market is dominated by short term or conacre arrangements with 1m hectares of land rented in this manner on an annual basis. Nearly 54,000 farmers rent or lease land from other land-owners.

Practical and effective agri-taxation measures are crucial to support the expansion of the dairy sector in the years ahead. To date, this has included a new threshold for leases of 15 years or more, and the removal of the 40 years of age threshold for leasing relief.

Long-term leasing provides young farmers and new entrants, as well as existing farmers considering expansion, a cheaper way to access land on a long- term basis. With a long-term lease, farmers are incentivised to maintain and improve land quality.

Long-term leases also provide the farmer with greater security and greater access to credit which will enable sensible economic planning and expansion.

These measures have a number of practical benefits over the conacre system and they need to be promoted and endorsed by all stakeholders. Ideally this should also stimulate the release of larger blocks of land onto the market.

Family partnerships, share farming and share milking are additional options, which require careful examination due to their potential to promote land mobility and succession planning. Co-operation between farmers on joint leasing and working arrangements between land owners have a part to play.

The age profile of Irish farmers is increasing with only 6.2% of farmers under 35, while more than 25% are aged over 65 years of age.

On a worrying note, 50% of farmers over 50 years have yet to identify a farm successor. It is absolutely essential that farmers are provided with adequate information and advice on succession, inheritance and retirement planning.

Overall, we are in a transition period where the expansion opportunities that now exist must be underpinned by sustainable resources and input costs including the price of land.

* Jerry Long is chairman of the ICOS national dairy committee and a board member of Drombane Co-op


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