Professor Gerry Boyle:

I will try to deal with the variety of questions raised. I propose to go through them and my colleague will supplement any of my answers if he needs to and if I commit any errors, omissions or otherwise.

On Senator Mooney's first question regarding yields, some of the most spectacular and substantial developments in research over recent years have been on the dairy side in genetic gain and better management. We had a fertility issue in the dairy herd and that is now pretty much resolved at this stage. We have benefited in terms of yield, in the broad sense of the term, over recent years and that has been well quantified. We reckon that with the genetic research alone, with ourselves and the Irish Cattle Breeding Federation working closely together, there has been a cost-benefit ratio of about 8:1. It is a very good story.

The Senator raised a very important question for public policy regarding the implication of climate change, and Teagasc is projecting an additional 330,000 cows.

There are two dimensions to the production of emissions. On the one hand, there is the level of emissions produced per cow and then there are the number of cows. On the first indicator, the level of emissions produced per cow, we have made substantial improvements in Ireland in recent years in driving down the level of emissions or, more particularly, in terms of per kilogram of milk output. That has come about as a result of considerable research. Virtually every improvement in efficiency on farms, and we can take any indicator, be it a fertility indicator, the grazing season or whatever it may be, leads to an improvement in a reduction in the level of emissions per kilogram of output, and that is a positive.

The other side of that is that if we increase the numbers, there is a balancing act. We would argue and have consistently argued, and there is beginning to be a shift in international opinion in this area, that the target for agriculture of a blanket cap on emissions is a very simplistic target and that the focus should be on the emissions produced per kilogram of product because that only focuses on the most efficient location in which to produce milk, beef or whatever. We could be very successful in Ireland or in Europe, even though we are very small, in capping emissions through very draconian measures, but that would only lead to an increase in emissions elsewhere. We hold to that point of view. However, the fact of the matter is that the policy is the policy. The Senator is right in that respect. The increase in the number of cows, adjusting for any reduction in emissions per unit of milk produced, will of itself lead to more emissions, although not many more because there is a balancing act within that equation.

This relates to the question that Deputy Heydon raised about the trade-off with the beef herd. There is no doubt in our view that the beef herd will be reduced. The extent of that is difficult to say, but there will be a trade-off there for the simple reason that many dairy farmers under the quota regime with additional land had suckler cows, and those suckler cows obviously are not as valuable post-quota. We will see a shift there and that will be a balancing act, but it raises issues Deputy Heydon has highlighted about the implications for the beef sector.

I note Senator Mooney's point about the transparency of the price of milk. We would all agree that the price of milk is more transparently determined, if unsatisfactory from a farming point of view at times, than is the beef price or the price of meat. That is not an answer, but it is a fact none the less simply because, by and large, we have a co-operative structure. The Senator raised an interesting point about liquid milk and I had not thought about it before. Clearly, the economics of producing liquid milk and the labour involved in its production with all-year round calving are very difficult and challenging. We have made some significant inroads in terms of the economics with our research farm in Johnstown Castle, where we have a liquid milk farm and we employ the same principles in relation to grass utilisation, which would not be the traditional way to produce liquid milk, and certainly the economics are far better there. However, the Senator raised an interesting question about the potential shortage of fresh milk. I agree with him that this would not be a satisfactory situation.

I appreciate Senator Mary Ann O'Brien's acknowledgement of the food works programme. We work very closely with Enterprise Ireland and Bord Bia, and some very successful companies have been established on foot of that initiative.

She raised an interesting question about the development of robotics in agriculture. We are doing a certain amount of work on that, most notably in the Kilworth farm and the Dairygold farm near Moorepark where we have an autograss milk product. I do not know if many members have visited that farm but it has an automatic milk system within a grazing system which is unusual. Most of the automatic milking systems are within grain-fed systems. There is no doubt that there will be greater use of robotics.

Robotics is probably too narrow a way of framing what the future will look like. The agricultural sector will increasingly use advances in other areas.

We have linked up in a very interesting alliance with the Tyndall National Institute in University College Cork, which is the national micro-electronics institute, and it is producing some fascinating electronic devices, for example, to improve the efficacy of disease management and so forth. The developments in this area are amazing. It has come to us and said that it thinks agriculture is ripe for the development of some of these devices and we are working closely with it. There are some fascinating areas involved and only time will tell how such developments progress. Sometimes we find that these developments often suggest a more positive future than is realised in practice, but none the less we think there are opportunities.

There are a couple of very interesting areas. For example, most recently we have been involved with a small, innovative company in Moorepark in investigating a grass measurement device, which is a very impressive kit. It allows the farmer to measure grass using a plate meter, transmit that information via Bluetooth to a mobile phone, and the farmer can calculate grass wedge and so on. That is the future direction in this area. My experience from a recent visit to New Zealand is that we are not too far off from being able to apply yield mapping to pastureland, and that has certainly been beneficial in the cereals area. It would be hugely beneficial in pasture production because we could reduce, for instance, the cost of fertilisers.

A related area has already emerged. I am sure members have heard of the phrase "big data", and the idea is that a great deal of information is being assembled because we are measuring so many things, cow movements and so on via transponders from which we can infer useful information. That is all part of this mix. It is all linked into the development of various devices, and certainly there is potential in this area.

On the staffing issue, I wish to make a point about the embargo. Notwithstanding the embargo, we obtained sanction to allow us to make mission-critical appointments, and I acknowledge that. That was very important, particularly in very difficult situations.

The education service in Teagasc was mentioned. There are always some year-to-year problems and people do not always get the course or the college they seek, but we are committed, and are supported by Government in this, to accepting every qualified student. We would view it as a failure if we were not able to do that, and that is our commitment in the context of the young farmers scheme.

As members will know, the deadline has been extended for farmers to qualify for top-up payments in terms of the completion of their programme. I advise Senator Comiskey that we are confident we will be able to cope with the demand over the period available to us, and we have been supported in this regard.

Senator Mary Ann O'Brien raised the issue about the GMO trial in Oak Park. This has been a controversial programme because we have a very small plot. We had 27 potato plants in the first year and it is part of an EU-wide project. We have no bias in this respect except to provide information. I always make the point that the best defence in situations where there is uncertainty is information. That is where we are coming from on this. The purpose of this project, as has been demonstrated, is to address the issue of late onset blight and to examine the ecological implications of planting crops. This is not a transgenic experiment where a gene is transposed from a wild plant that has resistance to late onset blight. This is a debate we have had to have.

I refer to the debate on the amount of chemicals used to deal with this problem - I cannot think of the number just now, but several repeated applications are required to deal with the challenge. We have to look very seriously at what, effectively, is a more environmentally friendly alternative. This is a modest project and, as a research organisation, Teagasc is of the view that we have do some work in this area.

We are not doing any work on fluoride and water quality. We have a close relationship with the Environmental Protection Agency, which is a very important agency with regard to the agricultural sector. Teagasc works very closely with the EPA. We have our perspective and they have theirs. Our interest is to protect commercial agriculture while adhering to required standards. For example, the EPA provided substantial funding for the soil survey, of which Teagasc is very appreciative. That survey is very valuable from the EPA's perspective and it is hugely valuable from our perspective. That is an example of how we can work together in the interests of the sector.

I agree with Deputy Barry's comments about debt and what he termed the surge debt, which is a very good description. He reiterated the importance of both cashflow and financial management generally. He put his finger on the biggest challenge for Irish agriculture; it is really not so much a technical challenge as a business challenge. The challenge is that farming needs to be treated as a business. I have been fortunate to have visited New Zealand, and the message I have come back with is not the scale - which is impressive - nor the technical capability, but the fact New Zealand dairy farmers talk business. A relative of mine from New Zealand visited Ireland and when he was talking to his Irish relatives one would think they were talking about a different industry. My New Zealand relative was asking the Irish dairy producer about his return in equity, but it was a dialogue of the deaf. That is the key difference. I agree with the comments on book work.

I refer to Deputy Barry's point about employing people to do financial analysis. Farmers are required to do a lot of things related to scheme obligations, for example. They do what they are required to do. They will carry out a soil analysis as part of REPS or AOS. However, they do not then use that soil analysis in their purchasing decisions. In my view - and this is a terrible but useful phrase - they do not take ownership of the information. There is no problem in a person getting someone else to do certain work because that might be more efficient, but it is most important that one use that information, interpret it and be on top of it. The farmer may not have produced the information, but he should be on top of it and he should use it to improve his income situation.

Deputy Barry made a very important point, which was relevant also to an earlier question from Deputy Pringle about the 24.4 cent price for milk. It is contained in a table we have supplied. That figure is from the national farm survey and it is a more representative sample. Naturally, one would expect a higher cost of production from a national sample. The farmers who come into the profit monitor are probably better farmers to begin with or they would not be doing the profit monitor. Teagasc has been criticised, and with some validity. It is important to note that the cost of heifer rearing must be added to the total cost figure. We reckon this could be anywhere around 4 cent per litre, which is a substantial cost. Other costs should be included. For example, we have not included a cost for family labour, and this could mean the addition of another 5 or 6 cent.

I refer to another aspect of New Zealand agriculture. When a New Zealand dairy farmer talks about production costs, it is always a fully comprehensive measure of cost, whereas in Ireland - this is something we may need to discontinue - we have the tradition of excluding certain items that would never be excluded in the New Zealand context, where land costs would be included in the total.

I refer to our greenfield site farm in Kilkenny which is an example of where all the costs are explicit. Heifer rearing is included because we have contract rearing of heifers so it is an explicit cash cost. The labour and land costs are also included. It is a much more rounded measure of cost which is what is important, particularly in a difficult circumstance.

I agree completely on the point about soil science which is the foundation of all agricultural knowledge. The figure quoted here is quite alarming. Dr. Tom O'Dwyer quoted 14% of soil samples as being optimal.