Mr. Paul O'Brien:

I thank the Chair and committee members for inviting the Irish Farmers Association, IFA, to address them today. I am joined by Mr. Tadhg Buckley, IFA director of policy, and Ms Geraldine O’Sullivan, IFA environmental senior policy executive. It is important that we acknowledge that farmers will be the most impacted by the outcome of both the nature restoration law and the land use review. Agricultural land accounts for approximately 67% of Ireland’s total land area while forests account for approximately 11% of the total land area, of which 50% is predominantly owned and managed by farmers. Farmers, as custodians of the environment, are the "boots on the ground" to maintain and enhance biodiversity on their farms. They have a great affinity with their local landscapes and ecosystems and are intrinsically linked to these landscapes, sharing knowledge, skills and practices from one generation to the next.

Irish farmland is a significant reservoir of biodiversity with, on average, between 12% and 14% of farms providing space for nature. It is important that farmers’ investment and the positive changes that have been taking place on farms in recent years are fully recognised. Some 33% of the farmland area in Ireland, compared with an EU average of 13%, is under agri-environment schemes. Irish farmers have participated on a voluntary basis in these schemes since 1994, thereby enhancing farmland biodiversity.

In June 2022, the European Commission formally adopted the proposed nature restoration law, a key element of the EU biodiversity strategy. The proposed regulation will require each member state to develop a national restoration plan to clearly identify restoration measures, which together cover at least 20% of the EU’s land and sea area, by 2030 and all ecosystems in need of restoration by 2050. Under the proposal, national restoration plans would need to be submitted within two years of the regulation coming into force. Under the proposed regulation, the EU will impose legally binding targets on Ireland until the year 2050 across a broad range of ecosystems, from forests and agricultural land to rivers and marine habitats, to meet the targets and obligations.

Negotiations are ongoing with the European Parliament and the Council on the proposed regulation, with more than 2,000 amendments being considered. Trilogues between the European Parliament, the Council and the Commission are expected to take place in mid-2023, and the indicative timeframe for the regulation to come into force is 2024. As negotiations proceed, it is vital that the three pillars of sustainability – economic, social and environmental – are equally taken into account. There must be a balancing of interests without giving priority to a single aspect. The impact on food security and food and timber production as well as farmers' standard of living must be fully considered as part of the negotiations.

The regulation for farmland habitats proposes to increase grassland butterflies and farmland birds, the stock of organic carbon in cropland mineral soils and the share of agricultural land with high-diversity landscape features, restoring drained peatlands under agricultural use. Of particular concern to farmers are the proposed targets with regard to restoring drained peatlands under agriculture use. The regulation sets a target to restore to satisfactory levels 30% by 2030, of which 7.5% will be rewetted, 50% by 2040, of which 25% will be rewetted, and increasing to 70% by 2050, of which 35% will be rewetted. The proposed regulation allows for Ireland to include areas of peat extraction sites to achieve these targets, as well as drained peatlands under land uses other than agriculture such as forestry, up to a maximum of 20% of the overall target.

Even taking these options into account, the regulation has the potential to remove significant areas of land from agricultural production. The national inventory report 2022 estimates there are 330,000 ha of drained grassland on organic peat soils. Under the proposals, the potential impact on drained agricultural land would be to restore 100,000 ha of this drained grassland by 2030, increasing to 231,000 ha by 2050. This represents 7% of the usable agriculture area under grassland. The lack of clarity regarding what is meant by "restore" or "satisfactory levels", as well as the potential impact on farmland and production, are a source of serious concern for farmers and rural communities, particularly in the midlands and west, where this soil type is more prevalent.

As regards comprehensive restoration targets for farmland habitats and Article 4, in addition to specific restoration measures for agricultural ecosystems, there are more comprehensive restoration targets encompassing habitats and ecosystems that have been designated as in bad condition under the reasoning of the habitats directive. The habitat types include wetlands, grassland, rivers, lakes, riparian habitats, forests and heath and scrub habitats. Under the proposals, Ireland would be legally required to put in place restoration measures to improve areas of habitat types that are not in good condition to good condition by 30% by 2030, 60% by 2040 and at least 90% by 2050.

The main concerns relate to a full impact assessment. The proposed regulations will have far-reaching consequences for Irish agriculture. A full impact assessment must be undertaken to quantify the area of farmland that will be affected. This is vital to ensure the proposed targets are realistic and fair and not detrimental to the continuation of farming in Ireland. It will provide an estimation of the economic impact and social burden of the restoration measures, as well as the cost of compliance.

New funding outside of CAP is needed. A lack of financing has been identified as a key failure in the EU meeting its 2020 biodiversity targets. The proposals lack clear and long-term financial support for nature restoration, with the majority of this expected to come from CAP funding. Restoration can only be achieved if it is not dependent on CAP budgets but, rather, is funded through a dedicated financial mechanism for biodiversity and restoration. Long-term restoration requires long-term resources, not short-term measures.

Farmer agreement is a non-negotiable prerequisite. The proposed measures relating to the nature restoration law will, in many cases, place substantial constraints on farming practices. This, in turn, will lead to a significant increase in management costs or a reduction in land productivity, or both. Therefore, it is vital that any measures undertaken are of a voluntary nature, with full prior agreement of farmers. These farmers must be fully compensated on the basis of full income forgone as a result of these measures. It is essential that an independent arbitration scheme is developed as part of the national restoration plan to determine the loss of value to the farm business caused by the measures, with an associated budget allocation.

Property rights must be respected. It is imperative that the property rights of farmers affected by the targets are not adversely affected. The designation of land has the potential to significantly impair the asset value of farmland. Therefore, it is essential that farmers are fully engaged from the outset and all measures are voluntary and only implemented in full agreement with the farmer.

Under the land use review, there is increasing demand on land from a range of economic and environmental objectives. The scale of land use change required to meet these demands is significant. Climate Action Plan 2023 sets out the following targets to achieve emissions reductions for the LULUCF sector.

They include increasing annual afforestation rates to 8,000 ha per annum from 2023 onwards, delivering an additional 28,000 ha of afforestation across the first carbon budget period; improving carbon sequestration of 450,000 ha of grasslands on mineral soils, reducing the management intensity of grasslands on 80,000 ha of drained organic soils by 2030 and rehabilitating 77,600 ha of peatlands. The sectoral emissions ceiling for the LULUCF sector has yet to be decided and was deferred to allow for the completion of the land use review.

Phase one of the land use review was published recently and provides the evidence base to determine the environmental, ecological and economic characteristics of land types in Ireland. The review highlights a lack of evidence on current land use and the impact of land use types on the environment and society. Key recommendations include the need to develop a soil monitoring network and the mapping capability for land use, soils and ecosystems, to fill these data gaps. Access to accurate data is required for farmers to make informed land use decisions.

On minimising disruption to the land market, land use change has the potential to have a significant socioeconomic impact on farmers and wider rural communities. The economic and social impact of land use change has not been fully addressed in this phase of the review and must be considered in the next phase.

The impact of changes in policies on the demand for land and the unintended consequences of these objectives is clearly visible from the changes introduced under the nitrates action programme, including nitrogen banding on dairy farms. This led to increased demand for land to ensure compliance, which led to a significant increase in land rental prices. This has had a disproportionate impact on the more financially vulnerable sectors, such as tillage, as they that cannot compete and justify paying the higher rental prices. This is contrary to the Government's policy under the climate action plan, which proposes to increase the area under tillage. It is important that as part of any land use review process, land use change targets do not add pressure and further disrupt the land market.

Phase two of the land use review, the next phase, must involve direct engagement with farmers to understand the decision-making processes of farmers on land use change and the influence of incentives and structural policies. The property rights of farmers must be respected and embedded within Ireland’s land use policy. Any agricultural land use change must be voluntary and fully respect a farmer’s right to make decisions on the current and future use of their land.

The IFA proposes that the next phase of the land review must examine the long-term socioeconomic impact of land use change on the agriculture sector and on rural communities, as well as the economic impacts of changes in land classification, specifically regarding the impact on income-earning potential and impairment of asset values. The review should also examine methods of calculating these impacts and potential funding streams to address the income loss or asset depreciation; the extent of land use change required to meet the existing targets and the impact on the Irish land market; the decision-making process of farmers on land use change and the influence of incentives and structural policies; the acceptance among landowners of different scenarios of land use; and the current restrictions and environmental constraints on forestry planting and the barriers to farmers planting. I thank the Chair.