Professor John Sweeney:

The key really with anaerobic digestion is the mix one has between silage and slurry. That is fairly crucial for a successful outcome. Let us be honest about the land because if one is talking about using up 5% of the agricultural area of Ireland for growing grass for anaerobic digestion, one will not have cattle on that land or be using fertiliser on that land.

In a sense, it creates another problem down the road for agriculture. We are very conscious of the fact that the derogation imposes penalties and income losses on farmers. The extent of that income loss is something that perhaps needs to teased out a bit more. I know the committee heard from the farm organisations last week that it could be up to €230 million. That is as a result of assumptions in a multiplier effect. Whether it emerges as that or not, I have been looking at the Irish Farm Accounts Co-operative Society Limited, which has done a very good job on looking at the case study of a farm with 40 ha with 112 cows. It came to the conclusion that farmers, as the Deputy said, have two choices at the end of the day. They either acquire more land or else reduce their herd numbers. The kind of reductions in income which the Irish Farm Accounts Co-operative Society Limited came up with for those two alternative models of farms was a 5% drop in income for the first case of acquiring more land, or a 23% drop if one was to go down the road of reducing cattle numbers.

We recognise that that is quite a severe situation for farmers. There is no doubt about it. It very much goes back to what was said earlier about preparation being important. The reality is that the train has left the station for the directive. It was 1991 when we had the first derogation and the purpose of it was to prepare to comply with the directive. After 30 years, we have not prepared for the day that came at the end of last year. It was ruthless but that is the nature of regulation. It can be ruthless if one is not prepared for it. It is imperative that we prepare for the potential loss of the derogation. We only have four countries in Europe left in derogation status - Denmark, Ireland, Flanders and the Netherlands. Some of those have been told they will be out of derogation at the end of next year. It is important that we look at the possibility of that worst case scenario and recognise the Commission will probably not be generous to us on a further derogation down the road.