Mr. Bill Callanan:

It is a big challenge. It is impacted upon by world grain prices having been poor for the past couple of years. There will undoubtedly be rebalancing of demand. For example, even the price of straw has gone through the roof this year as a recognition that home-grown grain is a valuable component of agriculture. We produce over 2 million tonnes of grain for the feed industry nationally so it is a very important sector economically and makes a positive contribution in respect of the environment. There will be challenging years ahead. I would not disagree that a number of tillage farmers are unable to effectively pay the rents that seem to be payable from the dairy sector but, that said, a number of measures were specifically aimed there. The tillage sector is hugely dependent on rented land and the lease arrangements with regard to the tax treatment of that has led to many more leases rather than short-term rentals for that sector. Approximately 50% of the land area for tillage is subject to rent rather than ownership. That lease arrangement has become very popular and valuable to the tillage sector as a consequence. Equally so, with regard to access to finance, the drawdown of the low-cost loan facility that was announced by the Minister last year has been proportionate to the level of indebtedness of the sector, so the sector has availed to that to an extent we would expect. It will continue to be challenging. If we focus on value added, etc., through distilling and malting, and products such as Flahavan's Progress Oatlets, that has been an important opportunity for tillage farmers, but there is no doubt that it will remain challenging.

Senator Mac Lochlainn asked about the science involved. We have a significant research budget which applies to the area of climate challenge. Over €17 million has been spent in the last ten years on research projects focused on this. We read about the ambitions regarding seaweed and other things as possible additives. From our perspective, it gives confidence that an additive works but naturally, with anything like that, one has to be conscious that we are producing a food product and therefore a level of scrutiny is needed to give comfort that the end product is not impacted. There was a scare a number of years ago about an additive that is used in fertiliser in New Zealand, dicyandiamide, DCD, which was applied to land to reduce emissions and was found in minuscule levels in the final dairy product, leading to reduced consumer confidence. As a major exporting nation with a particular emphasis on baby formula production, this is something that has to be avoided. One has to be particularly careful with interventions. Speaking to somebody from the Dutch structural system last year, he said that it has a policy of "don't mess with the cow" as an underlying safety check to ensure that no difficulties are created.

On the matter of biofuels, we are a net importer of feed here so, unlike some international countries which have a much larger tillage sector, there is less availability of feed outside our own usage or our usage for distilling and brewing for biofuels and such. We have less dependence on alternative crops such as oilseed rape compared to other countries, for example, the UK, where alternative crops might represent 25% of production. It is less than 10% here. Our system of tillage and cereals production does not favour a significant biofuel industry as a consequence.