Dr. Liam Hanrahan:

I thank the Deputy. The Leas-Chathaoirleach touched on the viability of the rural economy. As Ms Houlihan has said, it affects morale. It is not unreasonable for it to do so. If one thinks about it pragmatically, we have a number of members who would come to us to tell us about their situations. They might have 100 or 120 cows, and an integrated beef system where they are carrying their calves to beef, or a replacement heifer-rearing system alongside the dairy herd.

If they are in the most efficient banding bracket as we will call it, they have a significant nitrates issue now at the moment when farming very efficiently. Nitrate use efficiency is quite high, they are pushing the boundaries in terms of grassland management and getting their slurry out and they are faced with a reversal in efficiency of their production system or production in their production system, which undoubtedly will impact on the viability. In the case of one generation, it might be possible to carry on but in a two generation situation it becomes far more complex, as I am sure members are aware. Then it poses a question as to which generation finds an off-farm income. In the majority of these cases, the investments already have been incurred, the fixed costs already have been incurred. The costs are there, as is the production potential; it just needs to be allowed to happen to get the return from the investment.

For a young person starting out, even in an extremely good farming situation, he or she does not know what is going to happen in five or ten years' time. In a situation where such people are trying to build up the farm and obviously trying to make an investment, they do not know where their limit is. It is going to create even further pressures in terms of access to finance. If you are trying to create a finance plan for the bank, the first thing you need to know is how much you can produce.

The impact this will have on generation renewal cannot be overstated. We can say how much of an impact it would have on a farm right now at this minute but the potential losses down the line and for years to come, as well as the knock-on effects of that, are unquantifiable. In a situation where there is a proportion of rented land, clearly the costs of such land have gone up or the rented land could potentially be lost. It creates a lot of uncertainty and that is an issue for young people getting into a career. As we know, young people want to make a career in agriculture but you cannot make a career out of something and invest your life into it if you do not know where it is going.