Oireachtas Joint and Select Committees
Tuesday, 22 June 2021
Joint Oireachtas Committee on Agriculture, Food and the Marine
Organic Farming: Discussion (Resumed)
Before we begin, I remind members that in the context of current Covid-19 restrictions, only the Chair and staff are present in the committee room. All members must join remotely from elsewhere within the parliamentary precincts. The secretariat can issue invitations during the meeting on Microsoft Teams. Members may not participate in the meeting from outside of the parliamentary precincts. I ask that they mute their microphones when they are not making a contribution and that they use the raise-hand function to indicate. Please note that messages sent to the meeting chat are visible to all participants. Speaking slots will be prioritised for members of the committee.
Today's meeting is in two sessions. The agenda is organic farming. The first session is from 3.30 p.m. to 4.30 p.m. and is an engagement with representatives from Teagasc and Bord Bia. The second session, from 4.30 p.m. to 5.30 p.m. is an engagement with officials from the Department of Agriculture, Food and the Marine. I welcome to the meeting Professor Gerry Boyle, director, and Dr. Mary Ryan, specialist researcher in the agricultural economics and farm survey department of Teagasc and Mr. Padraig Brennan, director of meat, food and beverages; Ms Gillian Willis, small business development manager, and Mr. Lorcan Bourke, senior manager of horticulture at Bord Bia. The committee has received the witnesses’ opening statements which have already been circulated to members. We are limited in our time due to Covid-19 safety restrictions. The committee has therefore agreed that the opening statements will be taken as read in order that we can use the full session for questions and answers. All opening statements are published on the Oireachtas website and are publicly available.
Before we begin, I will read the notice on parliamentary privilege. Witnesses are protected by absolute privilege in respect of the evidence that they are to give to the committee. However, if directed by the committee to cease giving evidence in relation to a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given. They are asked to respect parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her, or it identifiable. Participants who join the committee meeting from a location outside of the parliamentary precincts are asked to note that the constitutional protections afforded to those participating within the parliamentary precincts does not extend to them. No clear guidance can be given on whether or the extent to which their participation is covered by the absolute privilege of a statutory nature.
I now invite questions from members to witnesses. I will start with Senator Daly.
I welcome our guests and I will desist from wishing Professor Boyle bon voyageagain. As this is the third time we have met since I first did so, I will desist today. I have some broad-ranging questions on which both groups might comment.I also have some specific questions for Bord Bia and Teagasc. Broadly speaking, we had a discussion last week with the organic organisations and the farm organisations. When one reads their submissions and, indeed, the submissions of witnesses today, the increase in consumer demand is very encouraging. Yet, we are not getting a like-for-like increase in the uptake of organics from our farming community. I ask the witnesses to explain why they think that is. I refer to a scenario in which we were to get up to speed on our predictions and targets by getting to a 7.5% rate of organic farming, which is the current European average and is our target. I assume that by the time we get there, that target will have moved out. I would like us to get somewhere closer to the low or high 20s, like some of our European colleagues. Were we to achieve that, in the witnesses’ respective opinion would we have the markets for the associated production that would deliver? If not, where and how can we source those markets?
With regard to the current markets, did Brexit have an equal effect on organic output and sales or did it hit organics harder in anyway? In that regard, are there replacement markets? Are there imports that we could replace easily here and produce locally? With that in mind, I have a question. I do not need a scientific answer but in the opinion of the witnesses, when does an organic product cease being organic if we are to take into consideration the carbon footprint of its transportation?
For Teagasc specifically, I note we have received the documentation on education. I am familiar with its input into the education of farmers and would-be organic farmers. What is Teagasc's opinion on the education of the consumers? Is there a gap there? Is there a greater role for that agency or for other organisations when it comes to educating our consumers and enhancing our markets? I refer to a recent article in the Irish Farmers' Journal in which it was stated that there was underfunding within Teagasc for organic research, in comparison with other areas. The witnesses from Teagasc might comment on that.
Turning to Bord Bia, what is the position in respect of market expansion? As I say, if we achieved our target of 7.5% or more of land in organics, would we still have markets for that volume of product?
Mr. Padraig Brennan:
I will make a start and then allow Teagasc to come in on a number of those questions because they are quite broad-ranging. I thank Senator Paul Daly for the questions and I thank the Chair for the invitation to speak this afternoon, which we greatly welcome. I will take the questions one by one and please let me know if I do not answer them satisfactorily for the Senator. In terms of matching organic demand with supply or vice versa, when we look at demand for organic food over the past year, the Irish market has seen a growth rate of 16% in the retail value of organic food sales in Ireland. That is a strong growth rate. It is ahead of the total grocery market. We have to keep in mind that it comes from a relatively small base, in that we are still less than 2% of the total grocery market. We have seen over the last number of years some growth in the number of organic producers. This year’s organic farming scheme will see more producers coming through, over the coming years. Even in terms of the number of producers that are there, if we take the sheep sector, for example, there is considerable leakage of organic store lambs into the conventional sector.
Three out of every four store lambs that have been reared organically are being lost into the conventional sector and, therefore, are not slaughtered or processed as organic lamb. If we could minimise how often that happens, we could boost supply straightaway. With regard to other products, fruit and vegetables are obviously the main category when looking at organic produce. The level of imports into the market is very high. We cannot produce some of those products here but we could potentially produce others here if the price was right. It can be a challenge to produce such products competitively. There is potential for more supply to come through, which is very positive. I see demand continuing to grow. Maximising what is being produced on the ground is probably the first step.
With regard to whether markets exist if we were to achieve the target of 7.5%, we just kicked off a major piece of work with regard to market insights. We are looking not only at the domestic market in Ireland but also at the key export markets across Europe. We are particularly looking at the opportunities and potential barriers for Irish organic produce if and when we get more supply coming through the system. We want to look at matters sector by sector and see where there are opportunities to grow our presence overseas and to develop the domestic market further. Looking at trends seen across Europe, one would certainly see potential markets for more Irish organic produce over the coming years. We are hopeful that this insight will show positive outputs and give us a really good handle on where opportunities might exist.
With regard to the impact of Brexit, it is probably fair to say that the organic sector was not hit any harder than other sectors. One area affected was organic livestock as we tend to import a lot of grain for animal feed at times. That was delayed and disrupted for a period of time and such grain has become more difficult to source. That has an impact on our livestock output, particularly with regard to beef. However, by and large, the market in the organic sector was no more disrupted that the market in the conventional sector.
With regard to whether there are imports to Ireland which we could potentially replace, it comes back to fruit and vegetables in particular. If we can competitively produce some of the vegetables in particular, we could potentially offset some of the imports coming in. Likewise, in the cereals sector, we are only producing half of what is needed to meet the demand for organic oats. There is certainly potential there if we can get growers to start coming through the system. Even from the perspective of animal feed, if one could get more organic cereal growers into the system, it would help minimise that issue. There are certainly areas of imports which we could target over a period of time.
The Senator asked when an organic product loses that status because of food miles and so on. When considering the issue of food miles, one must keep in mind that these typically represent a very small proportion of the overall footprint of a product. The work that we have seen and the work we have done over the years in looking at some of these areas would suggest that the issue of food miles is not significant. Examples have come up in the past. New Zealand lamb coming into Europe is an example but the food miles aspect only made up approximately 2% of the product's overall footprint. The proportion of the overall footprint involved is relatively small and probably smaller than one would expect.
I know the Senator directed the question of consumer education towards Teagasc but perhaps I will also touch on it briefly. There is certainly a very positive attitude towards organic food and organic products generally among Irish consumers in particular. There is potential for consumers to purchase more but we are starting from a really positive position with regard to their perception of organic food. There is also a willingness to pay some extra for organic food. Research we did at this time last year suggested that half of consumers are willing to pay a premium in the region of 10% for an organic product compared with an equivalent conventional product. There is more work we could certainly look at doing as supply comes on board but we are generally starting from a positive point.
With regard to market expansion, we are hopeful that there is potential to grow the position of Irish organic produce on the Continent of Europe, in the British market and in the domestic market over time. To return to the Senator's first question, a delicate balance must be struck in matching supply with demand. We must ensure there is a supply pipeline coming through. If we create a demand among customers on which we cannot deliver, that can cause issues. We may be turning away longer-term opportunities if customers cannot get a product from Ireland or from an Irish producer. It may sometimes benefit the importers of such products more than Irish producers. We have to be as co-ordinated as possible in that regard.
Mr. Padraig Brennan:
From an export point of view, there are already some decent international customers for Irish organic beef. When one is exporting meat, one needs a certain degree of scale in one's operation if one is to be in a position to supply on a consistent basis. At the moment, organic cattle are making somewhere around €4.90 or €5 per kilogram. That is 10% or 12% ahead of the conventional equivalent. It is a little bit less of a premium for organic stock than may have been the case this time last year or two years ago but the price of conventional cattle has increased quite a bit so far this year, and over recent months in particular, whereas the price of organic cattle tends to be more stable. It does not have the same fluctuations up and down. There is a premium. There are some challenges even in the organic cattle sector, although perhaps to a lesser extent than in the organic sheep sector, which I mentioned before. There are probably some organic cattle that are not being processed as organic and which are being lost to the conventional sector. There is potential to grow the volume of organic beef a bit more.
Professor Gerry Boyle:
I thank the Chairman and the committee for the invitation to this afternoon's meeting. I also thank Senator Daly for his comprehensive question. I will not cover the areas that Mr. Brennan has addressed but rather focus in on the Senator's last three points. The first relates to the very interesting question of the link between organic credentials and sustainability. There is certainly a very strong link between the two. They are very much correlated. The committee will be aware of an initiative recently launched by Teagasc, the Signpost programme. This involves the establishment of 100 demonstration farms across the country. These will demonstrate sustainability in action on farms. We plan to have approximately five organic farms represented in that network. That will give us an opportunity to link the credentials associated with organic production and sustainability. From a marketing point of view, both types of credential should reinforce one another because clearly organic farms and organic produce will have a lower carbon footprint. It will also benefit biodiversity and improve water quality. Organic farming also leads to far lower ammonia emissions. I absolutely agree that organics and sustainability should reinforce each other and that this should be a marketing strength, particularly in export markets.
Senator Daly asked quite an interesting question in respect of education. Teagasc does not have a direct mandate as far as consumer education is concerned although many of our research programmes involve outreach to the wider community. There is certainly an opportunity for us to link with the likes of Agri Aware to reinforce the positive messages about organic consumption to potential consumers.
It is something we would very much like to be part of and, indeed, embrace.
A question in respect of underfunding of research on organics was also raised. I would not agree with that of course, but I understand where the question and issue are coming from. During the 2008-2009 recession, Teagasc, along with many other State organisations, had to greatly rationalise how we delivered services. We took a very long, hard look at the investment we had made in research demonstration farms. We came to the conclusion, not only in respect of organics, that it would be far better to work more closely with real commercial farms and implement research and demonstration programmes in that context. That is a path we have gone down in recent years and experience has borne out the wisdom of that change in direction, so to speak.
When it comes to organics, we work very closely with the Department of Agriculture, Food and the Marine in developing research farms. We now have approximately 12 farms in total that are classified as organic demonstration farms. We use those farms to illustrate the latest developments in research. I should make the point, and I have said this on a number of occasions, that we are very fortunate in agriculture, particularly in our grassland systems, that we adhere to principles that are quite closely related to organic credentials. It is not difficult to extend the organic principle to, if you like, fully accredited organic farms. Our emphasis, for instance, on grassland management is at the core of any credible organic system when it comes to livestock production. We have an extensive amount of research under way on minimising the use of chemical nitrogen and, in fact, we have a programme on one of our research farms, Soloheadbeg, which focuses on zero chemical nitrogen application. That, of course, is replicated in the organic context. Similarly, we are now doing extensive work on multi-species swards on a number of our sites. Again, that can be carried over into the organic sphere.
There has been a change in emphasis regarding our past investment in research demonstration farms. We are now embracing, and have for a number of years, a closer involvement with commercial farms, because at the end of the day we have to convince farmers to adopt new technologies and systems. Farmers are much more receptive when they see other real-world farmers implementing change. That is the rationale behind that shift.
I also thank Mr. Hayes for coming before the committee. I have three questions for Teagasc and three more for Bord Bia. For Teagasc, we are far below where we should be in terms of the amount of land used for organic farming and, considering our reputation for world-class product, it is hard to understand why. We have set ourselves targets but we are starting from a very low base. In the context of moving ahead as quickly as we can, I ask Professor Boyle to tell us what he believes has been the largest impediment to increasing the level of organic farming in the country. On the issue of speed, are there certain types of land that are more immediately suitable for organic farming, such as hill lands where fertilisers are less commonly used?
The IFA has stated that the organic sector is under-resourced when it comes to a number of factors, including production research and development of specialised advisory services. Is this Professor Boyle's experience? He just touched on this issue. As Tipperary proudly boasts the most fertile landscapes in the country, I ask Professor Boyle to tell us about the work being carried out on pasture-based dairy in Solohead and how it is progressing. I will come back in with questions for Bord Bia.
Professor Gerry Boyle:
I agree with the Deputy's remarks about Tipperary, as I am sure the Chairman would. I will ask my colleague to pick up on the issue of challenges in increasing the level of land devoted to organic farming. The Deputy asked questions about land type. As he is aware, by far the largest group of farmers are involved in organic production. That is perfectly understandable because it is a sector that has a low chemical usage footprint so the obstacles to conversion to organic farming are not as great as in other sectors. Therefore, for any land that is suitable for livestock production, which would include a lot of hill land and, indeed, land suitable for sheep production, expansion would be expected to occur in those sectors.
The Deputy raised a comment on the resources devoted to organics within Teagasc. I will not go back over my earlier comments on research. When it comes to the advisory side, Teagasc tries to allocate its resources, roughly, in respect of the economic value of the different sectors. That is something we pay very close attention to. Before the recession, we had four, what we call, specialists involved in organics. The current position is that we have two on a national basis. I set out in my opening statement a commitment to employ an additional specialist adviser, which will be a total complement of three. I am sure many committee members will say that is not enough, but I ask them to bear in mind that we have a total of five specialists engaged in dairy production. That will give them an idea that I consider three specialists to be a number commensurate with the value of the output from the organic sector.
Of course, we would like to have more but it is important we put the figure in context. Specialist advisers operate at a national level and give direction to the service at a regional level. Those three specialist advisers, and there will be three of them in place in the not too distant future, will feed into a network of approximately 15 advisers who work in our 12 advisory regions throughout the country. Obviously, they have other work to perform but we consider that is a significant resource commitment.
The Deputy mentioned the work at Solohead. Again, I instanced that in my earlier reply to Senator Daly. The work we are doing at Solohead has applicability to conventional dairy systems but our focus on grassland production and, in particular, minimising chemical usage is obviously very relevant to the organic sector. We are learning quite a lot about how farmers can minimise the use of chemical inputs, thereby saving on expensive inputs on the one hand and boosting profitability on the other, but also, very importantly, reducing their environmental footprint.
Before I ask my colleague to comment on the wider challenges, I wish to say that organic farming clearly demands an exceptional level of management performance, irrespective of the sector. That means farmers must be trained to a very high level. We see our educational programmes as being particularly important in this respect. We will be looking to expand the opportunities for education and training into the future. Dr. Ryan might respond to the question of challenges faced.
Dr. Mary Ryan:
I thank Deputy Browne for his questions. In terms of what is the biggest impediment, there are many and they can depend on the sector one is coming from. For example, we are doing research on the barriers to conversion to dairy organic. The research suggests that challenges are not just around the farmers converting to organics, setting up the new system and becoming certified, but that a whole system-wide change needs to happen. All of this needs to happen at the same time. While farmers need to move into conversion to dairy, the wider sector and the value chain, in particular, need to move because there is a big investment required in stainless steel for segregation of milk and for processing. All of that must happen together if any meaningful increase in production is to take place.
For beef and sheep farmers, the changes that are needed may not be as big, particularly on the type of soils referred to by the Deputy and where farmers are already very close to farming in an organic or agroecologically-friendly way. At the same time, change is hard for all of us from a behavioural perspective. There are restrictions, new rules and regulations to take on board. There are costs to take on in terms of animal bedding and changing one's system of farming. There are grants under the targeted agricultural modernisation scheme and the organic investment scheme to cover some of those costs. There are, not necessarily competing schemes, but other opportunities for farmers to avail of. This year the new results-based environment agri pilot programme, REAP, scheme was introduced. It will run for two years and there is quite a bit of money involved. Some people might say, anecdotally, that for the current scheme some farmers chose to take the shorter-term options like REAP rather than making a longer-term commitment. As the director said, there is a big challenge in upskilling. The advisers and specialists will say that to make it as an organic farmer, a person needs to believe in the environmental and sustainable ethics of organic farming, as well as being a good manager.
One can clearly see that in the last five to ten years, there is a much greater convergence between what were once called conventional farming methods and organic farming methods. One now finds that many of the methods that were considered purely organic five years ago, are being adopted by conventional beef, dairy and sheep farmers. There is a much greater convergence towards a sustainability route. Hopefully, those challenges will not be as big in the future.
I have a few quick questions for Bord Bia representatives. This committee has heard how organic farming is more labour intensive than conventional farming. This means that organic farmers need to see a higher price premium for their product. Does Bord Bia bear this in mind when marketing organic produce? Is there an understanding that because of the higher production costs, the product is going to cost more for the consumer? If there are higher costs involved in the production of organic produce, does this mean that Brexit will be particularly difficult for this sector? What is it about the German organic production approach that has made it such a key market and source of organic produce? In reference to the Irish exports, do the witnesses know what the balance between supply and demand is? In other words, what is the level of demand compared to our ability to supply?
Mr. Padraig Brennan:
Yes, I will. I thank the Deputies for their questions. In terms of higher prices and whether they are kept in mind - yes, they absolutely are. In terms of the market opportunities that are identified, the question is about where the premium exists and recognising that there is a higher cost of production associated with organic farming. That is seen on the livestock side in the price of organic lamb or finished beef animal relative to conventionally farmed meat where there is a 10% to 15% price difference. This, likewise, is seen on the dairy side, and the fruit and vegetable side, perhaps not to the same extent at times but it is certainly seen. This is kept in mind and the aim is to position Irish organic produce as strongly as we can where we see the opportunities arise.
I refer to Brexit and the associated difficulties. Brexit has been a challenge and will continue to be a challenge for every food, drink and horticultural company in Ireland, not just the organic sector. I am not aware of any additional challenges presented by Brexit to the organic sector relative to the conventional sector.
As to why Germany has been so successful, a long-term approach has been taken there. If one looks at the market, there are so many different regions within Germany that there have been different approaches taken to see where the levers they could pull to get successful growth happen to be. There are many experiences that we can learn from in Germany. I referred to a market inside study earlier. One of element of that is to look at the likes of the German market as a case study and see what we can learn for its approach. We can then feed that back to the sector more generally, not just from a Bord Bia point of view and consider the things we can collectively do to accelerate the growth of the organic sector here as well.
From an export point of view in terms of demand relative to supply, over the past six to 12 months one area that has come about because of Brexit, to some extent, is that we are increasingly being asked about our ability to supply continental European markets that were traditionally supplied by the British organic producers. A couple of months ago, we had an organic red cheddar cheese producer inquiring about whether we could supply it outside of Ireland. We ran into challenges with dairy producers here because of the availability of milk and the colouring necessary for the red cheddar. There was a challenge in being able to meet that demand. We have seen that happening more often over the last 12 months on a specific case by case basis. Potentially, there is more demand in the export markets than we have a supply for at the moment. There are also competitors in those markets. I refer to Mr. Boyle's point from earlier about how we position organic produce from Ireland and keep our focus on where we can achieve the premium that was mentioned at the outset.
I welcome our guests here today. I am unsure whether it is a conflict of interest any longer, but I was an organic farmer up to last year. My son is an organic farmer now. In the 20 years that I was an organic farmer, it was the nearest thing to the biggest farce that is out there at the present time. The price of cattle never changed. If a farmer lived in a peripheral area, such as in most of west Cork, there was no opportunity to sell his or her cattle. There was one buying somewhere in the country and the farmer's time was spent trying to chase that buyer. It was very difficult to find a market for them which was a shame. In my view, the local marts should have been used at roughly the same time weanlings were being sold, and they should have set aside a time to sell organic cattle but that never took place. For any young person starting off in beef farming, it is shameful.
Every day of the week in the Dáil, we are told about new eco-schemes. We have a great scheme in the existing organic scheme. That is not the witnesses’ fault, but the Department and others need to be educated about how to further progress the current organic scheme. They do not need to dream up any more schemes. That is how I feel about it. It is only a dream because they have a scheme that they cannot progress any further. The bottom line is that farmers are not getting the right price for their cattle. If they do not get the right price for their cattle, it will discourage young people from going into organic farming. What is the price difference between organic and conventional beef?
What is the price difference between organic and conventional produce? Do the witnesses see a way forward for young people - or people of any age, for that matter, including start-up farmers - who get involved in organic farming to get a market or proper price for their cattle? In my case, and I am not the most active farmer, the bottom line is I would have sold my cattle as organic if I could have but I was selling them on the ordinary market, the same as every other farmer who had weanlings. I will have more questions for the Department later.
Mr. Padraig Brennan:
On the beef price difference, at the moment an organic finished animal is selling for somewhere between €4.90 and €5 per kilogram. That is a premium of between 10% and 12% over and above the average price achieved for a conventional animal at the moment. That is somewhat narrower than what the difference would normally have been but, as the Deputy mentioned, there has been stability in the organic price whereas the conventional cattle price has fluctuated more. We have gone through a stronger period in conventional cattle prices over the last three or four months, thankfully, which has meant the premium is not what it would have been two years ago, for example. There has consistently been a price premium of between 8% and 10% in recent years and in most cases it has been greater than that.
The Deputy's second point is really about co-ordinating supply. I mentioned the considerable level of leakage of animals from the organic sector into the conventional sector when they arrive through a livestock mart or whatever. Even co-ordinating that supply base better would help to make more product available and put us in a position to meet some of the supply opportunities that exist, not only in the Irish market but also overseas. There is a job to be done at an overall sector level to see how we can best co-ordinate that supply to ensure that when producers go to the effort to convert to an organic enterprise their supply continues to be in the organic channel, right through to slaughter. That would help in the average price return.
This is one of the more disappointing hearings I have attended in my time as a member of the committee. The reason is that organics have to form a big part of the solution to the challenges facing Irish farming. We know that as a country we cannot compete on price. If we try to pursue a policy that is based on quantity and price, we will always be beaten by countries such as Brazil, so we have to compete on quality. That must be the core. It is shameful that in this green isle, with its world-renowned reputation for quality product, only 2% of our farmland is in organic use. That there was virtually no recognition of this problem in either opening statement or in the subsequent remarks is a worrying trend.
In recent weeks, I have met numerous farmers who are in organics or want to pursue organics. Many of those who are in organics are slowly beginning to reach a point where they are sustainable and successful. They have told me clearly that they have done so despite the two organisations represented here, rather than because of them. Based on their interactions with their colleagues, they consider that in relation to the expertise and advice available and the marketing of our product, we are much more deficient than almost any other European country.
Will both organisations indicate their level of expenditure on organic-specific projects for each of the past three years and what proportion that makes up of their overall budget? The organic sector has grown 16% in retail terms. Was that growth reflected in the organisations' budgets? If not, that reinforces my point.
Will Mr. Brennan outline what assistance Bord Bia is providing to organic farmers directly who are seeking to market their own organic produce. This was touched on but it would be useful if we could get a clear explanation of the reason there is no organic market for cows or bulls and virtually no premium for sheep. Why do many organic farmers regard the organic symbol as being of a higher standard and more worthwhile than the Bord Bia label? Should we be marketing organic produce solely on the basis of organic accreditation?
In relation to Teagasc, Professor Boyle said that five of the 100 signpost farms will be organic. Does he agree that sets out the problem in relation to the lack of ambition and vision we have? We currently have 2% of farmland in organics and the Department is targeting a measly 7.5% but Teagasc has failed to even meet that target in its signpost programme, in which organic farms will account for 5% of farms, if that. Does Professor Boyle agree that there is a problem in the approach when he talks about the value? He mentioned the number of specialists and supports that are in place. Does he acknowledge that this needs to be based on potential rather than current value? If we are to look at potential, all the signposts suggest that the growth is in organics.
Can either organisation provide statistics on the number of animals reared on organic farms that are being sold conventionally? What percentage is leakage? Where are the failures that cause organic animals to be sold on conventional markets? Why do those failures exist and what can we do to address them?
Professor Gerry Boyle:
I thank Deputy Carthy for his questions and observations, specifically in respect of Teagasc. It is important to understand that Teagasc has a wide remit, which covers the entire agricultural sector. We do not have an unlimited budget, as I am sure the Deputy is well aware, and we have to allocate our resources in the best way we possibly can. Potential is not something we can measure. As I indicated with regard to our allocation of advisory resources, we allocate resources at possibly three times the level of the value of the sector at the moment. That embraces a certain ambition. Of course, I would like to be in a position to allocate more resources but we have to keep it in balance. For example, looking at the other sectors in Irish agriculture that are hugely important to Irish farming and that farmers also need to develop in order to be able to make a living, there is the sheep and pig sectors, for example. Horses are also a very important part of our remit, as is poultry. I would dearly love-----
Professor Gerry Boyle:
I do not have the actual expenditure data with me but most of the expenditure is tied up with salaries.
We have two specialists and will be appointing an additional specialist, compared with five in dairy. We also have 15 advisors throughout the country who the specialists work with.
Professor Gerry Boyle:
One of our specialists has just taken leave of absence. We have replaced that person and will be appointing a third specialist. In the context of the resource commitment across the board, I consider that a significant investment. The cost of taking on an additional staff member in the current climate is quite exorbitant. We also have to get sanction from two Departments to do that. I would like if we had more, of course, but we have a complement of three specialists. Consider that relative to other sectors. For example, we do not have any specialist at the moment in poultry. We have one advisor. That gives some idea of the challenges we face. I can provide the committee with the expenditure data. The data will be highly correlated with staff numbers. Roughly 80% of our cost is staff.
Dr. Ryan may have a comment on the leakage estimate. Mr. Brennan probably has a better handle on the extent to which there is leakage out of organic into conventional processing. I think he mentioned a figure earlier.
Dr. Mary Ryan:
We are doing some work for the Department of Agriculture, Food and the Marine. It is one of the actions under the organic strategy. We have preliminary analysis and are getting a big data dump from the Department shortly. We estimate about 17% of animals are lost at weanling age within the organic value chain. We have not got as far as looking at genders of animals and locations where it is happening, but we will have more information when we have that. Anecdotal evidence suggests, as some Deputies have said, that if one does not happen to be close to a processor and needs to sell animals, they end up coming out of the organic chain and that is not what the Department wants.
Mr. Padraig Brennan:
The Deputy's point that we have to compete on quality is correct. That holds whether we are talking about organic or conventional food, drink and horticultural products from Ireland. The only future for the sector is to compete on quality and get as much of our product as we can into the premium segment of different markets.
On the level of expenditure, every support and service that Bord Bia has is open to organic companies the same way it is to a conventional food and drink companies. At the moment, we work with about 100 organic companies annually as part of that. Our marketing and promotional support for the organic sector in 2021 was about €1 million. That figure has increased by a quarter over the last three years. We hope to be in a position to increase that further over the next number of years. Our total marketing and promotional budget this year is about €48 million. That is the magnitude that is there.
I have to challenge the Deputy on the Q Mark not being recognised. In the work we do talking to consumers about the Quality Mark, their acceptance and trust in it consistently comes through as being the highest level of trust in any mark on our product on the Irish market. It has the highest propensity of consumers likely to purchase a product carrying the Q Mark. There is a lot of credibility and equity behind the Quality Mark. That is not to say the organic marks and labels are not valuable. They are, for consumers buying those organic products.
On assistance for those looking to export organic products, there is a number of elements we work on. It starts with market understanding. We share data and information we have on various markets and help prospective exporters figure out where opportunities might exist for them. The second part comes down to business development, including potential leads and potential customers. We help them identify that at the likes of the BIOFACH trade fair, when we are allowed to attend it again next year. We will be undertaking a lead generation project over the summer months and into the autumn on the German market. We are trying to help the industry find opportunities and get closer to potential buyers and, where there is existing business, to help grow it, whether by promoting organic beef in the Dutch or German markets, organic lamb on the Irish market or organic seafood in France, Germany, etc. That is a big element of it.
In terms of capability, my colleague, Mr. Bourke, is leading an organic plant raiser project. It has come out of Brexit. There is an opportunity for growers to raise young plants that was not there previously. It is about building capability on the ground and providing the skill set to help them do that. Four demo farm sites or locations have been established and we will have a series of open days, while respecting Covid restrictions, for other growers to learn from the approach. There is a number of elements we focus on.
On the number of animals being lost to the organic sector prior to final processing, the Chairman mentioned three in four organic lambs. That is the best information we have. We are undertaking an organic survey on sheep farms with the organic bodies so we will have an updated figure in July. It is less when it comes to organic cattle but the best estimate we have is that around 40% are leaking from the sector.
I thank our guests. I did not think Professor Boyle and I would meet again. I wished him well in his upcoming retirement last time he was here and I continue to wish him well in his upcoming retirement. I am not sure if he will be back before us before then but we will see. I also welcome Dr. Ryan and Mr. Brennan.
Professor Boyle said the resources Teagasc is putting into organic represent three times the current value of the sector. That may be the case but the resources should reflect where we need to go as a country, whether 7.5% or greater than that. Many here suggest we should aim far higher than that. We are at 2% and aiming for 7.5%, while other countries are pushing way beyond us, including countries that perhaps do not have the competitive advantage we have in this area. In Brittany and Normandy in France, the dairy sector is at 11%, 12% or 13% organic. Denmark and Austria are over 20%.
What is feasible, given what other countries are doing and given our competitive advantage? Our expertise is there, built over many decades and generations. This is a no-brainer. We need to get into organic for all kinds of good reasons, not least climate, but also rural regeneration, farm incomes and so on. I would like the opinions of our guests on what is realistic. What should the target be? Do we need a new organic action plan?
I chair the climate committee and this morning we had Macra na Feirme in.
Its representatives spoke about organic farming and its potential. We also had Dr. Oliver Moore from University College Cork, UCC, appear before us. He said the current action plan is not fit for purpose. Are we being too cautious? I do not understand why Ireland is lagging behind and why we cannot quickly accelerate the proportion of farming that is organic. Dr. Ryan made a helpful comment, which was that whole-system change is required. That generally is the case when we want to do something quite radical. What is required to bring about system change in order that we fulfil our potential in this area?
Professor Gerry Boyle:
I will kick off and then Dr. Ryan might join in. When it comes to ambition, clearly the European Green Deal, as we say in our opening statement, sets a horizon point. The strategy is pretty new and it lays out a target of 7.5%. What is realistic is a difficult question. In part, it is based on past experience and the slow rate of growth. The amount of time it has taken even to build up to the modest 2% is indicative of underlying real challenges, when it comes to developing this opportunity. Second, if one looks at the structure of Irish agriculture, it is not surprising that the vast majority of organic farmers at the moment are involved in beef production. I think it was Deputy Michael Collins who made the point earlier that there are serious market challenges in that respect. As we go forward and look at the challenges that beef and dairy farmers will have in addressing climate change targets, the biggest challenge that beef farmers face in this country, and have done for several years, are the extraordinarily poor levels of income. These are entirely supported by direct payments. The market returns are poor, whether in conventional or organic production. As Mr. Brennan said, the premium is relatively modest at the moment.
The technical challenges to managing a beef farm are quite extraordinary, even under conventional practices, as the sector is faced with difficult market conditions. For that reason, as well as the dominance and nature of the beef sector, the demographics of the sector, the skill and educational levels and so forth, all make me exceptionally cautious about trying to exploit the opportunities. There is no one at this meeting who would not like to see us approaching the levels that are set out in the European Green Deal or, indeed, substantially developing from our position at present. However, we have to face up to the realities in relation to the obstacles that confront farmers. We will do our best. Education is crucial. The whole management system - I think the Deputy mentioned this - is an entire turn-around in the approach to farming practices. That will require significant investment by ourselves and by farmers. The farmers have to be prepared to undertake significant investment in education, for instance. Farmers, particularly those in the beef sector will ask themselves whether, at the end of that investment, they will get the premium in the marketplace that would justify that investment? Will they get the premium in the marketplace that would offset the risk taken by not being able to use conventional inputs and so on? Farmers are canny at assessing these kinds of issues. Irish farmers are risk averse, in my experience. All these factors militated against us being over-optimistic about what is possible. Personally, I think the 7.5% is a stretching target, if we can deliver it. Dr. Ryan may wish to make an additional comment.
Dr. Mary Ryan:
To add to that, it took ten years to get from 1% of utilisable agricultural area to the 2% that we are at now. That is 74,000 ha. This year, the new applicants for the scheme will constitute a 15% increase on what was there before. If one could manage a 15% increase year on year, one would get close to the 7.5% target. However, as some of the Deputies already mentioned, there are specific value chain and marketing issues. There are two separate elements involved in trying to get more organics, namely, encouraging more participation and sorting out those value chain issues while developing the market better. It is a chicken and egg situation with any of these schemes. One has to have to have participants to start off with but one gets to a stage where the value chain must be developed as well.
In terms of that innovation system approach I mentioned, we do this work in relation to the barriers to conversion to dairy organics. We have done this work in other projects on farming afforestation and water quality improvement measures. It involves sitting down with stakeholders right throughout the system from the farmer to the people who influence decisions, all the way along. It could be market, research, advice, rural development considerations, processors, people who are direct selling or people who have small businesses. It is a case of sitting down with everybody in the sector who influences part of that system to see where the linkages are where there are gaps in the system that need to be addressed. We find it very useful as a research tool. It practically-based as well.
I will come back while I still have time. I can understand farmers being risk averse; they are right to be. Surely, however, agencies like Teagasc and Bord Bia that advise Government and farmers need to have ambition because if they are not doing so, of course the farmers will not get on board. It seems to me that we do the capacity to compete with our European neighbours and to increase that percentage right up, far beyond 7.5%. I am sure that people in Austria or Denmark would make the same argument that it is hard to do it. The idea that Ireland, with its tradition in agriculture, agricultural education and research, has this modest target which is being eclipsed by other countries that do not have anything like the tradition we have but which are far in advance of us does not make sense to me. We need to hear it from Teagasc, as well as from Bord Bia because the route-to-market side of it also is critically important. Unless we hear it from the witnesses, the farmers will not get on board. We will be asking ourselves in a few years' time why we are at 3% or 4%. We will be asking why do we still have huge problems associated with perhaps more conventional agriculture that we could have mitigated had we gone down a more ambitious route in 2021.
First, I welcome our guests and particularly Professor Boyle, who I also wish well. He is back and is a great man for bouncing back. I have two or three points to make. Many of the issues have been covered. We have now heard a lot about participation in organics. I have a lot of admiration for Bord Bia, which has huge budgets.
In one of this committee's discussions, we touched on the question of whether Bord Bia should have a percentage of its marketing budget ring-fenced for the organic sector. Would that keep the pressure on? Would it be good? I would like to hear Mr Brennan's views on that. Based on what Dr. Mary Ryan talked about, we have to have participation, knowledge, knowledge transfer and training. We also have to have added value. That is also important. Dr. Ryan made this point really well in terms of the value chain. Ultimately, we have to have markets for organic produce. That is where Bord Bia comes in. I salute Bord Bia because it is an amazing organisation. Despite what others have said, I believe its branding is strong. Its credibility and integrity are strong. There has been some criticism of organics in respect of mushrooms. A certain organisation whose representatives appeared before this committee suggested the Bord Bia brand should be removed from mushrooms because peat is used in their production, but that is another debate for another day.
Since Professor Boyle is here, let me mention that Mr. Tony Pettit has done amazing work on Teagasc's education courses, prospectus, knowledge and farm walks. We have had Covid for a year and half and that has significantly restricted what could be done. I recognise that. I have been on many farm visits and farm site walks. They are really informative. We learn from meeting people, not out of a textbook. I refer to conventional agriculture, horticulture and forestry but also the organic model, which is not as pronounced and large as we would like. Could Bord Bia speak about the idea of ring-fencing a percentage of its budget for organics?
My next point is for Teagasc. There is great interest in organics. I hear what Professor Boyle is saying about training and resources. We had representatives from the Irish Organic Association and Organic Growers Ireland before the committee recently. Both bodies identified the need for more interest, learning and knowledge transfer. There is room for more. I do not buy into the idea that everyone needs a third level qualification or university degree in horticulture or agriculture to be a good practitioner of organic horticulture, forestry or agriculture. Between apprenticeships, internships and other forms of learning, there are possibilities. Many people are locked out of participation in agriculture, horticulture and forestry because there is not a broad range of courses.
I salute both organisations, particularly Teagasc, because they are exemplary. Admittedly, there are difficulties and challenges, including in respect of climate change. What Deputy Leddin said was true and focused in that we have got to be more ambitious. From what I have heard today, I am not too sure whether Teagasc and Bord Bia are as ambitious as the Government and others. I do not get the sense from the presentations today that the organisations are jumping with enthusiasm and ambition to develop organics. Organics only has a partial role. It will not be the be-all and end-all but support is needed. I thank the guests and salute both organisations because they do a hell of a lot of work. If they did not exist, we would certainly miss them.
Mr. Padraig Brennan:
I thank the Senator for his questions and comments. They were all constructive, in fairness.
To return to the previous question and to be clear, Bord Bia absolutely sees potential for growth in the organics sector. When we consider the investments being made through the organic farming scheme and organic processing investment grant scheme, we realise there are positive signals. These give confidence on the ground regarding the investment and support that will exist.
Dr. Ryan touched on a really important point in her last answer. Much of the potential will not be realised if we do not co-ordinate. Co-ordination will be critical right through the supply chain. There is no point in us finding market opportunities if we do not have the supply and there is no point in supply if we do not have the market opportunities. It really requires strong co-ordination right across the sector. That is why the organic sector strategy group is critical. A comment was made earlier that we need to start again. I do not believe we do; we need to utilise the existing strategy group and collectively figure out how to address some of the challenges. There is no point in us believing everything is straightforward. If we are to realise the potential, there will be challenges to overcome but we will overcome them only if we proceed in a co-ordinated manner.
Bord Bia tries to take a market-led approach to everything it does. We have a proven track record in investing our budget where we see demand and an opportunity to grow, be it in the organic sector or any of the conventional sectors. In making our investments and in light of the market insight study on future opportunities and barriers to be overcome, it is a question of us collectively identifying the prize and the barriers that have to be overcome to get it. That is critical for us. We will take a very flexible approach to how much of our budget is allocated to the organics sector as opposed to anything else as and when we see the potential. It is not simply a matter of ring-fencing; it is a matter of identifying the potential and what needs to be invested to stand the best chance of availing of the opportunities that exist. We are committed to taking this market-led approach to everything we do in terms of organics but co-ordination will make the difference between being collectively successful and, I hope, coming back here on a future date and saying we are on the right track and being in the challenging circumstances we have been in for the past few years.
Professor Gerry Boyle:
Senator Boyhan mentioned the importance of organics. We are very strongly advocating organics in our education programme. We have recently developed a continuous professional development, CPD, programme directed at farmers. It is probably one of the first in Europe. Farmers will receive CPD points for undertaking and completing courses. I see a great opportunity for pre-conversion courses to be delivered in a CPD format. It is certainly a matter I will be talking to colleagues about.
We keep coming back to the point that there are significant technical challenges associated with organic livestock production. Similar challenges will exist in conventional livestock production because of the climate change issues. Farmers have to learn a whole new way of farming. They will have to adapt to a much lower chemical input. That involves a revolution in how they approach the whole business of farming. In this respect, the challenges facing organic and conventional farmers are very similar.
Let me put on my economist hat on for a minute and consider the situation from the point of view of an organisation such as mine, which advises farmers. The market is critical. We have to be alert to the signals the farmer gets back from the market, particularly in respect of the likely premium the farmer will generate, because ultimately these are what are going to drive responses. It is almost like creating a new value chain. There almost has to be intervention to make the market. The kinds of premiums we are talking about in beef, which Mr. Brennan mentioned, are very disappointing premiums to drive a significant response. That is a reality. That is what makes me a little cautious because I hope members understand that when our advisers go out to talk to farmers and refer to planning for the future, it presents a major challenge for them. We have to be very conscious that we are putting the farmers on a path on which they can better themselves in terms of their livelihood and the sustainability of the enterprise. That is why the matter has to be considered in the round. Admittedly, education and advice are important, as is research, but the market context is critical.
There has to be such an incentive on a continuous basis. It is particularly challenging in the case of dairy and beef, which are the areas most favoured by organic producers.
I thank the witnesses very much. We have gone over time, which shows the interest the committee has in organics and in the role it has to play in dealing with the challenge of climate change and reducing our emissions. I propose that we suspend the meeting for two minutes to allow the other witnesses to take their seats.
I apologise to the departmental officials. The last session ran over time. It really illustrates the interest people have in organic farming and the role it can play in facing up to the challenges of climate change and reducing the country's emissions from commercial farming.
For this second session of the meeting, I welcome the following officials from the Department of Agriculture, Food and the Marine: Mr. Colm Hayes, assistant secretary with responsibility for organics, Mr. Kevin McGeever, assistant principal officer in the organics policy division, and Mr. Seamus Barron, agricultural inspector in the agri-environmental inspectorate division. They are all very welcome to the meeting. I understand that Mr. Hayes is going to make a brief opening statement. I hope he will keep it to between three and five minutes in order that we can get questions in from members.
Witnesses are protected by absolute privilege in respect of the evidence that they are to give to the committee. However, if directed by the committee to cease giving evidence in relation to a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given. They are asked to respect parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her, or it identifiable. Participants who join the committee meeting from a location outside of the parliamentary precincts are asked to note that the constitutional protections afforded to those participating within the parliamentary precincts do not extend to them. No clear guidance can be given on whether or the extent to which their participation is covered by the absolute privilege of a statutory nature.
I now call on Mr. Hayes to make a brief opening statement.
Mr. Colm Hayes:
I thank the Cathaoirleach for the opportunity to address the committee today to outline the Department’s policies and supports for the organic food and drinks sector in Ireland. This is an area of increasing priority and ambition for the Department and it is useful to take stock and hear from all stakeholders on how we can collectively realise that ambition.
The organic sector in Ireland, while a relatively small component of the overall agrifood sector with approximately 1.8% of the land area under organic production, is experiencing considerable growth at present. The area of land under organic production now stands at approximately 74,000 ha, an increase of nearly 50% since 2014. This has primarily increased because of the expansion of the organic farming scheme under our current-----
Mr. Colm Hayes:
The area of land farmed organically in Ireland is still extremely low when compared to other EU member states, as the committee discussed earlier, with our average lying at 1.8% compared to an EU average of 7.5%. There is a commitment in the programme for Government to achieve this EU average in the lifetime of this Government and we are working extremely hard to achieve this. This is also part of our commitment to achieving the goals of the EU farm to fork strategy and the European Green Deal. I will speak to the policies and supports on this shortly.
Organic farming is, of course, not just a market issue. It is also a key driver of our environmental targets for the agriculture sector. Our analysis of the level of climate benefits derived from the conversion to organic farming indicate that, due to the elimination of chemical nitrogen fertiliser and a 10% decrease in the stocking rate on organic farms, a corresponding reduction of 0.1 megatonnes of CO2 equivalent per annum for every 100,000 ha could be achieved. This is very important as we continue to develop a revised climate action plan. There are also significant biodiversity and water quality benefits to organic farming, which will also contribute to national targets in those areas.
A significant part of our work to achieve our organic goals will be the full implementation of the national strategy for the development of the organic food sector, which the committee discussed earlier. The sector strategy group, which was established in 2018, was tasked with developing the strategy for development up to 2025. It published its report in January 2019. The strategy group comprised a wide range of representatives of State bodies, farming organisations, organic control bodies and a wide range of other stakeholders. The strategy sets out measurable strategic objectives for each subsector and incorporates actions considered essential to further support the industry’s development. The strategy includes targets and actions across all subsectors, to be achieved by 2025. It has also 27 cross-sectoral actions. The implementation of this strategy is an overarching priority. It is critical to the further development of the organic sector in Ireland.
There is a dedicated implementation group to monitor the implementation of the strategy. This comprises the bodies and organisations to which a lead role has been assigned, including the Department, Teagasc and Bord Bia, all of which are represented by witnesses here today. A meeting of the wider strategy group also took place in the first quarter of this year to review progress to date. We publish quarterly updates on our website and we will arrange to submit these to the committee for its information.
The Department has a wide range of supports for the sector, including three specific direct supports. These are the organic farming scheme, the organic capital investment scheme and the organic processing investment grant scheme. In addition to these, we also have specific avenues of funding for registered organic farmers. They can also access most environmental and other schemes available to conventional farmers.
As for the three main supports available to the sector, the organic farming scheme is the key support. There are currently 1,530 participants in the scheme, which has a budget of €14 million in 2021, up from €10 million last year. The organic capital investment scheme provides support specifically for organic farmers for investment in buildings and machinery. This is paid at a rate of 60% for qualified young farmers and 40% for others. Total expenditure on that scheme last year amounted to €512,000. The Minister of State, Senator Hackett, also recently reopened the organic processing investment grant scheme. This provides grants to organic processors who wish to invest in developing facilities for the processing, preparation and packing of organic products. The maximum grant aid payable is now €700,000 per applicant over the duration of this scheme, which now covers the period up to 2022. This increases the overall ceiling for each organic processor by an additional €200,000 over the duration of the scheme. The total funding for this scheme for this year has increased by €500,000 and now amounts to €1.2 million.
I will now return to the main scheme, the organic farming scheme, which is the real driver of expansion. This was reopened in March of this year by the Minister of State, Senator Hackett, who secured extra funding of €4 million in the budget for this year to do so. A total of 317 applications were received and we expect to be able to accommodate all of them.
With the reopening of the organic processing investment grant scheme, together with the reopening of the farming scheme and the capital investment scheme, we are delivering on the Department’s action plan targets for 2021 to further support and develop the organic sector. We are not stopping here. The Minister of State has indicated that, subject to available funding, the scheme may be reopened for 2022, which could happen in the autumn of this year. This is, of course, subject to the budget discussions in the autumn and the availability of funding.
To turn to market opportunities, while the area under organic production has increased, production patterns are still not fully aligned with market opportunities, as the previous witnesses outlined. The aim of the national strategy is twofold. It aims to increase land cover farmed organically while aligning it to market opportunities. Most organic farmers are engaged in beef or sheep production with a relatively low number engaged in tillage and dairy. Bord Bia research shows that the categories with the greatest growth potential in the domestic market are fruit, vegetables and dairy.
While a large proportion of the organic tillage crop is dedicated to oats, there is still insufficient supply to meet demand. Growth of the dairy, meat and aquaculture sectors is also impeded by the insufficient supply of organic cereals and proteins. This deficit in supply necessitates imports, which increase costs of production and therefore affects competitiveness.
It is vital that we ensure the development of production of organic food products is in line with market requirements and consumer demand. This will be the key to the long-term sustainable growth of the Irish organic food sector. The scheme, which opened in 2018 and again in 2021, is targeted mainly at those areas of production which are currently in deficit. These new entrants will assist in addressing these imbalances. The Department believes that there is a role for every farmer in the organic farming scheme and that there are significant opportunities for growth in the export market in particular for beef and lamb. Bord Bia is assisting in developing markets for exporters.
Within the organic strategy, the lead role for the overarching cross-sectoral action of market identification and activation is assigned to Bord Bia. Funding of €300,000 has been provided by the Department to Bord Bia for its organic marketing plan for this year.
Looking to the future, as outlined, the Department and the Minister of State, Senator Hackett, are extremely ambitious about the growth of the Irish organic sector to meet the programme for Government commitments. There are a number of drivers which will help to achieve this but, as other witnesses said, it will require all links in the chain collaborating, from the primary producer through to the retail and consumer sectors.
Our main priorities in this area for the rest of the year will include continuing support to the organic sector from primary producers through to processors under the existing support schemes. It will include the development of a significantly enhanced organic farming scheme to be delivered under the next Common Agricultural Programme, CAP, from 1 January 2023. Work is ongoing on this, as is engagement with stakeholders through the CAP consultative committee and other forums. Implementation of the national organic strategy remains a key priority, with a particular focus on the development of the marketing strategy for Irish organic output, both domestically and internationally. As previous witnesses have outlined, a key point is working with farm advisory services to ensure that farmers receive the best, most up-to-date advice if considering the conversion to organic farming.
There is a significant EU element to all of this work, both within the EU organic action plan and the European Green Deal. The Minister of State, Senator Hackett, is particularly active on this and has discussed it with Commissioner Timmermans at many recent forums. We expect that this engagement with the European Commission about both the development of the next CAP and the implementation of the organic action plan and the European Green Deal will also be significant drivers of improved organic land cover here.
I thank the Chairman. The targets for the development of this sector are ambitious, as has been acknowledged, but we firmly believe that they can be achieved. No effort is being spared but it will require a collaborative approach with the appropriate level of investment. We are pleased to take any questions that the committee may have on this or to discuss any aspects.
I asked a question of Bord Bia and did not get an answer. Do the witnesses see the fact that we have only one purchaser of organic beef in the country as a serious disadvantage? We were told that a premium of only 12% is being paid on organic beef at the moment compared with commercial beef. Do the witnesses think that is a result of only having one buyer of organic beef in the country? The other point is that 40% of our organic beef and 75% of our lamb is seeping out of the system and has to be sold as commercial beef or lamb. There was a second outlet for organic beef in the past. That was allowed to be purchased by another player in the beef industry. We now have two outlets for organic beef all under the one banner. Do the witnesses feel that that is a serious disadvantage to getting a premium price for organic beef?
Mr. Colm Hayes:
Price is well outside our control. It is a function of the market. Competition is good and healthy, however. We encourage competition on the organic side of the processing sector by direct grant aid investment under the organic processing investment scheme that I outlined a minute ago. Delivery of more processing outlets for organic produce must be a key part of the delivery of our overall organic goals. As Professor Gerry Boyle and others outlined earlier, the goals for the organic sector will not be realised unless every link in the chain inputs to it, from the primary producer through to the processor. There has to be education, training and advice but there also has to be marketing and market return for the farmer. In any consideration, as happened with the organic strategy previously, unless there is a healthy market outlet for products, it is clear that we will not achieve our marketing goals. It is a good thing that it is there. We are responding by investing heavily. The Minister has significantly increased the budget for organic processing investment this year. Anything in that space is good. Farmers need to see that market outlet. As previous witnesses said, it is possibly a deterrent to engaging in organic farming.
Our scheme is important to kick-start this and to provide investment and grant aid to farmers to convert and to maintain their organic status. Sensible farmers are looking beyond that to the market returns. Everybody has a part to play. Unless each part of that jigsaw is in place, it is clear that we will not achieve those goals.
I will keep my questions brief. I have been talking about organic farming last week and this week and the difficulties that I know many organic farmers experience. They are finding it difficult to survive. It sounds like the Minister has many ambitious plans. I sincerely hope that these will be followed through because they are needed on the ground. People with a farm of up to 70 acres are paying up to €600 for registration and maybe €500 for a planner, while getting a grant of €2,000. Such a farmer cannot sell his or her cattle in rural areas because there is no market for them. Unfortunately, there is a vacuum and the marts should be encouraged to have a market for organic cattle.
The organic farming scheme in 2018 had 225 applications. Some 110 farmers never got in and 63 stayed with organic farming. Have they received the conversion payments? Will they get the payment with the new scheme? Why was the new organic farming scheme not full?
I hear much about new eco-schemes. Why can we not develop the one great scheme that we have, which is the organic scheme? We talk about bringing in another and another. At the end of the day, the organic scheme has to be the most eco-friendly scheme. We should develop that scheme. Why are we not doing that?
Mr. Colm Hayes:
There were budget constraints that did not allow us to take in every applicant in 2019. The scheme was oversubscribed. We have followed through for those who continued with their organic conversion and have given them priority entry. We made it clear at the time of the reopening of the scheme this year that if it was oversubscribed, those farmers who applied in 2019 and continued with their organic conversion would be given priority entry. There is no question but that they will be first in the queue when there is a decision on entrants.
On the eco-scheme points, I agree with Deputy Michael Collins that the organic scheme is excellent. We intend to have an enhanced organic scheme in the next CAP similar to the model that we have now. We are not throwing the baby out with the bathwater. It is a good scheme and it works. It may need a few tweaks in design, which we will make for the next time around. The Minister of State has made clear, as part of her ambition for the sector, that she sees an enhanced scheme under the next CAP being a key part of this.
There is a lot of intensive work ongoing on that.
The point around the eco-scheme and GLAS is that they can also be drivers for organics. For example, in respect of GLAS, the last time around organic farmers were entitled to priority access. In terms of the design of the eco-scheme this time around and the points model, one of the aspects under consideration is that points could be given automatically to farmers who are already organic. The kinds of indirect supports we are talking about would complement the organic farming scheme that is already in place. As we discussed in respect of the market supports, when farmers are looking around when considering whether to apply, they see these kinds of things rather than just the benefits they are getting directly from the organic farming scheme through the conversion and maintenance payments. They are also seeing that it affords them the opportunity to avail of priority entry to the next GLAS and the eco-scheme. It is all part of a suite of offerings for organic farmers that we believe could really significantly drive output.
In respect of this year, we do not yet know what land coverage the 317 farmers who applied brought with them. It is possible that they have brought more land. When the scheme reopened in 2019, the farmers who joined then brought an average of 48 ha, which was above the average of 38 ha of those already in the scheme. We are hoping for something similar this time around in terms of getting closer to the land coverage targets.
When a scheme is reopened, it is hard to gauge the level of interest. We did a huge amount in terms of engaging the advisory services. We directly funded the Agricultural Consultants Association, ACA, and the private advisory services. They organised a number of workshops for their members. We worked very closely with the organic certification bodies. We did a lot of publicity ourselves. Farmers are looking around. The reopening of the scheme coincided with the opening of the REAP scheme earlier this year. Anecdotally, we heard of competition in farmers' minds between whether they would join the organic farming scheme or the REAP scheme. We have not yet done a full analysis of those who have not applied. We are working through feedback from organic certification bodies and advisory services.
A sustained campaign and another reopening are required. The Minister of State has indicated very strongly that this is very much her intention if the funding is available. There is the potential to take in another cohort of farmers next year, perhaps without the competition of other transitional schemes. That is an issue for discussion and a policy matter for the next budget.
We are building towards the next CAP all the time. It its important that farmers have a clear understanding. There were some mixed signals in the media and elsewhere around whether it is the right time to join the organic scheme. It is very clear that now is absolutely the right time. All being well, the 317 people who applied will be accepted. We will know how much land they are bringing with them when we do the full review of the basic payment schemes. A further reopening of the scheme next year, an enhanced organic scheme in whatever form that takes arising from the next CAP and a dedicated stand-alone CAP scheme will all be major factors.
I have a few quick questions. It was announced that approximately 500 farmers were joining the new scheme but only 317 joined. Is that not proof that there is something seriously wrong when 10,000 farmers seek to join the REAP scheme and we cannot even get 500 to join the new scheme? Does Mr. Hayes believe the Department has basically not placed enough emphasis on organic farming over the years? There are around 130,000 farmers in the country. Off the top of my head, roughly 1,800 farmers, or around 1.5%, are organic. With all the talk about climate and all the craic that is going on at the moment, should we not be looking at having the guts of 10% organic?
Was the scheme biased in favour of dairy or tillage farmers? Was it not that case that small beef farmers were not really going to get into the scheme? The fees that have to be paid are putting off small farmers. Why is there not a system like the Bord Bia system for quality assurance? Why does it not all come under one umbrella so that someone can come out and do the job without basically charging a lot of money? I cannot understand why we have about five different bodies looking after different things. Farmers are sick of that.
Is the straw chopping pilot not defeating the purpose? Most organic farmers are required to have a 50-50 split. We are going to take 1 million bales and chop them out of the system. Between the different sectors, there will be a clamour for straw. The Department came up with the idea that it would pay farmers to chop the straw rather than encouraging more bedding of cattle, which it would be doing for environmental reasons if it were worried about the environment. Looking at the numbers, does Mr. Hayes not think the number of farmers who have joined the scheme this year is disappointing and represents a failure by the Department in organic farming for a number of years? Why has there not been more of an emphasis placed on securing markets in other countries over the years?
Mr. Colm Hayes:
The low level of organic take-up in Ireland is really a legacy issue, especially relative to other member states. As one of the representatives from Teagasc said earlier, it took ten years to get from 1% to 2% land cover. We are dealing in an entirely different space now. We have a programme for Government commitment and a very ambitious Minister of State who is pushing us hard on this to achieve an increase from 2% to 7.5% in the lifetime of this Government. We are looking forward. We are looking at the drivers that will help us to achieve those goals.
It is clear that the scheme will play a very large part in this, hence the immediate response to the programme for Government commitment with the reopening of the scheme for this year. The intention, subject to funding, is to do something similar for next year. However, they are only some of the levers that can be pulled to achieve the level of land coverage that we want to see.
In respect of organics versus REAP, I can only work off anecdotal evidence. Organic conversion is possibly a slightly larger step for farmers to take when they are sitting with their advisers. It is very important, and I outlined it as one of our key priorities for this year, that we have advisory services in this country that are sufficiently knowledgeable. I believe that they are. However, we must ensure that every adviser is up to the same standard of knowledge on what organic farming means, and what it can mean for a farmer both in terms of the environmental performance and the market performance of the farm. We are putting a huge amount of effort into that, both with Teagasc, the ACA and the private advisers, to make sure that it is understood.
The EU average target of 7.5% in the programme for Government represents an enormous challenge, but absolutely everybody in the Department is fully committed to it. There is a lot of work being done and more will need to be done to achieve that target.
The dairy and tillage piece was very clearly communicated at the start of the scheme by the Minister of State when she said the scheme was being reopened for every farmer who wanted to apply. In the event that it was oversubscribed, it was intended that there would be a ranking and selection that might favour dairy and tillage farmers. As it turned out, the scheme was not oversubscribed. All things being equal, we will accept every farmer. It was very clearly communicated to farmers that if they wanted to apply, regardless of what type of enterprise they had, there would be a place for them within the scheme, depending on subscription numbers. They were strongly encouraged to apply.
The Deputy's question on markets in other countries is one for Bord Bia. I know that its representatives addressed the issue in some detail earlier. I do not want to cut across any answers that may have been given in that respect. I fundamentally agree with the Deputy's point. None of this will be achieved unless the markets are available for the output. That output is not just domestic but international. The figures in our organic strategy plan show that the global market for organics could be north of €220 billion by 2022. There is enormous potential out there. However, potential and realisation can often be two very different matters.
I will not comment on the policy behind the straw chopping scheme. It is a different scheme that is completely outside my area. I do not believe it has had the effects on organics that have been suggested. It is a policy discussion and a question for a Minister. I hope that answers the Deputy's questions.
If so many bales of straw are chopped, the price of straw will increase.
Especially in a year in which we get a weather event, it will make it very difficult for organic farmers who have to have 50% straw bedding.
I will take two members together so we can try to get through all the questions. I call Senators Paul Daly and Boyhan.
I welcome the officials from the Department and thank them for their contribution and their submission. I will be brief because, as the Chairman said, we are running low on time. I would like some comment from the Department on the number of people who might leave organics, having gone through the conversion system and got onto the scheme. I seek the figures from the Department. I have had engagements with people in the sector who when talking to me have referred to this as being somewhat of a revolving door. They say we will never reach the targets we have set or the percentages of area covered unless we can hold on to the people already on the scheme. I cannot find mention of any numbers but, as I said, people within the system have told me it is a bit of a revolving door and that they cannot hold on to what they have. In that context, they ask how we will get new people on board. That was evident, as previous speakers have highlighted, in the number of applicants the Department had. I would the Department to comment on that also. When the Department sees five times the available number of places applying for the REAP scheme, as has been said, yet the organic scheme gets only the number of applicants for which the Department has positions, a mere 500, how will we sell this? We are all on the one side here. I am not being critical. I am asking questions. They might be constructively critical. How will we get up to 7.5%? Just doing the same thing and reopening the same scheme annually does not seem to be working. What else can we do to incentivise the farming community to buy into the organic system? Even the target of 7.5% is too low. We need to aim for the higher numbers in Europe, not the average.
I will leave it at that, Chairman, because I know we have time constraints but I would like to hear some feedback as to how many people drop out and, if the number is reasonably high, why that is so.
In a point related to Senator Paul Daly's question, one of the witnesses noted that we have gone from 1% to 2% land cover in ten years in respect of organics. This is not surprising, given that less than 1% of the annual departmental budget is spent on organics. I believe it is roughly €15 million or €16 million out of a total of €1.8 billion. Moreover, Bord Bia spends about 2% of its budget on organic food promotion, so this is not really a surprise. I chair the environment and climate action committee and by coincidence, we had an interesting session this morning that touched on organics. We had Macra na Feirme and Dr. Oliver Moore from UCC before us. Dr. Moore stated that the organic action plan we have been following will not cut it and that we need a new one. He said that if we want to get to 7.5% organics, we need to be spending 7.5%. Bord Bia needs to be spending that percentage of its budget and the Department needs to be spending that percentage as well by 2026. Perhaps the witnesses could comment on that. Are we on track for that level of spending? If not, I would suggest we are not on track to meet our targets on organics.
Mr. Colm Hayes:
In response to Senator Daly's question about the number of participants and the dropouts from the scheme, to give an indication, last year the farmers who were in the organic scheme under the rural development programme, RDP, were all coming to the end of their contracts but because there was not a new CAP, we extended their contracts by a year. We made an offer to 1,467 participants to extend their contracts by a year, the same as we did with GLAS and all the other schemes. Of the 1,467, 1,394 accepted the extension and 73 decided not to do so. The members will see, based on those figures, that the number declining is low enough. Anyone who leaves the scheme is disappointing to us because we have invested in their conversion and their maintenance but the 73 who decided not to extend did so for their own reasons. Anecdotally, we understand there can be a variety of reasons. It can be because they were leasing land which was being farmed organically and which they were no longer able to lease because the landowner took it back or because they were retiring from farming. We do provide in certain circumstances for the person taking over from that person or if he or she is taking back the land, for example, to extend the contract, but farmers do not extend land leases for their own reasons. You will always get a bit of that. We were quite heartened by the acceptance rate of north of 95%. Had the number of dropouts been higher, we would have been concerned. I am not sure it is the issue, anecdotally, but I accept Senator Daly's point. If there is evidence that people are considering withdrawing for whatever reason, we would like to be aware of that and see whether it is something we could engage on.
The question about the organic action plan and whether it is fit for purpose is an important one. It is important to take stock of any action plan as you go through it and see whether it is still relevant. The current organic action plan is really a subsectoral plan from the overall Food Wise 2025 plan. As we all know, considerable work is ongoing on the development of a new Food Wise 2025 to bring the plan up to 2030, so it is time to take stock of where we are on the organic action plan. As I said, the implementation group assembled all the various stakeholders about two months ago, took stock of where we are on all this and reviewed all the targets to see where we are measured against them. That was a very useful exercise. It was a public exercise in that we published the outcome and we will share it with the committee after this meeting.
I agree with the comment Mr. Padraig Brennan from Bord Bia made, that it is not the time to throw out the existing strategy. It is time to look at it, to see what is working and to see where we need to pick up the pace on some actions which are probably being under-implemented. There is a variety of lead roles within the action plan across all the agencies and private bodies. It is time to see whether everybody is doing their part. Our implementation group does that as it goes along. I would suggest that even if we started in the morning on the development of a new action plan for the sector, it would very likely include a lot of the same actions as are in the current plan, albeit perhaps with different wordings. As the Senator said, we are all on the same page here on the need for everything from support for the primary producer right through to the processor and all the educational and advisory pieces that go into this. They are all in the current strategy. It probably needs to be reviewed for us to see how relevant all the actions are in light of the updated targets, because we have updated targets which were not in the development of the strategy originally. I suggest to the Deputy that it is time to take stock, rather than to start again but it is a discussion to be had for sure.
I have just a couple of brief questions that will save my asking my further questions. We know there were 317 applicants to the new scheme, although 74 left the scheme last year. If all the remaining applicants are successful, what will that mean in percentage terms for an increase in organic land?
Mr. Colm Hayes:
We do not yet know that figure because it is based on those applicants' basic payment scheme applications, which closed on 15 May, but they had a month or a six-week period, I think, to adjust their plans. We will get that information, I suspect, in July or maybe August but we do not have it yet.
Maybe the Dáil record should be corrected then. In response to a parliamentary question on 28 April, the Minister indicated €5 million was allocated to this.
Senator Daly said he did not want to be critical, but I do. If organic farming is done right, it can deliver for farmers, consumers and the environment. It is not good enough simply to say these are legacy issues. The Department has shown in the past that when it puts its mind to it, it can deliver quite an expansion. The dairy sector is an example. We will all recall, when we were approaching the period when quotas were being abolished and in the immediate period afterwards, the series of farmer engagements, publicity, ploughing matches and the overall push. One would swear we were talking about white gold. In Leinster and Munster, there was effectively a doubling of cow numbers, while over the same period there was an increase in the level of organic farming from 1% to 2%. If the intention is there and there is ambition in the Department, we can deliver a result well beyond the 7.5%. Our guests might confirm, as has been referenced a number times, that our target amounts to the EU average of 7.5%. Do they accept that that EU average was a 2018 figure, whereas the 2019 figure was 8.5% and the EU average is probably higher again for 2020 and 2021?
Why are cattle prices for organic farmers not published weekly, as those for conventional cattle are? Are there any proposals to reduce the volume of paperwork and bureaucracy that organic farmers have to endure, even to dehorn a calf, in their annual return forms? Is there a proposal that might undo some of that bureaucratic entanglement in which many farmers find themselves?
When representatives of the Irish Natura and Hill Farmers Association, INHFA, appeared before the committee last week, we mentioned that there was a particular challenge with regard to the minimum stocking rates of 0.5 livestock units to participate, which contravenes some of the requirements relating to areas of natural constraint, ANC, among other requirements. What proposals does the Department have to undo those rates and allow farmers who may be already organic to participate in the scheme?
Finally, what proposals does it have to allow commonage to be included in the organic scheme? Again, I refer to land that is organic in most instances, in any event.
Mr. Colm Hayes:
On the overall point, it is clear we are outlining a high level of ambition today, as the Minister and the programme for Government have done previously. We are, essentially, on the same page as the Deputy in regard to the achievement of this. It is clear, as the earlier group of witnesses said, that it will require putting our shoulders to the wheel, and a level of investment, to an extent that has not been seen when it comes to organic farming, and the advisory services, the farm bodies, the processing sectors, Bord Bia and Teagasc will have a key role to play. I have no doubt of the commitment of all those organisations to achieving this, having watched the proceedings of the committee in recent days and having heard from all of them. This is one area where everybody is in agreement that an enhanced level of ambition is needed, and we are here to highlight the role of the Department and the Minister in that regard and our belief and strong level of ambition. There will be no shortage of effort and it will require everybody to put their shoulders to the wheel.
I do not have an answer to the question on cattle prices for organic farmers but I will research that and respond to the committee directly on that point.
On the minimum stocking rate, I might invite my colleague, Mr. Barron, to comment. There are important reasons it is used but it might help the committee's understanding if we were to outline them.
Mr. Seamus Barron:
I will be happy to but I might first return to the point on cattle prices. This relates to a recommendation in the action plan and we are following up on it such that cattle prices will be reported, so it is a work in progress.
As regards paperwork and bureaucracy, animal welfare requirements are a high priority for organic farming. Specific EU legislation pertains to animal welfare. Any paperwork requirements are not the Department's but rather concern compliance with organic legislation.
As the Deputy noted, the current minimum stocking rate is 0.5 livestock units. It is 32.5 kg of livestock manure nitrogen per hectare, which is the equivalent of one half of a suckler cow per hectare, which is quite an extensive stocking rate. The reasons for having the minimum stocking rate are to maintain a minimum level of activity of grazing management to ensure that sward management and biodiversity are optimised, and to ensure a minimum level of production of organic beef and lamb to meet supply chain requirements and consumer demands.
Commonage is currently not eligible for OFS payments, primarily because under legislation, there cannot be intermixing of organic and non-organic stock. It is very difficult, therefore, to meet the requirement on commonage.
I would almost presume that the vast majority of stock on commonage, especially where it is populated with sheep, would be all organic. That should be rectified because there could not be anything more organic than animals grazing on commonage.
I earlier raised this matter with Bord Bia. The organic sector strategy group was established in 2018 and the target was set for 7.5% of land to be organically farmed. That came from a base level of 1.8%. I asked Bord Bia about the German model, where it was done right from the start, although, as we were told, it commenced there earlier. Will the Department commit to ensuring that people who enter the organic sector will not be pressured into producing quick results to meet a policy target for which there seems to have been little preparation? We need to ensure the organic sector will be seen as an attractive venture, rather than putting pressure on it from the start.
Mr. Colm Hayes:
The Deputy's question is an important one, if I understand it correctly, in regard to support for farmers who want to convert their practices. This goes back to the point about the role the advisory services play, be they public or private, in their engagement with the farmer, and the role the organic certification bodies play as well. It is, essentially, a two-year conversion period for farmers. It is achievable and manageable, with a path well worn by those who have made the conversion, and the organic certification bodies and the advisory bodies know what they are doing in that regard. We need to ensure that farmers going into it are well aware of all aspects of the requirements as they go through the process. That is an important role we can play. We can invest and support the advisory service to enable it to do that.
The organic certification bodies are there as well. There are a number of supports for farmers. I would share the Deputy's overall concern if there were a lack of support for farmers who are considering converting and feel that they are not ready or prepared and are being rushed into it. We need to look into that.
We do a great deal in terms of support. For example, we hold annual farm walks which farmers can attend and visit farmers who have already converted. That peer-to-peer learning is very important. The Minister has also asked us to consider the issue of organic-specific knowledge transfer groups. Again, that type of peer-to-peer learning on organics would be very important. It is an initiative farmers would be able to relate to and understand and they could ask the relevant questions as well. It is about having as much, and the broadest range possible, of supports for any farmer that is opting in. I agree with the Deputy's main point. It is very important.
On behalf of the committee, I thank the officials from the Department of Agriculture, Food and the Marine for engaging with us today on the topic of organic farming. We have had two sessions thus far on this matter. There is a significant amount of work to be done to up the percentage of land we have in organic farming use. As I said in a previous session, it has a significant and important role to play in reducing our emissions from commercial farming.
Deputy Carthy's point regarding commonages is one that needs to be taken on board. For someone to be debarred from an organic scheme because he or she is farming commonage land does not make sense. There are many issues to be addressed. Earlier, the issue of there being only one purchaser for beef cattle into the organic system was raised. That has to be rectified. It baffles me how, in the context of the Competition Authority, that situation was allowed to develop. We had an independent operator in my county, which was bought out by a large player in the industry. I cannot understand how that situation was allowed to develop.
This is a subject to which we will be returning. There is a great deal of work to be done in the area of organic farming. I again thank the officials from the Department and all of our other witnesses for engaging with us today. The next public meeting will take place at 9.30 a.m. on Tuesday, 29 June 2021, when we will hear from the Sea-Fisheries Protection Authority. We discussed the details in that regard during yesterday's private meeting. The view of the committee was that we should deal first with the topic of horse racing but the secretariat informed me that it is necessary to give ten days notice to witnesses. As a result, that topic will be dealt with at our meeting on 6 July. We will have two meetings next Tuesday, the first of which will be with the Sea-Fisheries Protection Authority and which will commence at 9.30 a.m.