Professor Alan Matthews:

Although I agree that policy has been an important driver of agricultural developments, it is important to remind the committee that in looking at the sectoral breakdown of Irish agriculture, dairying is probably the only profitable sector of Irish agriculture when we strip out the subsidy transfers from the Common Agricultural Policy, CAP. Market forces have largely driven the expansion of dairying once the milk quota was removed and that is important to bear in mind.

My objective is not so much to target beef and dairy, which, as I said, will be the mainstay of Irish agricultural production for quite some time, but rather to target the emissions in the climate sense and the negative impacts on water quality and biodiversity. We need to send signals to farmers that they cannot just produce food and ignore the environmental impacts. If we could try to integrate these environmental damages into farmers' decision-making, we would move quite a long way towards a more sustainable animal sector. It is, of course, the case that elsewhere in Europe, much animal production is based on cereals that could be used for human food production but that is not fundamentally the case in Ireland. We are using grass which we would not be able to consume ourselves.

My view would be to emphasise the need to address the negative outcomes and to put a price on these as some kind of signal to farmers that they need to take these into account. They cannot exceed the environmental boundaries that are real, and the herd numbers will have to reduce in order to achieve that. The focus should not be on the herd numbers themselves. It should be on preventing the environmental damage that arises from that.

In terms of the just transition, which is obviously a hugely important issue, I would point out that there are very significant supports that go to agriculture which are not necessarily targeted in the most sensible and effective manner. Why do farmers in certain parts of country get much more per hectare than farmers in other parts? Linking payments much more to the environmental services that particular farms provide should be a principle guiding, in particular, the way in which we use our CAP funds in the coming period.