Mr. Hugh Farrell:

I thank the Chairman. The ICSA takes the opportunity to thank him and the committee for the invitation to appear on the topic of bovine TB eradication and to be back in the committee room. We really appreciate it.

The TB problem remains one of the most difficult challenges faced by all of the stakeholders in agriculture. For the past four years, the TB forum has provided a framework to chart a way forward. Obviously, the Covid situation has impacted the work. Nonetheless, the TB forum led to the publication of a national TB strategy. To some extent, the strategy remains an aspirational document detached from the practical realities of implementing a programme that is workable and fair to all. We are now working with the other stakeholders through a number of sub-groups of the TB forum.

The committee will undoubtedly be aware the Department is expressing concern at increasing costs for the programme. There is the reality that EU funding has been cut and is likely to diminish further. Our basic position is that all farmers must be treated fairly and that no farmer should be expected to carry an unacceptable financial cost towards the meeting of a national goal. We do not accept the proposition that farmers can be asked to carry more cost. The problem, as we have seen with Covid, is that measures to alleviate an infectious disease cost money and require public funds. The more draconian the measures, the more public funds are required.

To some extent, we are concerned that the subgroups of the tuberculosis, TB, forum are not working in tandem. Measures that hit farmers are being proposed at the implementation subgroup without reference to the finance subgroup. However, the problem for sucklers is that, in certain cases, the loss of a cow has a lifetime impact on the calf. The ICSA believes that the impact on the calf needs to be fully compensated for.

We have several key asks. We ask that on-farm market valuation is independent, reflects the real value of stock and is not subject to artificial limitations which deprive farmers of fair play. We ask that the hardship grants and income supplement and depopulation grants must also reflect real costs, particularly in the context of increased costs and stock values, and they must also treat the farmers the same whether full-time or part-time. It is completely unacceptable that more measures are being proposed to focus on cattle unless we have a comprehensive programme to deal with the undoubted wildlife elements of the TB spread. We have seen that badger culling has been a necessary part of making progress, but there is a need to ensure that the badger vaccination programme is used to improve data collection on badger infection rates.

The Department cannot continue to wash its hands of the deer problem. We know that deer infection rates are comparable to bovine rates. It is very frustrating that the only answer farmers are getting is to look for a licence to shoot deer. We want a proper forum to deal with the issues around deer and other State and State-sponsored bodies, such as Coillte, need to play their part as good neighbours. Any new proposals will only be acceptable as part of an overall package.

If the Department wants pre- or post-movement tests for cattle for fattening or in certain other scenarios, then there has to be an agreement in place for paying for this. Farmers already pay enough for the annual herd test and this principle must be respected. There are still problems with individual farmers who experience unacceptable delays in the removal of reactors. The ICSA has been totally opposed to herd categorisation or any other process which leads to the devaluation of a farmer’s herd. There was strong resistance to mart board information and the unfortunate incident with the letters last year did not help. Overall, the problem we see is that the Department wants to add considerably more burdens on farmers but is also trying to cut costs. We are all in favour of fast-tracking the eradication of TB, but this implies spending money today in order to eliminate spending at a future date. However, despite this, the cost of the programme is not escalating out of control. It has increased by 12% over the past four years, but that must taken in the context of significant dairy expansion.

The increase in dairy cows, compared to suckler cows, makes higher funding under the valuation scheme inevitable. Dairy cows that are culled due to TB have very little salvage value compared to suckler cows. Suckler cows usually are very valuable in a meat factory by comparison. Therefore, if we have more dairy cows, we have more cows where the salvage value falls well short of the on-farm market valuation.

However, dairy expansion and the related increase in beef exports has also delivered a massive increase in State receipts through taxation, investment and employment. The value of food and drink exports increased 21% between 2016 and 2021, or an extra €2.3 billion. The Exchequer cannot have it both ways. Increased exports cannot come without some increase in the cost of the TB programme. Total disposals of livestock, including slaughtering, live exports and deaths, increased by more than 500,000 head in the period 2012-2019. In this context, the increased cost of the TB programme over the past four years at 12% is not unexpected and does not represent a disproportionately higher burden on Exchequer funds.

The cost of the programme is estimated at €97 million in 2020, compared with €87.5 million in 2012. We think this does not fully capture the contribution of farmers. The testing element, which farmers pay for, is costed at a national rate per animal tested, but we believe that many farmers, especially those on smaller or fragmented holdings, are paying more for testing. It is also the case that the programme does not allocate a cost to farmers for their own time in testing cattle and other programme requirements.

Department staff costs for 2020 were €28.5 million, which is a figure that we have repeatedly challenged. We do not understand how it makes sense that the Department figures show that its staff costs for administering the scheme are roughly equal to the costs of testing the entire national herd under the annual herd test, paid for by farmers, particularly when one considers that more than 95% of herds are clear and, therefore, these herds do not entail much interaction with the Department.

A sound strategy must be based on fair play for all farmers and a recognition that full and accurate compensation is the essential foundation of success. Academic research is important, but we are talking about the livelihood of our members here.

I will add some general comments on compensation. The ICSA wants to see a review of the financial impact of compensation arrangements on suckler and beef farmers. In the case of suckler farmers, the entire business viability is very sensitive to selling at exactly the right time and weight. For example, an enforced slaughtering of a calf before it reaches optimum weight for a weanling of 350 kg means that it will be undervalued. Moreover, the remaining cohort of suckler calves will not be sold in time to achieve the best balance between price per kilogram and the cost. Timing is also significant. Weanlings are generally priced higher in July and August and therefore being locked up at this time can have serious implications for viability. This impact is not captured by either the on-farm market valuation, depopulation or income supplement grants. Likewise, the restrictions on buying in cattle or on selling at particular times of the year can have devastating impacts on the entire viability of an enterprise. In terms of overall cost, the compensation scheme is only the third highest area of expenditure, well below the costs of testing and staff administration.

I will speak on on-farm market valuation. In 2020, the cost of on-farm market valuation compensation is estimated at €16.3 million. Using the September 2019 to September 2020 data, there were 21,289 reactors which works out at €769 per head average compensation cost in today's markets.

The ICSA believes that there is a particular problem with the valuation of high value animals being capped unfairly and that valuation should be always in line with the real market value of the animal, particularly in the case of breeding stock or pedigree stock. Valuers should be free to fully and correctly value all animals and there should be no artificial cap on breeding or pedigree stock values.

Depopulation and income supplement grants are paid to help alleviate loss of income due to loss of stock. The rate of dairy cows is €55 per month and suckler cows at €38, which presumably reflects loss of milk sales. However, the problem of sucklers is that in certain cases, the loss of the cow has a lifetime impact on the calf. ICSA believes that the impact on the calf needs to be fully compensated for.

The hardship grant is paid, in particular, to cover extra feed costs incurred during the winter feeding months as a result of being unable to sell stock. It only applies where there is no off-farm income. The rate of €38 per suckler cow is reasonable except for the fact that the maximum payment is €250 per month, which is totally inadequate to cover feed costs in many cases, particularly with recent inflation and it is outdated. We also question why those with off-farm income are excluded. This may be appropriate for high-net-worth individuals, but the suggestion that there is no financial hardship for someone with a modest level of off-farm income is absurd.

The TB forum will need to align the deliberations of all subgroups if we are to make progress. We cannot accept new measures unless the thorny issue of funding and fair compensation is sorted. It is also essential that the wildlife element to TB is given as much prominence as proposals for more farm restrictions.