Dr. Tom O'Dwyer:

Perhaps, but for the purposes of comparison, we try to strip out the separate enterprises. We look at the dairy aspect on its own, the tillage aspect on its own, etc.

On the cost of heifer rearing, we have an imputed cost as part of the output, but it is not reflected as a cost. However, it is included in the output, which means that the profit figure has been adjusted.

I wish to pick up on one or two other points made by Deputy Tom Barry. With regard to sustainable investment, I totally agree with his observations. We are absolutely clear in the message we are providing for dairy farmers on prioritising investment. There is a scarce amount of money to be invested and it must be invested where they will obtain the greatest return such as in increasing soil fertility and grazing infrastructure.

The Deputy referred to surge debt. I had not heard that term before and would say it is one I will be using. Equally as challenging as the set of circumstances in which a farmer decides to take on the investment out of cash flow is where he or she decides to expand following a good milk price year, such as 2013 and 2014. He or she might decide to keep extra heifers or extra cows and build a milking parlour. If, however, he or she was to suddenly face a year with a poor milk price, he or she would have no cash reserves and would not have gone to the bank to borrow. What would be his or her chances of recapitalising the investment to try to get over the issue? In some ways, farmers who go to the bank and secure funding on the basis of their having put together a strong business plan and who might have a large debt are more robust because they finance their investment properly. This might be worth considering.

I totally agree with the Deputy's comment on the notion of employing a bookkeeper. I fully support this, particularly considering the scale of turnover of some of the larger dairy farmers. In rural towns there are small businesses, including hairdressers, grocers and plumbers, that employ bookkeepers and the turnover of which is lower than that of some larger dairy farms. It is absolutely mind-boggling. There are businesses such as IFAC offering the service. I firmly believe there is a role for part-time bookkeepers, as the Deputy outlined.

On the message for colleges, the tools for dairy farmers we are using such as the profit monitor, the cost control planner and business planning tools are being used by dairy students in colleges.

Determining future herd size is like asking the length of a piece of string. The figures we have presented show that, for the average farmer in 2014, the margin per cow was €800. Eighty cows by €800 is €64,000 in dairy income alone. There is a single farm payment on top of this and perhaps a margin in the replacement enterprise. There is a sizeable income from an 80-cow herd. However, the margin for the bottom 10% is €400 per cow. Therefore, to have the same margin, those in this category need to double their herd size. The challenge facing dairy farmers is whether they want to farm very well with 60 or 80 cows, with the ultimate ambition of being in the top 10%, or farm with a herd twice the size but with a lower level of performance.

Deputies Tom Barry and Martin Heydon referred to schemes in other countries. In Australia we are aware that there is a farm management deposit scheme to help with volatility. In New Zealand there is an income equalisation deposit account. Both countries have been coping with milk price volatility for more years than we have in Ireland. These schemes have proved very attractive to dairy farmers.

The other points raised have been covered.