Mr. Dermot Kelleher:

I thank the committee for the opportunity to speak here. This CAP strategic plan has now been agreed in Brussels and we have a roadmap from 2023 to 2027. From the point of view of the Irish Cattle and Sheep Farmers Association, ICSA, the roadmap is far from perfect. In fact, we could go further and ask if it is fit-for-purpose at all in the context of the rapidly changing environment that farmers are working in. Much has changed since the Ciolo reform and milk quotas were established that allowed some farmers to switch to milk and others to expand. However, it is the massive inflation within global economies that gives rise to the greatest concern about whether this scheme will be fit for purpose. It is clearly seen in the inflation in farm building costs which are not reflected by TAMS standard costings nor by the ceiling. The ceiling has been increased from €80,000 to €90,000 but this is nowhere near the actual inflation in building costs since the beginning of TAMS.

The ICSA made a comprehensive submission on the CAP strategic plan. Our key asks were: a coupled payment for sucklers and sheep, €300 per cow and €35 per ewe; an early finishing payment incentive of €100 per head for beef finishers; and a greatly increased ambition in agri-environment schemes with a target maximum of €15,000. All of the ICSA proposals took into account and were fully costed and fundable under the CAP budget for Ireland, assuming Ireland fulfilled its co-financing obligations and utilised the carbon tax funds as promised in the programme for Government. Unfortunately, our plan was not taken into account in the final package. It was clear that the Department had already made its mind up to allocate a massively increased budget to organic farming. While this may be seen as part of a strategy to meet climate targets, it is questionable whether account has ever been taken of the market potential for increased organic exports. The CAP strategic plan does very little to help the sectors with the greatest need for support. The original MacSharry proposals and the Fischler reform delivered substantial support for active cattle and sheep farmers. This incoming CAP fails miserably by comparison. Instead of support at €300 per cow, the CAP plan delivers just €150 for ten cows and €120 per cow after that. This is less than the combined beef data and genomics programme, BDGP, and the beef environment efficiency pilot scheme, BEEP, of last year.

At the moment, deliberations at the Food Vision beef and sheep group are focused on measures to reduce emissions. One contentious proposal is to pay farmers to quit sucklers. The ICSA is concerned this will have a devastating and disproportionate impact on the suckler sector but also on many regions where sucklers are the only option due to land type and farm scale. Without more support for active suckler farmers, there will be many farmers tempted to pack it in and give it up. The exact same applies to sheep farmers, who have been let down badly by a €12 per ewe scheme. The ICSA is unhappy that the new suckler scheme is doubling down on the obsession with four-star and five-star maternal traits. This needs to be reviewed and a more balanced approach to breeding for real markets must be included.

The Department is also pushing for earlier finishing of cattle at the Beef Vision group. Earlier finishing of cattle is not realistic at current beef prices and with current cattle ration prices. In fact, the economics of winter finishing can be measured by the reality that our members see no point in winter finishing without a guarantee of at least €7 per kilogram next spring. A more viable model is to minimise winter costs and finish at an older age next summer. The CAP plan does nothing to address this conundrum. The ICSA wants to see the €28 million agreed in the budget translate into a scheme worth €70 per suckling cow up to 400,000 cows, in time for 2023. The CAP plan is not enough. Suckler farming needs a pathway to €300 per cow and sheep farming, a pathway to €35 per ewe. A key demand will be that funding will have to be procured to help beef finishers. If they are not viable, neither sucklers or dairy are sustainable. In our view, support must address the impossible task of finishing cattle at a younger age, when the price of cattle ration is €450 per tonne and upwards. We also need to address the issue of breeding cattle suitable for fattening from the dairy herd.

The biggest problem our members face is the stringent requirement for straw bedded lie-back areas, which are simply not in place in most slatted units. The cost of rectifying this, along with high straw costs in western counties will be a major barrier for many. Of course, farmers should also consider organics if they see it as a long-term business proposition. They need guarantees now that there will be continued organic payments without interruption into the longer term. It is also urgent that there is a coherent plan by meat factories to grow premium export markets which will deliver significant bonuses over conventional prices. We see no sign of that at the moment from factories and we are not reassured by the national strategy to grow the organic sector fourfold.

The flagship agri-environmental scheme, ACRES, is up and running but it is difficult to measure how it will work out just yet. First, the ICSA is disappointed at the lack of ambition. The rural environment protection scheme, REPS, paid many farmers more than the maximum of €7,300. That was 20 years ago when the cost structure was totally different than today. The ICSA believes that the deadline of November 21 for the current round is unacceptable. Moreover, we would like to see flexibility around the submission of geotagged photos. There must be recognition that getting so many farms walked by 21 November is an unworkable ask, especially in the short days and bad weather at this time of year. We are also concerned that ACRES is replacing rather than complementing successful schemes such as the Burren programme.

The ICSA also wants to see full transparency around how the carbon tax money is really delivering extra support to farmers and we are calling for additional funds to be made available if demand warrants it, for this scheme.

The ICSA welcomes the announcement of increased funding for forestry. It is a significant improvement to move from premiums covering 15 years to 20 years. However, the goal must be to make broadleaves attractive, and this will require further thinking about the longer term. It’s one thing to offer a 20-year premium for sitka spruce that can be harvested soon after. If we want diverse hardwood forestry that will not yield a commercial return in 50 years, we have to consider how farmers can look at this in a long-term framework. The solution here will surely lie in allowing farmers to benefit from the carbon stored and to find a way of crediting the agriculture sector with this.

The CAP is no longer capable of doing its job because it is not keeping pace with the relentless increase in costs. In parallel to this, farmers are being tasked with more and more objectives alongside food security. Therefore, new funding sources will be essential, particularly in the context of ever increasing demands on climate, biodiversity and nutrition.

The climate action plan alone is expected to require a grand total of €125 billion in investment yet agriculture is only a footnote in the calculations. This is despite the fact that agriculture is blamed for 37% of emissions. That cannot make sense. If the Government is serious, substantial levels of new money will be required. The CAP cannot be raided for every global challenge that farmers are expected to rise to. The 37% of the fault should get 37% of the money at least.