Mr. Colm Hayes:

The area of land farmed organically in Ireland is still extremely low when compared to other EU member states, as the committee discussed earlier, with our average lying at 1.8% compared to an EU average of 7.5%. There is a commitment in the programme for Government to achieve this EU average in the lifetime of this Government and we are working extremely hard to achieve this. This is also part of our commitment to achieving the goals of the EU farm to fork strategy and the European Green Deal. I will speak to the policies and supports on this shortly.

Organic farming is, of course, not just a market issue. It is also a key driver of our environmental targets for the agriculture sector. Our analysis of the level of climate benefits derived from the conversion to organic farming indicate that, due to the elimination of chemical nitrogen fertiliser and a 10% decrease in the stocking rate on organic farms, a corresponding reduction of 0.1 megatonnes of CO2 equivalent per annum for every 100,000 ha could be achieved. This is very important as we continue to develop a revised climate action plan. There are also significant biodiversity and water quality benefits to organic farming, which will also contribute to national targets in those areas.

A significant part of our work to achieve our organic goals will be the full implementation of the national strategy for the development of the organic food sector, which the committee discussed earlier. The sector strategy group, which was established in 2018, was tasked with developing the strategy for development up to 2025. It published its report in January 2019. The strategy group comprised a wide range of representatives of State bodies, farming organisations, organic control bodies and a wide range of other stakeholders. The strategy sets out measurable strategic objectives for each subsector and incorporates actions considered essential to further support the industry’s development. The strategy includes targets and actions across all subsectors, to be achieved by 2025. It has also 27 cross-sectoral actions. The implementation of this strategy is an overarching priority. It is critical to the further development of the organic sector in Ireland.

There is a dedicated implementation group to monitor the implementation of the strategy. This comprises the bodies and organisations to which a lead role has been assigned, including the Department, Teagasc and Bord Bia, all of which are represented by witnesses here today. A meeting of the wider strategy group also took place in the first quarter of this year to review progress to date. We publish quarterly updates on our website and we will arrange to submit these to the committee for its information.

The Department has a wide range of supports for the sector, including three specific direct supports. These are the organic farming scheme, the organic capital investment scheme and the organic processing investment grant scheme. In addition to these, we also have specific avenues of funding for registered organic farmers. They can also access most environmental and other schemes available to conventional farmers.

As for the three main supports available to the sector, the organic farming scheme is the key support. There are currently 1,530 participants in the scheme, which has a budget of €14 million in 2021, up from €10 million last year. The organic capital investment scheme provides support specifically for organic farmers for investment in buildings and machinery. This is paid at a rate of 60% for qualified young farmers and 40% for others. Total expenditure on that scheme last year amounted to €512,000. The Minister of State, Senator Hackett, also recently reopened the organic processing investment grant scheme. This provides grants to organic processors who wish to invest in developing facilities for the processing, preparation and packing of organic products. The maximum grant aid payable is now €700,000 per applicant over the duration of this scheme, which now covers the period up to 2022. This increases the overall ceiling for each organic processor by an additional €200,000 over the duration of the scheme. The total funding for this scheme for this year has increased by €500,000 and now amounts to €1.2 million.

I will now return to the main scheme, the organic farming scheme, which is the real driver of expansion. This was reopened in March of this year by the Minister of State, Senator Hackett, who secured extra funding of €4 million in the budget for this year to do so. A total of 317 applications were received and we expect to be able to accommodate all of them.

With the reopening of the organic processing investment grant scheme, together with the reopening of the farming scheme and the capital investment scheme, we are delivering on the Department’s action plan targets for 2021 to further support and develop the organic sector. We are not stopping here. The Minister of State has indicated that, subject to available funding, the scheme may be reopened for 2022, which could happen in the autumn of this year. This is, of course, subject to the budget discussions in the autumn and the availability of funding.

To turn to market opportunities, while the area under organic production has increased, production patterns are still not fully aligned with market opportunities, as the previous witnesses outlined. The aim of the national strategy is twofold. It aims to increase land cover farmed organically while aligning it to market opportunities. Most organic farmers are engaged in beef or sheep production with a relatively low number engaged in tillage and dairy. Bord Bia research shows that the categories with the greatest growth potential in the domestic market are fruit, vegetables and dairy.

While a large proportion of the organic tillage crop is dedicated to oats, there is still insufficient supply to meet demand. Growth of the dairy, meat and aquaculture sectors is also impeded by the insufficient supply of organic cereals and proteins. This deficit in supply necessitates imports, which increase costs of production and therefore affects competitiveness.

It is vital that we ensure the development of production of organic food products is in line with market requirements and consumer demand. This will be the key to the long-term sustainable growth of the Irish organic food sector. The scheme, which opened in 2018 and again in 2021, is targeted mainly at those areas of production which are currently in deficit. These new entrants will assist in addressing these imbalances. The Department believes that there is a role for every farmer in the organic farming scheme and that there are significant opportunities for growth in the export market in particular for beef and lamb. Bord Bia is assisting in developing markets for exporters.

Within the organic strategy, the lead role for the overarching cross-sectoral action of market identification and activation is assigned to Bord Bia. Funding of €300,000 has been provided by the Department to Bord Bia for its organic marketing plan for this year.

Looking to the future, as outlined, the Department and the Minister of State, Senator Hackett, are extremely ambitious about the growth of the Irish organic sector to meet the programme for Government commitments. There are a number of drivers which will help to achieve this but, as other witnesses said, it will require all links in the chain collaborating, from the primary producer through to the retail and consumer sectors.

Our main priorities in this area for the rest of the year will include continuing support to the organic sector from primary producers through to processors under the existing support schemes. It will include the development of a significantly enhanced organic farming scheme to be delivered under the next Common Agricultural Programme, CAP, from 1 January 2023. Work is ongoing on this, as is engagement with stakeholders through the CAP consultative committee and other forums. Implementation of the national organic strategy remains a key priority, with a particular focus on the development of the marketing strategy for Irish organic output, both domestically and internationally. As previous witnesses have outlined, a key point is working with farm advisory services to ensure that farmers receive the best, most up-to-date advice if considering the conversion to organic farming.

There is a significant EU element to all of this work, both within the EU organic action plan and the European Green Deal. The Minister of State, Senator Hackett, is particularly active on this and has discussed it with Commissioner Timmermans at many recent forums. We expect that this engagement with the European Commission about both the development of the next CAP and the implementation of the organic action plan and the European Green Deal will also be significant drivers of improved organic land cover here.

I thank the Chairman. The targets for the development of this sector are ambitious, as has been acknowledged, but we firmly believe that they can be achieved. No effort is being spared but it will require a collaborative approach with the appropriate level of investment. We are pleased to take any questions that the committee may have on this or to discuss any aspects.