Mr. John Keane:

I thank the Cathaoirleach. I am joined by my colleague, our national agricultural affairs chairperson, Dr. Liam Hanrahan. I thank the Cathaoirleach for the invitation to address the committee on the cost of fertiliser. We have a number of points we wish to bring forward for the committee to consider and discuss. First, as outlined by a number of other organisations this evening, I outline the importance of fertiliser to the sustainability of our sector and not just our grassland, but our tillage sectors too. Our climate gives us a distinct advantage in producing crops in an effective and sustainable manner. It also gives us the ability go grow in long seasons and utilise the best potential of the growing conditions we have in Ireland. As a result of the importance fertiliser plays within our sectors, a large proportion of the costs across all livestock and tillage farms, is made within fertiliser costs. As highlighted already, the costs on Irish dairy farmers exceeded €15,000 and the costs on tillage farmers tripled between 2021 and 2022. The profitability effect on many of these farms, be they livestock or tillage farms, was eroded in many circumstances where farmers forward bought expensive produce in on the advice of national bodies and, therefore, bore the brunt on the costs over winter 2022 and into spring 2023.

We believe the committee should investigate further the ability to source fertiliser. In early 2022, there was a cessation of availability of nutrients to farmers on three occasions by our large suppliers in the market. There were fluctuations in price of fertilisers in the course of weeks and days of up €150 to €200 per tonne when markets reopened. At the time of the high prices experienced in 2022, the feedback given in the sector was that replacement cost was the reason fertilisers were prohibitively expensive. However, in 2023 when we saw the reduction of gas prices across the European Union, we did not see the same reduction in the cost of fertiliser as the replacement cost tumbled.

We see great price disparity in fertiliser not just in the North and South of Ireland, but also in England and the EU. We have been informed by the industry that the supply of fertiliser in England and the EU is very different to Ireland but we wonder about this from speaking to colleagues in European Council of Young Farmers, CEJA. and across the EU who work on similar supply patterns to us. The extraordinary price rises from €300 per tonne for CAN and urea-based products in 2021 to a peak of €1,200 and almost €1,300 at various stages during 2022 needs to be investigated, specifically in the context of record profits recorded by these industries. CSO data show an almost 500% increase in profit margins obtained by fertiliser companies on certain products. It is unacceptable that farmers should bear the brunt of the cost of these profit margins, especially when food production costs were so high.

Fertiliser prices so far in 2023 in comparison with 2022 have reduced but have a long way to go to return to 2021 levels. Gas prices are lower than 2021, when products based on urea and CAN were in the region of €250 to €300 per tonne. This requires a major investigation as soon as possible to identify the causes, outside of the cost of natural gas, in terms of supply of fertiliser.

The national fodder and food security committee has a role to play in advising farmers on securing fodder. In the second half of 2022, Macra proposed that a burden-sharing option be looked at in relation to securing fertiliser for our sectors. The national fodder and food security committee chairman has asked for this to be looked at in the coming months and we look forward to the results of this.

On behalf of Macra, I thank the Chairman and committee for their continued support of our organisation. As this will be my last time before the committee in this role, I thank it for its continued support. We look forward to members’ questions.