Mr. Joe Healy:

I thank the Chairman and committee members for having invited the IFA to address the committee. I am joined by Mr. Liam Dunne, chairman of the IFA grain committee; growers Mr. David O'Brien and Mr. Jim O'Regan from Cork; Mr. John Daly from Galway; and Mr. Fintan Conway, also of the IFA.

I do not need to tell the committee that 2016 has been a disastrous year for grain farmers. We are into the fourth consecutive year of low grain prices, a situation that is not sustainable. The majority of tillage farms generated negative incomes in 2016, and the Teagasc outlook conference confirmed that the net average margin on tillage farms in 2016 was minus €130 per hectare. The figure for the bottom third of tillage farmers is minus €440 per hectare. Consequently, many cereal farmers will have to subsidise heavily their production costs with their direct payments. If one considers the Common Agricultural Policy, CAP, one sees that by 2019 these direct payments will have reduced by 8%. This is not sustainable. These important issues need to be addressed to ensure a viable tillage sector that can prosper into the future.

The fundamental problem is low to negative margins caused by low grain prices and rising input costs. On the price side, the IFA was instrumental in setting up a system of forward selling in order to mitigate income and price volatility. However, forward selling opportunities, affording a margin over production costs, have been few and far between, such is the scale of the downturn in grain prices over the past number of years. The exceptional yields in 2015 somewhat counterbalanced the low prices received but, unfortunately, many of the growers affected this year, particularly in Cork and Donegal, did not achieve these exceptional yields in 2015. In addition, a number of growers in some coastal areas of Cork and Kerry lost winter crops due to the sea scald and had to resow early this spring. The reality is that poor margins for the past four years have left tillage farmers across the country, particularly in these areas, with severe financial losses.

Tillage farmers have suffered a severe income drop of between €70 million and €80 million in 2016 due to a combination of factors, all of which are aggravating this already serious income crisis: reduced production in 2016 in excess of 400,000 tonnes; the reduction in oilseed and protein crop yields; lower grain and protein prices, reducing basic payments; and higher input and capital costs. Without political intervention and action on a number of fronts, Ireland's tillage sector is in imminent danger of collapse, with major implications for the entire livestock sector and our world-renowned drinks industry.

Many tillage farmers face severe financial hardship, such was the scale of crop losses experienced this harvest by individual growers in parts of a number of counties, including Cork, Kerry, Galway, Roscommon, Longford, Mayo and Donegal. I am sure the growers here with me will outline the difficulties and losses in their counties in the questions and answers to follow. Met Éireann data for these areas show that incessant rain of over 25 days, high relative humidity of 20 days and a lingering sea mist in some coastal areas for much of September impacted severely on crops essentially west of a line from south Cork to Donegal. I have personally visited a number of these farms and witnessed these difficulties first hand. We in IFA have also held a number of meetings with growers in their counties. The IFA is conducting a comprehensive survey of farmers affected in these regions and we are working very closely with Teagasc and the grain trade. Our figures indicate that individual growers have experienced crop losses running from 25% to 50%, with straw loss averaging about 50%. Some individual cases with significantly higher losses have come to our attention. Full details of our crop losses assessment are being prepared and will be presented to the Minister, Deputy Creed, and Commissioner Hogan in Brussels. The IFA raised the income crisis in the grain sector at a meeting we had with the committee last September. In addition, we have outlined the serious losses of grain farmers to the Minister on a number of occasions and have taken the case to Commissioner Hogan's office in Brussels. Farmers in these areas are at their wits end, not having experienced conditions like this since the mid-1980s or, in the case of younger farmers, never in their lifetime. Many farmers to whom I have spoken, especially in the past week or two, given that all the bills are coming in at the moment, fear repossession of their machinery. It is critical that an aid package is secured and put in place for these growers as a matter of urgency, given the dire financial situation in which many of them find themselves through no fault of their own.

Our aid package proposal is that the Government provide direct funding support to farmers who have been affected by the severe crop loss in 2016. The IFA is clear that the new working capital loan facility secured in the budget will help and have a positive role to play in some farms in the year ahead.

The IFA is clear that the new working capital loan facility, as secured in the budget, has a positive role to play on some farms in the year ahead but we are clear that for the farmers who have suffered crop related weather losses, direct funding support is urgently required. This could be provided with direct compensation payments of up to €15,000, reflected in the state aid de minimisceiling.

For the tillage sector at large, it is vitally important to implement the IFA action plan, which we presented to the Minister, Deputy Creed, at the national tillage forum, to address the serious and deepening income crisis growers are facing. The details of the IFA action plan include the introduction of a specific crop-loss aid package for the tillage sector targeted at the affected farmers. It also involves the establishment of a feed certification scheme supporting sustainable agricultural production. The scheme would maximise the use of native grain and proteins in Irish livestock rations in support of Irish growers; ensure that harmful weed seeds such as black grass and sterile brome, etc., are not inadvertently imported into the country; and increase the use of native grain and Irish malt in the production of Irish whiskies and artisan and craft beers. The action plan also proposes the abolition of tariffs and anti-dumping duties on fertiliser imports as fertilisers now account for 30% to 40% of variable production costs. The IFA has undertaken a major campaign at European level to eliminate duties and tariffs on fertilisers which would deliver annual savings of up to €1 billion to European farmers and between €50 million and €70 million to Irish farmers. I am heading to Brussels again in the morning to advance this campaign.

The action plan also proposes a review by the EU competition authority of the cost of plant protection products which are priced significantly lower to growers in other regions across the world; increased funding to allow for the expansion of the protein crop area eligible to receive the full coupled payment; and the immediate roll-out of the TAMS investment programme. Working with the Department of Agriculture, Food and the Marine, the IFA has put forward a comprehensive set of proposals for TAMs in the tillage sector and we are pushing for the scheme to be opened as soon as possible. Finally, the action plan proposes a reduction in the burden of compliance for greening and the introduction of a meaningful renewables heat incentive scheme that will enable growers to generate a viable alternative income stream from the sale of biomass crop residues.

The Irish cereal sector is in grave danger of falling into terminal decline unless immediate and decisive action is taken to reverse the dramatic fall in incomes. Since 2012, the Irish cereal area has fallen by over 100,000 acres and this trend will accelerate unless there is a dramatic turnaround in fortunes for grain growers. This will also have ramifications for the sustainability of our livestock and drinks manufacturing sectors. I am looking for the strong support of this committee in seeking an immediate aid package for the relatively small number of growers who have suffered devastating losses this harvest. In addition, I am also seeking the support of the members for action to address the deepening income crisis in the tillage sector. Prompt action is needed by all stakeholders to support Ireland's vitally important tillage sector.