Mr. Martin Keane:

I thank the Chairman for affording us the opportunity to share our thoughts and experiences with the committee. I thank the members of the committee also. As the Chairman said in his introduction, with is Mr. T. J. Flanagan and Mr. Eamonn Farrell. The co-operative movement has been very active in responding to the difficult weather conditions experienced by farmers over recent months. A fodder shortage developed along the western seaboard last autumn. Certainly, it was well before Christmas. Many of our farmer-owned co-operatives were at the forefront in sourcing and transporting fodder for farmers in these counties. In many cases, livestock was housed from August on and farmers were unable to preserve adequate levels of fodder for the winter period. Fodder was transported from east to west by co-operatives to help alleviate that situation.

As 2018 unfolded, the late spring resulted in a serious fodder crisis emerging nationally. As Professor Boyle suggested, normal grass growth failed to materialise due to wet and cold conditions which persisted well into late spring. Land was saturated and it became impossible for stock to be allowed out. Cows which would normally be on grass in March and April were housed day and night. Milk collections were down in March and April with protein levels affected. The co-operatives were very cognisant of the fact that cow condition may have suffered also due to the level of protein in the milk, with resulting challenges as they approach the breeding season and possible fertility challenges on farms. The entire period was an extremely stressful one for farmers and farm families. Most of their waking hours were occupied with concerns around acquiring feed for animals. The mental strain of this crisis on farmers and their families cannot be underestimated.

As the poor weather conditions worsened around the Easter weekend period, a decision by co-operatives to import fodder became inevitable. A measurable tightening of supply became apparent as farmers who might have been in a position to sell fodder previously could no longer afford to do so as their own fodder situation became a concern. Co-operative societies, both dairy and mart, have imported approximately 18,000 tonnes of fodder consisting mainly of hay and haylage from the UK and alfalfa from the Continent. In addition to importing fodder, co-operative members undertook a number of other actions. Co-operatives sourced and transported significant volumes of fodder within the Republic and Northern Ireland. They facilitated the transfer or matching up of fodder between their own suppliers. Some farmers would have had supplies in excess of what they required while others were not in that position. Co-operative farm advisory teams worked very hard with farmers to identify fodder requirements and to develop appropriate fodder regimes to stretch out existing stocks.

This was consistent with the message from Teagasc and others that taking early action could alleviate some of the worst effects by stretching out the availability of roughage and extending feed rations. Co-ops made ruminant feed available at discounted prices, and kept prices low even though ingredient costs rose substantially over the period. Co-op mills operated 24-7 over past two months, an incredible endeavour by all the people involved in the process. Critically, co-ops applied flexible and reasonable approaches towards credit to members throughout the crisis and that will continue into the summer. This will be seen on co-op balance sheets as we go through the summer.

We acknowledge the support provided by the Minister, Deputy Creed, and the Department of Agriculture, Food and the Marine towards the cost of importing fodder. The contribution by the Department was necessary to reduce the extra costs involved in sourcing and transporting fodder from abroad. Despite the contribution by the Department, many of our members have borne a significant increased cost by importing fodder. It is critical that the entire allocation of €1.5 million promised by the Minister is made available to the co-op sector.

ICOS also welcomed the changes made to the national fodder scheme, reducing the minimum distance requirement of 50 km instead of 100 km. The scheme worked better when that change was made. The derogation from the three-crop rule for the tillage sector was a further welcome decision.

In the immediate term, cash flow on farms is a real and pressing concern. In budget 2018, the Government committed to the delivery of a new low-cost loan measure for farmers. This must be introduced as quickly as possible.

Earlier today we had the privilege of being at the national roll-out of the milk flex announcement in partnership with co-ops. It is another significant development by the industry to make available funds that are flexible with the volatility of the milk market. The repayments will be flexible with that as well. It is very welcome that the milk flex scheme has been introduced nationally.

ICOS firmly believes that the past two budgets missed the opportunity to introduce a taxation measure to defer income in a good year in order to draw it down in a bad year. ICOS representatives met Department of Agriculture, Food and the Marine officials on several occasions to discuss this in the past two years. There was significant goodwill towards this measure. If this measure was in place, it would have been available to farmers this year to deal with the significant added costs associated with the long winter at a time of increasing market volatility. Prices have been dropping over the past six months and the co-ops have cushioned their members to a great extent, while co-ops in Europe reduced milk farm-gate prices by 7 cent, 8 cent or 9 cent. It is only now that our co-operatives are reflecting the real market returns. They have cushioned their members over recent months.

The Department of Finance has announced a public consultation on agri-taxation which will run until 25 of May. I urge members of the committee to support the inclusion of an income-stabilisation measure in budget 2019.

In addition to cashflow, other practical issues have arisen due to the adverse weather on farms going back to last autumn. As Professor Boyle mentioned, these issues will impact on the ability of farmers to conserve fodder for the coming year. In this regard, we welcome the establishment of a co-ordination group by Teagasc, to develop the necessary technical advice for farmers who need to replenish stock.

We need to avoid similar problems in the future. ICOS calls for a detailed assessment of fodder needs to be carried out on farms after the harvest to identify any shortfalls that may arise in spring 2019. We know that extreme weather events are becoming more frequent. The farming community has suffered from a similar fodder crisis in 2013. Recently Storm Ophelia in late 2017 and Storm Emma in early 2018 caused enormous disruption to the country and especially to the farming community.

The industry and stakeholders must learn several lessons, including the adoption of more risk-averse strategies, such as carrying greater fodder reserves from year to year. We must learn from this episode that in an ideal world and when things are really good, February is an option in some parts of the country for early turnout, but in many years that may not materialise. When it does not, farmers who only budget for fodder to mid-February or mid-March have a huge crisis.

The fodder crisis and recent extreme weather events have shown the importance of the co-operative movement and its true value to farmers.

I welcome Professor Boyle's comments on having at least eight weeks' reserve. That is the key learning of the present generation from a previous generation that recognised it was essential to have a buffer of fodder available in the event of a very difficult year or late spring. We need to learn that message and need to drill it home. Teagasc, co-ops and all of us who speak to farmers regularly need to reinforce that message. I am not sure whether that will be achieved coming out of a very difficult year, and whether the timeframe will allow for a sufficient buffer to be built up. That will become clear over the summer months. As I said earlier, if we carry out an assessment of requirements in early autumn and we find there is a risk, we need to take action very early on to mitigate that risk.

I thank the Vice Chairman for giving us the opportunity. I pay special tribute to co-op boards throughout the country, their senior management and the staff on the ground for the massive efforts they have made in dealing with the fodder crisis and the extreme weather events. If it ever needed to be demonstrated, this clearly demonstrates the importance of the co-op movement to the farming community and to the fabric of rural society.