Mr. Joe Healy:

I thank the Chairman and members for inviting the IFA to address the committee today on the future of the tillage sector in Ireland, an issue of real concern to all involved. I am joined for the tillage presentation by Mr. Liam Dunne, who is a tillage farmer and the IFA grain chairman, and Mr. Fintan Conway, who is an IFA grain executive. I am also joined by Mr. Damien McDonald, our director general.

First, I thank this committee for its support for the IFA and farmers in securing a weather related crop loss scheme for affected growers in the 2016 harvest. Unfortunately, however, as I speak, a number of growers are struggling to complete this year’s grain harvest and to save straw, as the weather has taken a turn for the worse. It is vital we collectively devise an action plan to address the serious and deepening income crisis in the Irish tillage farming sector as we are now into the fifth consecutive year of low grain prices. This cycle looks set to continue given the forecast for high world carry-over grain stocks for the end of the current marketing year in June 2018 and intense competition from the Baltic and Black Sea areas. Current estimates put world stocks to use ratio for all grains at an all-time high of 23%. In light of this, we need to take specific actions to build a solid foundation off which we can revitalise this important sector. Failure to do so in a prompt and meaningful fashion will accelerate the decline of crop production, particularly in peripheral counties, further reducing biodiversity. Continuing low, if not negative, crop margins have seen a significant swing away from cereal production over the past ten years, with the sown area down by more than 142,000 acres or almost 20%. For the 2017 harvest, sowing was down by a massive 37,000 acres on the previous year. This trend is expected to accelerate as we look towards the 2018 crop. The prospect of another year of low grain prices will see many growers struggle to cover their production costs. Forward selling prices for 2018 are at a small premium to current prices but offer no real income-generating opportunity, assuming average yields.

In terms of an action plan for the survival of the tillage sector, since I took up office I have outlined that political intervention is needed on a number of fronts to revitalise arable crop farming. A vibrant tillage sector is the basis on which we can further expand our livestock sector and our world renowned drinks industry. Implementation of the following action plan is critical to the survival of a central element of our farming system. First, there is a need for the temporary abolition of the clawback on the sale of entitlements for tillage farmers who need to raise cash or stand back from taking overpriced conacre. Second, under the Common Agricultural Policy, CAP, post 2020, the stacking of entitlements should be reintroduced as an option for tillage farmers. Third, there is a need for a derogation for Ireland on greening requirements given our difficult climatic conditions. In that context, crop diversification rules exacerbated crop losses in 2016 and again in 2017, especially in coastal areas and western counties. Equivalence thresholds for the establishment of catch crops should be aligned with the crop diversification rules and not at 100%. This would deliver greater environmental benefits, reduce unnecessary bureaucracy and increase biodiversity.

The fourth element is the reintroduction of the Strategic Banking Corporation of Ireland, SBCI, agriculture flow loan support scheme to give greater access to competitively priced credit. The scheme must be expanded in order that tillage farmers can access affordable credit on an ongoing basis, particularly given the fact that many of our EU colleagues can access funds from 1% to 2%.

Fifth, we need full support from all industry stakeholders for the use of native Irish grain. It is unacceptable that native grain continues to trade at a discount to imported, given that Ireland is not self-sufficient. In that context, we also need mandatory Department inspection and screening of grain imports to exclude economically damaging weed seeds such as black grass and sterile brome. Furthermore, we need to see the establishment of a certification scheme to maximise the use of native grain and proteins in Irish livestock rations as well as increased use of native grain and Irish malt in the production of Irish whiskies and artisan or craft beers to grow our malting barley sector.

The sixth element is action by the EU to lower input costs. This would include support for the IFA case for the immediate suspension of anti-dumping duties on ammonium nitrate and the abolition of tariffs on fertiliser imports. EU fertiliser manufacturers have pushed through significant price increases in recent months, with CAN prices now up €50 per tonne over the past three months. This is despite the fact that natural gas prices remain significantly below historical levels. The retention of key active ingredients, including glyphosate, triazoles and diquat, among others, is needed to ensure we can produce competitively priced produce. We also need to see a review by the Directorate General for Competition of the cost of plant protection products.

The seventh element in our action plan is stronger tillage sector support under various farm schemes, including a specific environmental payment to encourage beneficial crop rotation and increased funding to allow for the expansion of the protein crop area eligible to receive the full coupled payment.

The eighth element is the development of a national policy on the bio-economy including the roll out of a properly targeted renewable heat incentive, RHI, scheme to drive on the development of a successful bio-energy sector using crop residues and funding for the development of regional biomass trade and logistic centres that optimise the sustainable mobilisation of Ireland's biomass resources.

Collectively, we need to devise and urgently implement a robust action plan to reverse the dramatic fall in tillage fortunes. The sustainability of our livestock and drinks manufacturing industries are dependent on a vibrant arable crop sector. An increased reliance on grain and non-grain feed ingredient imports will undermine the provenance of the Irish food brand. National policy must instil confidence in growers showing that the Government is serious about revitalising the tillage sector. The development of a targeted tillage action plan will send a strong message of support to all growers.