Tom Barry (Cork East, Fine Gael) | Oireachtas source

For a milk price of 28 cent per litre, that puts the average farmer at a 5.1 cent margin. I can tell Dr. O'Dwyer - Deputy Deering mentioned this earlier - that there is a lot of paying off for in-calf heifers of €2,500 with a net profit of 5.1 cent per litre. One could get to the fifth lactation before one would see anything. I got out of milk in 1991 - one could guess my age based on that - but it was essentially £1 per gallon at the time, which was the equivalent of 28 cent per litre. To think we are talking about that same price 24 years later is quite scary. While I am absolutely for increased production and am absolutely for driving on, we need to be sure we are doing it on a sound economic footing. I wonder if that is being spelled out strongly enough in our agricultural colleges. I really believe that youth is a great asset, but it needs to come with a health warning.

Dr. O'Dwyer mentioned increases in dairying, but where is the land going to come from? I sure as heck will not start milking cows; I could not even try. Mind you, if tillage keeps going the way it is going, it might be difficult. I wonder whether it is going to come from beef, from tillage or from land that is currently idle. There is not much of that around. The interest costs for people investing were mentioned. A cent per litre is quite high. Is Teagasc encouraging forward selling and is it doing enough to teach people the basics of soil science? I have an opinion about soil science; I believe it is the start of it all. If the basics and the soil are not correct, one is on a hiding to nothing. There are many people who walk out on the land and are not able to identify a weed or proper pasture, or who do not know the basis of the soil their grass is growing on. It is quite frightening to hear that only two thirds of soil in Ireland is at optimum capacity. It is no wonder some farmers are getting 15 tonnes of grass per hectare and some are only getting seven. How can one expand if one is on eight or nine tonnes per hectare? It makes no sense.

I agree with the witnesses that rural development should not be driven by schemes. I believe many of the schemes exist to flatten out the curve of production costs. In the past there was a gallop to collect every bit of money we could in schemes, including the beet payments, which got rid of the sugar industry. We saw where that left us. Averages are misleading. There was an AIB farm representative one time who had a great saying, even though it was slightly rude: "If your head was in the fridge and your tail end was in the fire, the average would be good, but it would not be a great place to be." Averages should be given with another health warning.

The witnesses mentioned land in New Zealand and appreciation of the land, but this shows that the funding is probably not coming from the right area. It is not coming from farm families; it is probably coming from the larger industry. Could he elaborate more on diversification, an area I am very interested in, in that smaller farms will probably need to diversify while they keep farming? In the last budget, income averaging was increased to five years, but this also incorporated off-farm income, which is very important here. What cow numbers would Dr. O'Dwyer suggest are needed to be lucky at that? Would it be 80 or 100 cows? I know it is all variable on price, but from a strictly financial point of view, it strikes me that a price of 40 cent per litre, even though it might sound large, is what this country needs to facilitate sustainable investment and allow monies to be put aside for reinvestment. The cost of production is increasing hugely, which is a worry. While we saw Saudi oil prices drop this year, the cost of fertiliser increased. For sustainability in this industry, what is the ideal herd size?