Oireachtas Joint and Select Committees
Tuesday, 4 December 2012
Joint Oireachtas Committee on Agriculture, Food and the Marine
Food Harvest 2020: Discussion with Irish Farm Managers Association
I welcome Mr. John Fitzgerald, secretary of the Irish Farm Managers Association, IFMA; Mr. Liam Moyles, former chief executive of the Farm Apprenticeship Board; Mr. Kevin Cummins, chairman of the policy committee of the IFMA; and Mr. Seamus Quigley, committee member of the IFMA.
I draw attention to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the joint committee. If they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a person, persons or an entity by name or in such a way as to make him, her or it identifiable. Members of the committee are reminded of the long-standing practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
Mr. Moyles will make the presentation, but Mr. Fitzgerald wishes to make some opening remarks.
Mr. John Fitzgerald:
On behalf of the Irish Farm Managers Association, I thank the joint committee for giving us the opportunity to present our case. We come with just one agenda. It is not a personal agenda but a desire to ensure the potential of the agriculture sector can be achieved. The Food Harvest 2020 targets can be achieved if certain things are put in place. Mr. Moyles will make the presentation. He is the former chief executive officer of the Farm Apprenticeship Board. Mr. Kevin Cummins is a Nuffield Scholar and farming in a partnership. Mr. Seamus Quigley is also a Nuffield Scholar and farming in a partnership. I am dairy farming in Cork.
Mr. Liam Moyles:
I convey the apologies of Mr. Jim Treacy. The four of us are volunteers. We have a single purpose which is to try to get young people into farming and improve the output and efficiency of farming. We pre-submitted the slides to the committee and I will begin by dealing with the last one.
Our summary point is that the association believes strongly that agriculture can lead economic recovery. Food Harvest 2020 has set the target for what we deem to be an historic new era. The training and education of young people going into farming, at whatever level, are key. In other words, human capacity will be vital to succeed in achieving the Food Harvest 2020 targets. A number of barriers must be removed, mainly to access land and encourage its use. This can be done through flexible arrangements and joint ventures. We need a proactive taxation policy approach and must support young trained farmers. In summary, we suggest that if we do a few things that we will outline, it is possible to create jobs in farming, stimulate rural development and communities and promote economic recovery.
The first slide points to the importance of agriculture in the economy. It is the primary indigenous sector, with 150,000 people employed in it, and an annual output of €24 billion, as stated in the Food Harvest 2020 document. Agriculture will continue to play a crucial role and Food Harvest 2020 sets out the growth plan for a new era in agriculture. Achieving the Food Harvest 2020 targets will require highly trained and specialised young farmers, greater land use through access and flexibility arrangements and support for young people who start farming. It will be dependent on the capacity of farmers, managers and labour working on farms to deliver to the standards required. The key issue is access to land and facilities as it is a barrier. The regulatory environment in farming must favour young, skilled and progressive farmers. Our taxation policy must be pro-farm development, pro-productivity, pro-efficiency and promote the use of land.
On the education front, the association strongly believes that we must attract and retain talented, skilled individuals. Education will also be important in trying to get the industry and farmers to adapt and change in order that we can gain a competitive advantage. Obviously, a range of skills will be required to manage multiple farm operations with large complex structures. Undoubtedly, to succeed and stay in farming, one needs a range of key attributes such as agility, flexibility and decisiveness. The human capacity is vital in education and training. We all learned in our younger days that management was about land, labour and capital, but they must be pulled together by the human capacity. This is a key issue that we must get across to the committee. If education and training do not take place and we do not have the required technical and managerial skills, the association believes we will not meet the 2020 targets. Many of us are under the illusion that 2020 is far off into the future, but it is only seven years away.
The association also believes we must urgently train and educate young farm entrants to meet the challenges of this new era. The old farm apprenticeship programme was about learning by doing. We are talking about hands-on practical training and doers, not talkers. In that context, we strongly advise that there is a need to support the new Teagasc and UCD diploma in dairy management programme which is a first step and a good development.
The next slide deals with the age profile in farming. Most people are aware of it, but it must be reiterated that we need new blood in the industry. That is obvious. The age profile of farmers has disimproved dramatically in the last decade. According to a Central Statistics Office, CSO, survey in 2010, 6.2% of farmers were under the age of 35 years; the corresponding figure was 13% ten years ago, which is a dramatic turnaround. There is a pro rata disimprovement in the age profile over 55 years of age. As it is not a good starting point, this issue is urgent.
With regard to access to land, the association is of the view that there are a number of things that can be done. Individually, they are not big items and they could be easily sorted out. They could contribute a great deal to opening opportunities to young farmers to start farming. The starting point is that, as everybody knows, the capital required to get into farming is very large. It is an expensive business. Land use is the key and the first barrier is the reference year for the single farm payment. The lack of confirmation of the reference year is resulting in less land being available in the marketplace. This is leading to an increase in the price of land which is driven by the fear of landowners that they might lose entitlements or benefits as they arise. The solution is to secure agreement to declare 2011 or 2012 as the reference year. There would be no cost to the State and it would remove the uncertainty and speculation. It would certainly reduce rental price and inflation pressure.
The second point on land access is that as an association, we are tremendously pleased to see milk production partnerships in dairying. The milk production partnerships are in place, but there is a major drawback - the joint and several liability in the arrangements for partners. Some of my colleagues will comment on this issue if they wish, but there is no doubt that it is a barrier to the uptake of partnerships. There is also the difficulty for the manager or other non-partner in joining the partnership arrangement once it is up and running. If we could sort out these problems for partnerships, there would be no cost to the State and it would result in better uptake. If we can get more partnerships up and running, we will have growth and development and the farming economy moving faster to meet the 2020 targets.
The third point on barriers to land access concerns the restrictive regulatory environment and the single farm payment rules.
They prevent people such as neighbouring farmers from taking good practical opportunities to co-operate in joint ventures. They prevent people from making use of excellent opportunities for short-term arrangements between neighbouring farms. The use of land is the important thing, not the ownership. The solution is to revise the rules to allow neighbours to co-operate to utilise fully the land available. There is probably a need for a proactive approach by the Department of Agriculture, Food and the Marine rather than a policeman role. It is difficult to get it right all the time. At no cost to the State, it would enhance the potential for young people to gain access to the land.
A third barrier to access is the restrictive regulatory environment and the continuation of the single farm payment rules. If a farm manager or herdsman employed on a dairy farm, for example, is allowed to run his animals along with those of the employer, using two herd numbers, it is an opportunity for employed people to build up some capital. This can be the first step towards joint ventures in the future. It is a very simple measure to promote the first step.
We could also consider some of the European schemes involving low stocking rates. The rates are so low that it is an encouragement not to farm the land. We can put arrangements in place, within the regulations, to co-operate with neighbours. There are restrictions on dates with regard to the definition of farming. If we could allow cows to be milked on the extra land of a neighbour, we would expand cowherd size and the arrangement between neighbours would work productively for both and contribute to the farming economy. It is a step-back arrangement rather than full retirement.
We have a few proposals on taxation, one of which is the reintroduction of stamp duty relief on farm consolidation on land swaps. We also suggest it is important to maintain the existing stamp duty relief on land transfers for young trained farmers. Along with the farm consolidation and tax relief, it is important to promote the stamp duty relief. There was suspicion about it before and it needs to be promoted. Farmers must be encouraged to avail of it. The fault may lie with farmers for not using it enough. The association feels there will be a greater interest in this in the new era because we are looking to expand the industry. Any arrangement that helps will be seen as an advantage.
The association believes the fear of losing farmer status through long-term leasing is real. It is a practical difficulty in terms of capital tax liability. Where a farmer is no longer treated as a farmer for tax purposes, the family can fall into problems with capital gains, capital acquisitions or inheritance taxes. That is a shame if land leasing can make land available to young people who want to get started.
Full tax relief for long-term leases needs to be retained. From listening to farm managers, I feel it needs to be promoted, because people do not realise the incentives exist. My final point was the subject of a full submission by the Irish Farm Managers' Association to the Department of Finance some weeks ago. While there is stock relief for young farmers, if there is not enough profit in years one and two, which is likely in a start-up situation, there should be a roll-over of the under-used stock relief. It should be allowed to accumulate or roll over for the first four years.
My next point on the barriers to land access refers to the support framework for young trained farmers. The installation scheme is excellent for helping young people to set up in farming and it should be restored. An established grant should be considered for farm managers who have a joint venture arrangement in equity or as employees. This will help them to get stock established and use it as a stepping stone to future partnership. Equity joint venture farm managers should be eligible for the installation scheme if it is reintroduced. We propose low-interest loan packages for young trained farmers and, finally, we suggest to the committee and the Department an underwriting scheme be put in place for bank chattel mortgages on farms. This will allow farmers to get the capital to buy stock. This applies particularly to owners and joint ventures involving young farmers. Capital is a huge issue.
In summary, we strongly believe agriculture can lead to economic recovery. Food Harvest 2020 may be an historic new era for us. The training and education of young farmers is key. A number of barriers exist. There should be a proactive taxation policy to encourage young people to set up in farming; we need to support young trained farmers. This would create jobs on farms, stimulate the rural economy and communities and promote economic recovery.
That is an interesting submission. Perhaps Mr. Moyles can give me more information on the Irish Farm Managers' Association and whom it represents. Mr. Moyles emphasises access to land. The transfer of land must be examined. There is the fear factor among older farmers and the tax and legal factors mean it is a multifaceted challenge. I am interested in the recipe proposed to overcome difficulties. There are a number of specific goals in Mr. Moyles' presentation. Training is important but it is more useful if one is doing the job. For example, if someone gives me a new phone, I will mess with it for half an hour before I look at the instruction manual. If I look at the instruction manual first, I will never figure it out. Training really pays off when one is working on the job because one understands in practical terms where the difficulties lie.
On partnership, Mr. Moyles said there should not be joint and several liability for partnership debts. In other partnerships, such as accountancy firms or solicitors' firms, there is liability for the totality of the partnership. That is how it works. Perhaps Mr. Moyles can outline why it should be different in this case. He also referred to the difficulty with a manager or other non-partner joining the partnership arrangement. Are these difficulties legal or practical? Changes that do not cost the State money are very attractive. If there are regulatory barriers, it is important that we examine them. There is a major debate about the single farm payment at the moment. The more one looks at it, the more we see it has effects that have nothing to do with farming but have a huge effect on farming. People have entitlements they are not using or they are not using land to its capacity. As part of the debate on the single farm payment, we need to look at the changes that need to take place within the single farm payment to encourage the use of all land in a productive way. We must also make sure the user of the land, as opposed to the owner, gets a fair return for effort. Perhaps the witnesses can expand on that point because we need to ensure the land of the country is properly used.
I have my reservations because of the historic nature of the single farm payment. It was suggested that 2011 could be the reference year and I am interested in that because any year forward causes huge distortion, although year back will also cause problems in how the single farm payment is allocated. We must avoid distortions and I am interested in hearing how the allocation would take place. If we start with 2011 and say that is the new base year, will it be done on the same basis as before or will the money be allocated differently?
On legal and taxation policy, a number of specific taxation policies were mentioned. We need a comprehensive package of taxation measures. Some measures have been outlined, and I asked about the effect they are having. It is important that we find out whether the taxation measures have done what they were meant to do. I am not sure that is happening, judging by the evidence.
Are there legal issues and legal cost barriers to making land available? Short-term and long-term leasing are major issues. We seem to favour very short-term leasing in this country. It is fine to promote something but it does not always work. Those of us who are old enough can remember the famous Guinness Light, which was promoted and promoted but did not sell. Promoting a thing without the people on the ground believing it is attractive tends not to achieve results. Are there any concrete steps we could take to ensure longer leasing and more certainty for people?
I thank the delegation for coming in and making the submission, which was concise and straight to the point.
I thank the delegation for coming today. I agree with many of the points made, particularly on this new partnership. We must encourage young farmers to get involved in the business of farming and we must ensure the installation aid scheme comes back. We are in difficult financial times but perhaps in a year or two it might be back. We must encourage older farmers to hand over land or farm in partnership with younger farmers. The delegation mentioned running two herds together in the presentation. I do not know how that would work from the point of view of disease control, but we all started off, when we were not so restricted, by running a few animals on our parents' farms, or on a neighbour's farm if one was helping out a neighbour. That is more difficult now with disease control in place. It is a good idea and we should consider it.
The reference year creates a problem. The damage is done because many people made the decision having assumed 2014 would be the reference year and have possibly decided not to give the land to the farmer who used to get it. Could we move forward without using any reference year, based on whoever is farming when the application date comes?
Much the same would apply to farmers milking cows. I presume the land would be leased and that another farmer would not be milking in the same dairy. Two farmers working in partnership could use the same dairy, although again disease might be a problem. How would that be overcome? Perhaps the two herds could be isolated.
I thank the delegation for the presentation. We are happy to engage with the witnesses to see how we can make progress on these issues.
I welcome the delegation. The presentation was concise and to the point. It could be summed up by saying that there are two main issues: education and the availability of land.
I am interested in the figures for the age profile of farmers, a major issue at present. Are those figures slightly out of date, considering the agricultural colleges have been bursting at the seams in recent times? There are many more farmers' sons who five or six years ago were content to mix cement and build walls but who are happy now to return home and work on the family farm. The agricultural colleges are overstretched, so are the figures up to date? The figures for 2010 might already be out of touch.
Education is essential if we are to achieve the objectives in the Food Harvest 2020 strategy. That is only a few short years away at this stage so we must be ready for it. To be ready, however, education is crucial. How does the Minister think we could encourage more farmers to go to college? Where would there be other prospects apart from college? Colleges are stretched so is there any way, through Teagasc or a similar body, that we could see other educational elements being added to the system to help young farmers coming into the system?
There is no doubt we all agree about the barriers to land access. It is essential that more and more tax incentives are put in place to allow for land mobility, particularly from a dairying point of view. There are ambitious targets for dairying in Food Harvest 2020, and to increase dairy production we must have all the land together. Measures must be put in place to ensure that happens. Other farms involved in the production of beef or sheep meat could work far from each other, but in dairying it is essential that all the land is around the milking parlour.
I thank the members of the Irish Farm Managers' Association for coming in. It was a very interesting presentation that was concise and precise.
The next few years will define farming in this country. We have seen changes through various CAP negotiations but hopefully when there is a new CAP in place in 2014, and in 2015 when quotas are abolished in dairying, we will see major changes in the way farming is practised. It is important, therefore, that younger people enter farming. Any Government that is in power must have proactive policies, and the last budget was proactive about land transfer. We must go further because we must have more young people if we are to achieve the production targets in Food Harvest 2020. Land is a finite resource that means more to an Irish person than to any other nationality in the world. We only need to look at John B. Keane's play to see that.
The witnesses stated, referring to taxation policy, that a person could lose his status as a farmer under a long-term leasing arrangement. How long must someone lease land before losing his status as a farmer? We should pursue this as a committee with the Department of Finance, the Department of Agriculture, Food and the Marine and the Revenue Commissioners. If that is a barrier holding people back from leasing land, it must be changed because it could have implications later on if a person has a young family and must lease the land as a result of illness. His family might want to re-enter farming but would be unwilling to do so because of transfer of land tax, capital gains tax, inheritance tax and acquisition tax.
I thank the delegation for the presentation, which was very interesting. I am broadly agreement with the points made on taxation policy.
I would be broadly in agreement with the need for relief on farm consolidations. This is key. The two overriding points that have been stressed by the delegates concern young farmers, the barriers to accessing land and how to get around those. The ability to consolidate holdings is crucial. Current stamp duty reliefs and other reliefs are crucial to that end. We have been doing significant work to try to maintain these reliefs at a time of great financial difficulty.
On a point Deputy Deering made on the education of young farmers, do the delegates believe more can be done to train farmers who cannot or do not go to agriculture college, for example, by the provision of on-site training for young farmers to take them up to manager level? I note the witnesses referred to the Teagasc professional diploma awarded by UCD which relates specifically to dairy farming. While I presume the focus of the delegates is on dairy farming, outside of that, how could that course be expanded, taking cognisance of the pressure agricultural colleges are under? I attended agriculture college, but I know it did not suit some of my neighbours to do so for one reason or another. How do the delegates view that?
On farm partnerships, does the membership of the Irish Farm Managers' Association consist entirely of managers or would a person who goes into a partnership with a farmer who owns the land and without that person owning the land also be deemed a manager? The delegates referred to the inability of a manager or non-partner to join the partnership arrangement. Will they expand on that? Have they strong views on partnerships expanding beyond the milk production partnerships? I believe we need to broaden that and give the same opportunity to farmers in the beef and other sectors.
Mr. Liam Moyles:
I am here on a voluntary basis. My background is that I worked for 27 years in charge of the farm apprenticeship scheme. The scheme was a hands-on programme of on-farm learning. I empathise with the point Deputy Ó Cuív is making and he has four converts here. Learning farming under that scheme was what one learned hands-on in the field and not in the classroom. The scheme faded in early 2000s because agricultural college places dried up and the whole scene changed, but now that is changing back. This delegation is in favour of the hands-on approach. We have a slide on training doers, not talkers. Farming is a tough game, physically, mentally, and financially.
I will respond to Deputy Heydon's question about what constitutes a manager. One can define a manager in every way and in one way. When we talk about managers, it could be herdsmen, a farm labourer, there could be arrangements for joint equities, there could be a salary and it could be half and half. It is about trying to follow the New Zealand path and creating steps of entry for young people. We do not have all the answers, but there are some ideas to think about.
I will answer the question on education before I hand over to my colleagues, the practitioners. who will answer questions on the other areas. Since the board was absorbed into Teagasc, ten years ago, I have worked in education. My next point is not a criticism, but a fact of life. With the downturn in numbers and issues with the budget, one serious negative development is the failure to provide the same level of training at local level as existed historically. I am a strong believer in the provision of training at local level. Adults who have worked as plumbers and on building are now returning to farming. They need the expertise, knowledge and skills, which in the past the local Teagasc office was in a position to provide in competition, so to speak, with agricultural colleges. The demise of that system - it now only exists in an odd county - is a shame. Teagasc needs resources to provide that type of training. I know from my last two years in Teagasc that we worked very hard with some counties to try to get those courses up and running. The colleges are chock-a-block. There are pockets in the country where students do not want to go agricultural college. In my view the solution to the problem is known, but the question is how to put it in place. I do not have an answer for the lack of money. The part-time option at county level with the local advisers and education staff on the ground providing the training has been tried and tested.
The motto of the farm apprenticeship scheme and the new dairy programme as developed by Teagasc is "learning by doing". Students who have done two years in college, some of whom will have a minimum of six months done on farms and some who will have done work experience in New Zealand or elsewhere, will do a further two years on farms as part of this new diploma. In addition to the first six months of on-farm experience, they have the choice to go to New Zealand for six more months. We have some information on that programme which we will provide to the joint committee.
It is valid to say that the numbers we provided are out of date because the data from the CSO are two years old. While numbers have bulged in the colleges in the previous year and this year, it will be a while before those enrolled will be deemed holders, so the statistics will not change for a while. Our purpose today is to make them change and speed up the rate of change. In my view those who are in college now will have not much choice but to make a go of farming. We need to open the gates to give them that chance. That is what my colleagues and I are trying to do here today.
The delegation as a whole and the Irish Farm Managers Association are dairy-oriented, but we see this as wider than dairy. As my colleagues are all in dairy farming, that is what they know. I am not farming, but much of what we say will apply to the cattle sector, where we can make a great many improvements. My colleagues will deal with the other points.
Mr. Kevin Cummins:
Deputy Ó Cuív asked about the milk production partnerships and the issue of joint and several liability. The issue is that the partnership is set up with unlimited liability. A typical scenario could be a young farmer starting off with little or no assets joining up with a farmer who would be at the other end of his career, owning quite a lot of assets. The ratio is wrong in terms of assets and in terms of responsibility. The Deputy pointed out, quite rightly, that the legal profession is in the same position. As we understand it, the lawyers and solicitors have got together and are in the process of trying to do some work on changing the legislation to correct this anomaly. The only example we have is in France where they operate partnerships under a GAEC scheme. They have changed the legislation in France to accommodate these partnerships.
Mr. Kevin Cummins:
I am sure we can. Senator Comiskey raised the question of a farmer who had two herd numbers and had an issue with disease control. It is back to the same scenario. When somebody is starting off, they are trying to build some collateral. They would obviously comply with the same disease issues as if it was just one herd number, but it would lead to the possibility of the young manager being able to go into the bank and borrow money to buy stock and the bank would have a lien on the stock if a chattel mortgage was available.
Mr. Séamus Quigley:
I will give a practical example. I started farming in 1990 on a small farm. I have built up the farm by leasing a number of other farms and through milk production partnerships. I am aware of the issues. The issue of joint and several liability is a big one. When one approaches someone who might be interested in working with one, it is an immediate turn-off for them to learn they could be suddenly be responsible for one's liability. It is definitely something that needs to be examined.
I will return to the herd number issue. I have a farm manager. Many of those who qualified through the farm apprenticeship scheme in the 1980s left the agriculture industry because it is a hard life. Such people should have been allowed to build a certain amount of equity, but they did not have the opportunity to do so. I believe the same thing will happen in the future. It has been mentioned that the agricultural colleges are full. The expansion needed for Food Harvest 2020 will mainly come through existing farmers. They will take on employees to grow their operations. They will take on second farms and grow them with employees as well. Those employees must have an opportunity to build equity and get into farming in their own right.
The first step is to get a herd number. When my farm manager applied for a herd number, he was told that if he wanted to qualify, he would have to take out a lease of at least five years on land with facilities such as a yard and a crush. He did not need the land. All he needed was the herd number. He was carrying the stock with me. He wanted to build equity for himself so he could move on to the next level. Perhaps I would be able to offer him a partnership arrangement at a future stage. One will not take on somebody and offer them a partnership arrangement in the initial stages. One has to grow with them. It is like getting involved in a marriage. One has to know who one is getting involved with. That is the first step. It is important to allow young people to get herd numbers without tying them up in regulations.
I would also like to comment on lease arrangements. Four or five older farmers in my local area have said publicly that they want to retire. They are in limbo because of the single farm payment situation. They do not want to do anything that would put their single farm payments at a disadvantage. The families of a number of those who would like to retire do not want them to do so. If they retire and leave farming, the younger generation will have to pay the capital taxes associated with taking over and will not qualify for agricultural relief in the future.
I would not mind somebody who was coming back in. I gave an example of a father of young children who was ill. The seven-year period is not the problem. I want to know whether a person who has leased his or her land for three or five years does not qualify for agricultural relief on the transfer of land. Is that what Mr. Quigley is saying?
Mr. Séamus Quigley:
I do not. It is definitely an issue. When it is pointed out to people that tax relief is available for the long-term leasing of land - it can be worth up to €20,000 over 12 years - they think this is great. When they meet their solicitors and accountants, however, they decide not to proceed with the leasing because they do not want the younger generation to have a large inheritance bill. These people tend to stay plodding along as best they can, while younger people work outside of farms and try to hang on until they can take over or the older people die. It is definitely an issue.
Mr. John Fitzgerald:
Deputy Deering spoke about agricultural colleges. While I accept that the numbers have increased enormously over recent years, I often wonder whether many people are going to agricultural colleges just to do a third level course. The greater the numbers in our agricultural colleges, the more diluted the courses become and the more difficult it is to get a proper education. There is definitely a need for an effective farm management training programme. We all accept that farm managers need to have multiple skills. They have to be capable of managing staff. They must have a certain level of veterinarian, agronomist and economist skills. If we are to achieve the 2020 targets and avail of and exploit the opportunities that will present themselves after 2015, many of which we have not experienced for 30 years, we will need to put in place a better education system for farm managers.
We will have to focus on technological options, for example. Just 4% of those involved in the farming sector are engaged in grass budgeting, which is probably the most critical factor in dairy farming and beef farming in our climate. Perhaps it is not as important in other European countries. If we want to exploit this country's recognised grass growing potential, we will have to ensure more than 4% of our grass farming community know how much grass they are growing and how they are utilising it. Similarly, just 6% of the farming population are engaged in flows so that they know their costs. Nobody can run a business without knowing their costs. That is why it is imperative for us to put training systems in place. We need to train people to do that. It is obvious the new UCD diploma in farm management must be promoted. We feel that a designated unit should be established within Teagasc to drive this programme, which will deliver in 2015. There are many college courses, but the content of many of them is not adequate.
Mr. John Fitzgerald:
Correct. The courses are probably fine, in themselves, but they could be structured in a better way. A student who goes to agricultural college in September is put into a dairy farm situation on 1 February, when the calving season is in full swing. That is probably not the best environment in which to learn. If the farmer is busy and cannot mentor the student like he needs to be mentored, it can be a poor enough experience for a young fellow who has come from a college with very little experience of hands-on farming. Although he will learn a certain amount over three months, it is not the best environment for him to get the best-----
I know what Mr. Fitzgerald is saying. My son, who spent four years studying engineering at the University of Limerick, has spent the last two years in Kildalton doing the green certificate. I think they need to teach a lot of reality there.
While I accept they are young and enthusiastic about their ideas, many of their ideas are not practical.
Mr. Seamus Quigley:
For any business, one needs three things, namely, strategy, capability and capital. Students in agricultural colleges are not taught about business, developing a plan, setting goals, doing financial budgets or managing key performance indicators. I often tear my hair out for this reason as many of the courses were designed to enable students to achieve the qualifications required to obtain a green certificate and reliefs. The courses were set to meet the lowest common denominator and students were not taught business skills. A substantial sum of money will have to be invested in industry and both on and off-farm processing. Ultimately, it will be farmers who must meet this cost. Farming needs business acumen and this quality is not emerging from the education system.
Mr. Liam Moyles:
As someone who has worked on the practical side, I believe that is a matter for debate. One could, for example, ask any of the graduates in economics from Trinity College how much knowledge they have of the areas Mr. Quigley mentioned. We should have that debate elsewhere, however. Leaving that aside, we need to go one step further with students to ensure they reach the Food Harvest 2020 targets, run their farms as businesses and create opportunities to enable them to carve out a niche for themselves. We must go further and become the Kilkenny of the farming world.
Mr. Liam Moyles:
It was founded in 1964 and the first graduates emerged in 1968. The association represents members who qualified through the farm apprenticeship scheme. At the time we had two schemes. The first was the three-year, full farm apprenticeship scheme which was augmented by one year in agricultural college. Students had three years of hands-on work, with block release and project work. We also tried to ensure they could do farm accounts, although grass budgeting did not exist at that time. Mr. Quigley is a graduate of the second scheme. Despite being farm managers, approximately 20% of the graduates of the farm apprenticeship scheme returned to farming. They were fortunate to be inheritors as it allowed them to return to family farms. The second scheme was the trainee farmer scheme, which was aimed at farmers who could not afford to do the full three-year scheme. Under this scheme, students did one year working on a master farm and two years supervised at home on their fathers' farms.
Until last January, the Irish Farm Managers Association represented graduates of the two apprenticeship schemes. However, the association's activities went flat for about eight years during the boom when little happened. Mr. Fitzgerald and the chairman of the association, Mr. Jim Treacy, who manages the Rockwell College farm and may be known to some members, reactivated the association and are trying to widen its net by attracting members from many of the other streams of education that are producing graduates who have the potential to be farm managers. We do not take a narrow approach.
Mr. John Fitzgerald:
Not all of them are still members but they would all have been members at different stages over the years. Three years after I qualified, we tried to get land leasing off the ground and organised several meetings on the issue in 1982 and 1983. However, the door was slammed in our faces in 1984 and the association came to a standstill for almost 30 years. We believe an opportunity is presenting and if the country does not avail of it, we will miss out on what New Zealand has gained since the 1980s when its production of milk increased from 7 billion litres to 17 billion litres per annum. While Ireland may not have the potential to increase output to that level, we could increase the current level of 6.5 billion litres to 8 billion or 9 billion litres. Everybody appreciates what that would mean to the economy.
The association is largely dairy-based. It should be borne in mind that it is not possible to have dairy cattle on 50% of the land. We heard about Food Harvest 2020. Milk quotas will be eliminated in 2015. I understand the split between the national suckler and dairy herds is roughly 50:50. In recent years, we have developed excellent quality in our suckler herd, as evidenced in the benefits of the suckler cow scheme. We have the potential to increase the proportion of cattle from 50% to 70% of the national herd, which would result in a sudden reduction in the beef herd. If the quality of our beef industry declines, what would be the point in continuing with beef given that countries would no longer be interested in importing Irish beef?
If dairy production were to increase to 15 billion litres per annum, how many Friesians and Holsteins would be needed to produce this milk? One can only push genetics so far, which means one will have to increase the number of dairy cattle. Does the delegation envisage a cull of male Holstein cattle or the use of semen which will produce only female animals?
If this is done right, the beef industry could also grow and develop. I thank the Irish Farm Managers' Association for its presentation. Owing to developments during the so-called boom years after 2000, the association found it difficult to retain an active core membership, partly because some people came to view farming as a sunset industry.
I should declare an interest in that I am a product or survivor of the farm apprenticeship scheme and Mr. Moyles was my mentor. He and the three other gentlemen from the association possess a wealth of knowledge, having developed a business from a base in which they did not own land. Moreover, they did so in an era that coincided with the introduction of quotas.
The delegation has made a number of proposals on taxation, partnerships, cohabitation of herds and milking that the joint committee has not heard previously. Deputy Ó Cuív should note that the farm apprenticeship scheme was a training scheme for doers. In the late 1980s, an advanced course with a diploma in farm management was developed which required participants to have technical skills. For example, if one could not grow three tonnes of wheat or produce a certain number of litres of milk, it was pointless participating in the course. It also developed business strategy and thinking among students who benefited almost as much from listening to each other as they did from listening to their lecturers.
The Irish Farm Managers Association possesses a large well of knowledge that has not yet been tapped. We hear from Macra na Feirme and other organisations. The IFMA represents the operators of farm businesses and we need as many such operators as possible. Members will note that the word "USE" is in upper case in the presentation. The definitions in the Common Agricultural Policy of "farm activity" and "active farmer" must be addressed.
We have said this before as we develop our paper on the description and what that requires. Land stocking rates is one and usage is a huge issue specifically because such a huge concentration of land is rented on the short-term conacre system. The farmer status is an issue we were not as aware of from the point of view of the implications for long-term leasing. These are all issues that should be raised.
On the issue of data and statistics it has been stated that it is expected that 4.5 million farmers will retire in ten years to 2022 in the EU. Of a total of 13 million farmers in the entire European Union, only 7% are under the age of 35. The Commissioner has a keen interest in changing that statistic. For the purposes of our Presidency of the EU in March when we hold a meeting of the chairs of the committees across member states we are doing a session on land mobility and access to land for young farmers. I may have a chat with the gentlemen afterwards about suggestions for input into that meeting because it is important to hear it from the perspective of people who have lived through the attempt in quotas with a restrictive tax and fairly restrictive disease control schemes to allow those who want to develop farming as their business. No more than any other skill, whether one becomes an accountant, a mechanic or a tradesman, one has to start. Land access and the capital cost of land should not be a restrictive barrier to allowing professionals in to run the farm.
Commissioner Cioloş's key objective in setting out his stall for the new CAP regime was that Europe would produce as much food as possible and do so sustainably. From that point of view we need qualified professionals in the business.
I thank Mr. John Fitzgerald and his colleagues for the presentation. It was useful from the point of view of the committee. We will be preparing another position paper on CAP. There are issues in regard to the Departments of Finance and Agriculture, Food and the Marine that we should pursue further.