Oireachtas Joint and Select Committees
Wednesday, 29 April 2026
Joint Oireachtas Committee on Agriculture and Food
Fertiliser Input Costs in the Agricultural Sector: Discussion
2:00 am
Aindrias Moynihan (Cork North-West, Fianna Fail)
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Apologies have been received from Senator Boyhan.
Before I begin, I wish to bring the following note to the attention of the witnesses. Witnesses giving evidence from within the parliamentary precincts are protected by absolute privilege in respect of the evidence they give to a committee. This means that a witness has a full defence in any defamation action for anything said at a committee meeting. However, witnesses are expected not to abuse this privilege and may be directed to cease giving evidence on an issue at the Chair's direction. Witnesses should follow the direction of the Chair in this regard and are reminded of the long-standing parliamentary practice to the effect that, as is reasonable, no adverse commentary should be made against an identifiable third person or entity.
Witnesses who are giving evidence from a location outside the parliamentary precincts are asked to note that they may not benefit from the same level of immunity from legal proceedings as those giving evidence from within the parliamentary precincts and may consider it appropriate to take legal advice on the matter. Privilege against defamation does not apply to the publication by witnesses outside the proceedings held by the committee of any matters arising from the proceedings. All of the witnesses are present in the room today.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against either a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. Parliamentary privilege is considered to apply to the utterances of members participating online in this committee meeting when their participation is from within the parliamentary precincts. Members may not participate online in public meetings from outside the parliamentary precincts. Any attempt to do so will result in the member having their online access removed. One member, Deputy Fitzmaurice, is online at the moment.
The agenda for today’s meeting is to discuss fertiliser input costs in the agricultural sector. The committee will hear from witnesses from the Irish Co-operative Organisation Society, ICOS, and the Association of Farm and Forestry Contractors in Ireland. From ICOS, cuirim fáilte roimh Mr. Edward Carr, president; T.J. Flanagan, CEO; and Mr. Eamonn Farrell, dairy policy executive. From the Association of Farm and Forestry Contractors in Ireland, fáiltím roimh Mr. Norman Egar, chairman; Ms Ann Gleeson Hanrahan, managing director; and Mr. Martin Fleming, treasurer. I am conscious that it is probably one of the sunniest days we have had in a while and there is a lot of work to be done on the field. I thank everyone for being here.
Farmers have been anxious about the price of fertiliser. They have seen it increase during previous energy crises and then perhaps moderate a bit. We are aware that large quantities of fertiliser were brought into the country late last year in advance of the carbon border adjustment mechanism, CBAM, and definitely well ahead of any conflict in western Asia. Farmers are looking at how all of this fertiliser was in the country before any conflict began and feel that the conflict is being used as an excuse for the price increase. The committee wishes to try to get a handle on the witnesses’ take on this and where they might see possible approaches, solutions or improvements.
The witnesses’ opening statements have been circulated and members have had a chance to read them. I will first ask ICOS to go through its opening statement. It will have five minutes. The Association of Farm and Forestry Contractors will go through its opening statement after, and then we will move to questions and answers.
Mr. Edward Carr:
I thank the committee for the opportunity to address it on the cost of fertiliser and the impact it is having on the whole agricultural sector. It is more than 50 days and counting since the start of the Iran war and the closure of the Strait of Hormuz. The crisis in the Middle East threatens the global economy and energy security. Equally, it threatens global food security. This is because the Middle East region is a key player in the global fertiliser trade, accounting for almost 30% of exports of all major fertilisers. Over one third of urea, one fifth of ammonia and ammoniated phosphate, and half of the sulphur produced globally are exported through the strait.
The implications for fertiliser cost and availability are even more pronounced due to higher energy prices, with consequences for all major producers of fertilisers, including those in Europe. Furthermore, in recent weeks, we have seen some countries respond to tightening supply conditions. China, Russia and Türkiye have introduced or expanded export restrictions to safeguard domestic availability. Meanwhile, India has launched several major tenders to secure its fertiliser supply. Consequently, in Ireland, we have seen significant pressure on fertiliser cost in recent weeks, with average urea costs increasing by 43% and other fertilisers, such as calcium ammonium nitrate, CAN, increasing by 24%.
Excessive input cost inflation experienced since 2022 remains a significant challenge for the agrifood sector. Against the backdrop of downward pressure on output prices, further increases in farm level costs are deeply concerning and unsustainable. High output prices in 2022, particularly in the dairy and tillage sectors, cushioned the impact of excessive cost inflation. In contrast, today, there is simply no capacity to absorb any more cost shocks.
Over 90% of Irish dairy and meat output is exported, underscoring how deeply Irish farming is linked to international markets. Ireland’s grass-based production system provides a clear and direct competitive advantage in global agrifood markets. This system reduces dependence on imported feed, lowers input costs and allows Irish producers to maintain strong margin competitiveness, particularly in export markets. Teagasc research has demonstrated that for every 1 kg reduction in chemical nitrogen per hectare, farm profitability reduces by more than €4 per hectare due to the requirement to replace the forage we do not grow with purchased feeds. That is why maintaining access to fertiliser at competitive prices is so important.
Relatively speaking, Ireland is a small market in respect of overall fertiliser sales and usage. In 2025, we imported 1.7 million tonnes of fertiliser. We have no domestic production of fertiliser, apart from the lime we spread on land. Therefore, we are dependent on global demand and supply. In this context, the International Fertilizer Association has warned that “If disruptions to energy and fertilizer trade routes persist, the impacts will be felt most strongly in countries that depend on imported fertilizers."
One silver lining arising from the introduction of the carbon border adjustment mechanism, CBAM, which we strongly opposed over the past 12 months, is that significant advance buying of fertiliser occurred in the fourth quarter of 2025 in preparation for the introduction of that tax. The challenging spring weather conditions have also meant that overall usage is lower in comparison with previous years. This has helped maintain availability, although costs have increased.
Every conceivable effort will be made to secure sufficient supplies for this year. The co-ops are actively working on securing supplies to meet the needs of their farmer members for the remainder of the year. We estimate that 75% of fertiliser requirements for this season are already in the country, and product is still arriving. The outlook for next year remains very uncertain. Every day the Strait of Hormuz remains closed is a major worry. We believe the impact of the crisis will hit even harder in 2027 unless preparations are made by the Government to reduce the risks facing the fertiliser industry, the co-ops and farmers.
The massive uncertainty and elevated costs bring significant risks. The EU and national authorities need to support and help mitigate these risk; otherwise the crisis will deepen further from a cost and supply perspective. One immediate action that would help alleviate the situation is the suspension of CBAM. The latter is having a huge impact on cost and availability. For example, the cost of CBAM on non-EU calcium ammonium nitrate, CAN, is approximately €115 per tonne, which is prohibitive. ICOS has consistently warned against the introduction of CBAM in respect of fertiliser. What is not fully understood is that the cost of the CBAM tax will increase incrementally every year. There is little awareness of the true cost of CBAM regarding food production and food security.
An analysis by Copa-Cogeca, the European farmer and co-operative body, estimates that CBAM will cost over €800 million in 2026 alone, with the total cost rising to €12 billion within the next seven years. As the cost of fertiliser produced in Europe has risen to match the CBAM levy, Copa-Cogeca believes the true cost of CBAM could exceed €39 billion by 2034, which is equivalent to 10% of the current CAP budget. At the beginning of this year, EU agriculture ministers discussed the situation with the European Commission and agreed to reduce the most favoured nation duties on imported fertilisers into Europe in an effort to offset the cost of CBAM. However, it is widely accepted that this measure will have little or no impact. The European Commission also amended the CBAM regulation to allow the temporary suspension of CBAM. This process is now before the European Parliament and Council of Ministers.
ICOS calls on all Irish MEPs to support the introduction of Article 27a of the CBAM regulation and to work to ensure the procedure is expedited and enacted at EU level as quickly as possible. In addition, ICOS calls on the Government to actively engage with all stakeholders in the fertiliser supply chain ahead of the coming season and the back end of this season.
There is an enormous financial challenge associated with ensuring that enough fertiliser will be secured for the 2027 season. In order to lock in supplies, co-ops and others in the supply chain will have to take a position and risk financial exposure against what looks likely to be a very high price. There is a role for the Minister and his Department to help de-risk this investment and share this exposure in the national interest and in the interests of our food producers.
We need to take advantage of the opportunity provided by the EU in terms of temporary state aid rules that will support measures designed to alleviate the excessive cost of fertiliser. The EU is bringing forward a new fertiliser action plan. It will be published shortly. This must include both short-and long-term solutions for farmers and the agrifood sector.
We wish to make a broader point on the extremely high cost of doing business and particularly those costs linked to the current crisis, whether that be energy and fuel. Notwithstanding our appreciation for the significant package that has been introduced already, which we really appreciate, the reality is that the package has limited impact on the cost base for our co-op members. For instance, there are co-ops that operate their own transport fleets for milk collection and agri-deliveries, which initially were not able to avail of the enhanced supports. A recent announcement clarified that further. Hopefully, they will be able to avail of some of those supports.
Right across the chain from AI to milk recording and all farm services, our various co-ops are incurring enormous cost increases, and with current milk prices at approximately 37 c per litre, the system cannot absorb these extra costs. Our real concern, notwithstanding the fact that this year we have suffered high-end costs, relates to the availability of fertiliser and the price at which it will be available in the coming year. I thank the committee members for their time and attention.
Mr. Norman Egar:
I welcome the opportunity to appear before the committee to address what is a critical but often under-appreciated issue within Irish agriculture, namely the impact of fertiliser input costs and associated regulation on agricultural contractors.
It is important to recognise the central role that agricultural contractors play in the day-to-day functioning of our farming sector. These are the operators who ensure that essential tasks such as fertiliser application are carried out efficiently, professionally and at scale across the country. In many respects, they are the operational backbone of modern agriculture. However, despite this central role, contractors have not been afforded the level of recognition or inclusion in policy development that their contribution warrants. This is particularly evident in the ongoing roll-out of and discussion surrounding the national fertiliser database.
The current legislative framework, including the definition of "professional fertiliser end user," clearly encompasses agricultural contractors. This definition includes operators, technicians, employers and self-employed individuals who apply fertiliser as part of their professional activities. By any reasonable interpretation, agricultural contractors fall fully within this category. In practice, however, they have been largely absent from key planning, consultation and implementation discussions. This disconnect between legislative definition and policy inclusion represents a significant gap that has practical consequences for the effectiveness of the system being developed.
To put the scale of the issue in context, agricultural contractors in Ireland operate in excess of 1,400 fertiliser spreaders and are responsible for applying over 1.1 million tonnes of fertiliser annually. This equates to approximately 80% of all fertiliser used on Irish farms. In other words, the vast majority of fertiliser application in this country is carried out not directly by individual farmers, but by contractors working across multiple holdings, often under tight seasonal timeframes and logistical constraints. Given this reality, it is difficult to see how any system designed to accurately track fertiliser use, improve nutrient management and enhance environmental outcomes can succeed without fully integrating the very operators responsible for the bulk of application.
There are also wider external pressures that must be acknowledged. Ongoing geopolitical instability, including conflict in the Middle East, has contributed to volatility in global energy and input markets. This has had a direct and immediate impact on fertiliser-related costs, including the cost of transport, machinery operation and application. For contractors who typically operate on tight margins and high turnover volumes, these rising input costs are not theoretical. They translate into real and immediate financial pressure. The cost of spreading each tonne of fertiliser has increased significantly, and this has implications not only for contractors themselves, but for the farmers who rely on their services.
It is also important to recognise that the discussion around fertiliser use is no longer solely an economic one - it is equally an environmental one. Contractors, due to the scale at which they operate, are uniquely positioned to influence outcomes in terms of nutrient efficiency, emissions reduction and environmental protection. However, achieving these outcomes depends heavily on access to modern, precision-based technologies such as GPS-guided spreading systems, section control, weigh cells and field mapping tools. These technologies significantly improve accuracy, reduce overlap, minimise waste and protect sensitive areas such as watercourses and buffer zones.
The challenge is that these systems require substantial capital investment. At a time when input costs are rising, the ability of contractors to invest in such technologies is increasingly constrained. Without targeted support, there is a real risk that adoption will be delayed, to the detriment of both efficiency and environmental performance. Therefore, when we speak about fertiliser policy, be it in terms of regulation, cost or data collection, we must also speak about the capacity of contractors to respond to those requirements. Policy ambition must be matched by practical support on the ground. In that context, the exclusion, or limited inclusion, of contractors from key systems such as the national fertiliser database is not simply an oversight. It is a structural weakness that risks undermining the very objectives the policy seeks to achieve.
Today, I hope to have outlined not only the scale of contractors' contribution but also the financial realities they face, the operational challenges involved and the practical steps that can be taken to ensure that they are fully recognised, properly supported and effectively integrated into the system. Ultimately, if we are serious about improving fertiliser efficiency, enhancing environmental protection and ensuring accurate and reliable data, then agricultural contractors must be placed at the centre of that effort.
I look forward to engaging with the committee.
Aindrias Moynihan (Cork North-West, Fianna Fail)
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I thank Mr. Egar. I have seven members offering. We will do seven minutes per member.
Before that, I have one or two very brief questions. We know there were huge amounts of fertiliser in the country before the end of last year. Are the witnesses saying that CBAM alone is responsible for that January-February price increase? We saw another increase in February when the conflict began but there had already been an increase. Farmers feel that they have been taken advantage of. Given that there was such a cushion of supply in the country before, they are questioning why they would have seen such an increase. Since some 70% of the year’s supply was already in the country, surely that should have cushioned them some bit from the influence of the conflict?
Mr. Edward Carr:
I agree. A lot of fertiliser that was brought in was purchased at the back end of last year by farmers but there were deals done for all of that fertiliser before 31 December. Fertiliser did come in and maybe the January-February fertiliser came in at a lower cost, but at that stage, the co-ops had to derisk the price of that because the CBAM was coming. The CBAM applied to that fertiliser at that stage. That was that increase.
The next increase came because of the inflation in the price of fuel, delivery costs and all of that. The co-ops have not made money out of this. The co-ops have struggled to even maintain a supply of fertiliser to their members. I am chairperson of our local co-op. It has been an absolutely horrendous year just to get fertiliser onto farms. There was a stage during March and April - we were lucky that we had such a late spring – where the co-ops did not have a supply of fertiliser for the farmers. It was a very uncertain period and I can guarantee there was no cushion for the co-ops in this. The co-ops have made no money out of this this year. Now there is CBAM and the higher costs of fuel for transport and so on. It has been a very difficult year for co-ops as far as fertiliser is concerned. While 75% of it is in the country for this year, that is fine and not our major concern. We have swallowed up that and taken our beating for it for this year. However, it is next year we are really concerned about. There is talk out there now that farmers will have to forward-buy the fertiliser at a very high price. How can farmers risk that in a very difficult year? Two years ago, it was completely different. Fertiliser went very dear but the price of milk at that time was over 50 cent per litre. Today, it is well under 40 cent and does not look as though it is going anywhere. We will be lucky if it stabilises in the mid-30s. You have to take all of that into consideration. It is a very difficult year. How will farmers, at the back end of this year, nail their colours to the mast and buy fertiliser at a certain price? They will not be able to afford to do it but then how will they risk it? It is time for the Department and, maybe at a higher level, the EU to look at this. We know the consequences. If there is not fertiliser here, it will have a major impact on our production. Earlier, I mentioned growing the crops. We will have a whirlwind, really.
Aindrias Moynihan (Cork North-West, Fianna Fail)
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Have the witnesses had any conversations about, say, the EU bulk buying supplies? A supplier will not be magicked up overnight but are there efforts to start generating supply from other angles or to get the EU bulk buying or taking some other approach on the matter? Has there been any negotiation across Europe or with co-ops in other areas?
Aindrias Moynihan (Cork North-West, Fianna Fail)
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Has it been discussed? Have the co-ops engaged at Government level on it?
Aindrias Moynihan (Cork North-West, Fianna Fail)
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My time is limited and I want to move on to the contractors. They are saying that they felt excluded from some of the decisions that would have been made on matters like the national fertiliser database. What kinds of gap do they see as a result? What kinds of change would they have proposed?
Aindrias Moynihan (Cork North-West, Fianna Fail)
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Right, but what kinds of gap does Ms Gleeson Hanrahan see in the system as a result of that and what kind of thing would she have looked for to do differently?
Ms Ann Gleeson Hanrahan:
The gap I see in the system is the accuracy of information on where the fertiliser was actually spread and the quantities. There is no accountability regarding what was spread where and how it was spread. We were the ones who were spreading it and no one obtained information from us.
Aindrias Moynihan (Cork North-West, Fianna Fail)
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Okay. I will move on to Deputy Lawless.
Paul Lawless (Mayo, Aontú)
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I thank the witnesses for coming in this afternoon. We have seen how wrong the Government was on carbon tax, incrementally increasing it year on year irrespective of what the costs would be. It seems that the CBAM will effectively do the same without any knowledge of the future input costs or the costs of produce at the farm gate. It is a senseless policy. It is totally wrong. CBAM will cost €800 million in 2026 alone, rising to €12 billion over seven years. CBAM could exceed €39 billion by 2034, equivalent to 10% of the current CAP.
That is an incredible cost that is going to be paid for by farmers. It is going to drive inflation. It is going to push the cost of inputs and farm produce beyond the reach of so many farmers and consumers. What is being proposed here is totally wrong. Does Mr. Carr have any sense of what it is going to cost the Irish farmers over a three- to five-year period, not individually, but as a collective? What does Mr. Carr expect it to cost on current trajectory rates of fertiliser?
Mr. Edward Carr:
On production costs, it is going to add between 3 cent and 4 cent to the cost of producing a litre of milk. That is all very fine when farmers were getting 50 cent plus for that. The farmer was able to cover that. Where we are at the moment, with approximately 35 cent as the base price, farmers are not able to cover any of that. This is going to put lads out of business.
Paul Lawless (Mayo, Aontú)
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Does Mr. Carr see dairy as potentially the hardest hit sector?
Mr. Edward Carr:
It is the sector that uses the most fertiliser. Tillage uses a lot of fertiliser as well to grow crops. It is going to have a knock-on effect. If the feed is not there - we are going against everything that we have spoken about as far as the environmental aspect that we have spoken about in the past. We are the best country in the world to grow grass. It is the cheapest source of feed. Here we are now, putting a tax on ourselves to stop us from doing that. We will not be able to afford to do it. We are going to start importing feed instead of that. That is the alternative, but I cannot see how farmers are going to be able to afford to do that.
Paul Lawless (Mayo, Aontú)
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How soon would Article 27a need to be applied in order to avail of the reduction for 2027 procurement processes?
Mr. Edward Carr:
If common sense was to prevail, surely to God, at this stage, the CBAM should be suspended. We are in such an uncertain time. With all the extra costs that have been piled on at the moment, why put this one on, particularly on fertiliser? I do not know whether it will have the same impact on steel, building materials or what have you. I can only speak about our own game. It is putting a massive cost on an industry that is struggling. There are too many other variables at the moment. Why not suspend it? That is all we are looking for. Maybe it needs to be brought in at a later stage, but it should be suspended in these uncertain times.
Paul Lawless (Mayo, Aontú)
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Mr. Carr mentioned risk and the need to de-risk for next year's procurement processes. What does he mean by that? What type of State involvement is he envisaging in relation to that?
Mr. Edward Carr:
My understanding is that even the fertiliser companies that are importing fertiliser are not going to commit to buying this fertiliser unless farmers or co-ops commit to putting money on the table for it. How can that happen at such a high level? As a farmer and as one of the leaders of my co-op, we would not be able to do that. We physically could not afford to do that. It is putting your cards on the table today for fertiliser you will use in 12 months' time, in such an uncertain time. If you do not commit then, will the fertiliser be made at the other side? I do not think this is at our own Government level. It is at a higher level - at EU level - that this needs to be addressed. Our Government should push very hard for it to be addressed at EU level.
Paul Lawless (Mayo, Aontú)
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I raise the idea that co-ops and farm contractors have to pay such a significant upfront cost. I know many farm contractors, for example, are involved in activities in farms across the year and wait for payments at the end of the year. It is going to leave farmers in a very difficult position as well.
Paul Lawless (Mayo, Aontú)
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At the end of the year, they do not know what they are going to make for their produce.
Mr. Edward Carr:
No farmer wants to use his contractor in that line. They provide an excellent service. Every farmer wants to pay his contractor and keep his contractor. If you do not have a good relationship with your contractor, you are in trouble. They provide an excellent service. They need certainty. Their costs are in a very difficult position as well.
Paul Lawless (Mayo, Aontú)
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I thank the FCI for coming in. Can Mr. Fleming explain the practical challenges that he experiences by being locked out of the national fertiliser database?
Aindrias Moynihan (Cork North-West, Fianna Fail)
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We are tight on time.
Mr. Martin Fleming:
We are spreading the fertiliser, yet you are supposed to give a hard number when you purchase it. If you are spreading it as a contractor, if you go in and pick up fertiliser, it is not on the database. The database is supposed to be for each farmer to spread, but if the contractor buys it and sells it to him or spreads it for him, it is not being recorded. It is a bit of a joke. In excess of 50% would be spread by contractors. A lot of that would be picked up in the co-op. If there is no hard number to match it, where does that leave the database?
Aindrias Moynihan (Cork North-West, Fianna Fail)
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I need to move on to Deputy Kenny. Before I do, I have one quick question following up on a point Mr. Carr raised. He stated that CBAM would be costing about 3 cent to 4 cent per litre for the dairy farm. He might not have the data to hand, but if he did, I would be interested to know whether he has an estimated figure for the tillage farmer, the beef farmer and the sheep farmer - for the various enterprises, not just milk. He may not have it now, but could he send it on to the committee?
Martin Kenny (Sligo-Leitrim, Sinn Fein)
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I thank the witnesses for their opening statements. It is clear to everyone that a crisis is looming in regard to fertiliser costs across the country. We are all very aware of that. As the Chair mentioned, a lot of farmers out there were perplexed when they saw the prices shoot up so quickly with the knowledge that large quantities of fertiliser were already in the country. They may not have been mixed; they came in raw and had to be mixed into the various compounds that they go into. At the same time, they were already bought and paid for and were shipped before the Strait of Hormuz was blockaded and we had this crisis internationally. Yet, they saw the prices go up so quickly. It was mentioned that the fertiliser in January had an increase in price. Why? Why did that happen before the Strait of Hormuz was blockaded?
Mr. Edward Carr:
All I can do is explain to the Deputy what happened at farm level this year. If we go back to the back end of last year, there is no denying that 2025 was a very good year for farmers, in both dairy and in beef. As a result of that, it was highlighted that the CBAM tax was coming in on fertiliser. An awful lot of farmers bought their fertiliser at the back end of last year. I think 30% of the fertilisers were bought in the month of December. They bought it for a couple of different reasons. They bought it because they may have had a few pounds after a good year, and they knew that CBAM was coming, so they wanted to take advantage of that and get it before CBAM came on it. A lot of that fertiliser did not get onto farms. It was paid for. In our own co-op, if you forward bought, you had to have it paid before 31 December. A lot of that fertiliser did not get out onto farms until February or March of this year. It was not delivered onto farms. That accounts for a lot of that earlier fertiliser.
Like I mentioned earlier, the CBAM came in after that in January and February. The co-ops had to allow for that. I can-----
Martin Kenny (Sligo-Leitrim, Sinn Fein)
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How much did that put on it? How much per tonne did that increase it by?
Mr. Edward Carr:
It increased by €40 to €50 per tonne on urea. It was higher on calcium ammonium nitrate, CAN. Then there were all the extra inflation costs as well. It might have come in, but that had to be manufactured then and there were extra costs in that by the fertiliser manufacturers. I can guarantee the Deputy that the co-ops did not jump on any gravy train here as far as fertiliser is concerned.
They have done their very best to help their members through.
Martin Kenny (Sligo-Leitrim, Sinn Fein)
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I appreciate that. I am not suggesting that.
Martin Kenny (Sligo-Leitrim, Sinn Fein)
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The issue, as was mentioned, for farm contractors is increasing cost. Fuel will obviously go up as well. In the way in which farmers are going to have to pay not just for the increase in fertiliser but also the increase in the cost of spreading that fertiliser, what percentage are we looking at there? Are we talking about an increase of 20% to 30% or is there any additional data in that regard?
Ms Ann Gleeson Hanrahan:
The fairest way might be a surcharge. We have had a number of major increases since January this year. The labour cost has increased by 4.8%, the new auto-enrolment is 1.5% and parts and servicing have increased already by 25%. Lubricant oils have increased by 20%. All this came about since the war started in Iran. So far we have all those increases. A surcharge might be the way forward in the input costs to cover all costs to the farmer. We are trying to keep it as minimal as possible. That is what we are looking at.
Martin Kenny (Sligo-Leitrim, Sinn Fein)
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It was mentioned that in some cases the contractor buys the fertiliser from the co-op or the provider and then spreads it on the farm. That is a situation where they are contracted to spread at a rate per hectare or whatever. It was mentioned that in order to do that more efficiently and effectively, for some contractors there has to be more investment in equipment. What is the ask in respect of that?
Mr. Martin Fleming:
Yes, if you do not have a herd number, you cannot. There is a significant amount of money to be drawn today in TAMS of up to 60% if you have a herd number for auto steer, section control, mapping and yield mapping and keeping track of it. Some guys cannot get that because they do not have a herd number. If you are just solely contracting, you will not be exempt. It is a big loophole in the overall system. It was there to improve efficiency but some people cannot avail of it.
Martin Kenny (Sligo-Leitrim, Sinn Fein)
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Is there an ask for something to be done around that? Have any discussions with the Department taken place on that?
Martin Kenny (Sligo-Leitrim, Sinn Fein)
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Was there a positive outlook?
Martin Kenny (Sligo-Leitrim, Sinn Fein)
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To go back to the fertiliser costs which is the big one we have to deal with or come up with some solution for, what are the alternatives? If we are looking at a situation where, even if the Strait of Hormuz were open again in a month's time, there is still a situation where fertiliser prices will climb ever higher. One of the reasons for the EU carbon border adjustment mechanism, CBAM, was to look at a prospect where Europe looks to become more in control. This global market that we have all become accustomed to over the years is in crisis because of wars, conflicts in different countries or a pandemic. Europe is looking at how we can be more self-sufficient. That is one of the reasons they put forward for CBAM. What are the possibilities of being able to produce fertiliser that is not so open to such issues in the future?
Mr. Edward Carr:
To clarify the price, I went back to some of my notes on my phone, the fertiliser I bought on 31 December which was delivered to my farm during February and March cost €500 a tonne. That was compound 27-2.5-5 and 24-2.5-10. That fertiliser today costs between €750 and €800 a tonne. That shows the difference in price in the meantime. Mr. Flanagan might cover some of the alternatives.
Aindrias Moynihan (Cork North-West, Fianna Fail)
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We will move on to Deputy Newsome Drennan.
Natasha Newsome Drennan (Carlow-Kilkenny, Sinn Fein)
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I thank the witnesses for coming in. In regard to the fertiliser that was coming in, did individual farmers buy that? I am trying to get my head around CBAM. Was CBAM added onto the price, even though the fertiliser was already in the country, or was the cost added to it when it was manufactured?
Natasha Newsome Drennan (Carlow-Kilkenny, Sinn Fein)
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Yes, but that was not sold until after Christmas.
Natasha Newsome Drennan (Carlow-Kilkenny, Sinn Fein)
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Yes, but fertiliser brought in before the end of the year did not have CBAM.
Natasha Newsome Drennan (Carlow-Kilkenny, Sinn Fein)
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That is a 50% increase. It was mentioned that there is still some fertiliser coming in by sea. What are we talking about? How much is coming in compared with what should be coming in? Is it only in dribs and drabs?
Mr. Edward Carr:
I am not so sure how much is coming in. All I know is the co-ops are finding it difficult to get a supply of fertiliser. I do not know the exact figures. Our major concern is for the coming year. This year is fairly well covered but our major concern is for the coming year and how it is going to be handled.
Natasha Newsome Drennan (Carlow-Kilkenny, Sinn Fein)
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The EU is proposing the new fertiliser action plan. That will come in and will be published shortly. I presume that the witnesses had no input into that. What input, if any, has our Government had on that?
Natasha Newsome Drennan (Carlow-Kilkenny, Sinn Fein)
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Did that come up in your conversation on 20 April, what our Government has done on that? That is something that needs to be asked of it, what it is doing for Irish farming, given that plan is going to be published shortly. Ireland should have had an input in that. That would be worth asking. At the meeting that took place on 20 April, was there a proposed date for the next meeting?
Natasha Newsome Drennan (Carlow-Kilkenny, Sinn Fein)
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June is the next one. Reading the two documents, there is a lot of comment along the lines of "we did not get a say" and that kind of thing within this. Nothing about you should be without you. Is this just the same shit that goes on with our Government? They just go off on a tandem, do their own thing and do not ask the people who are at the heart and soul of the issue, who know exactly what is going on and who know the best way to look after our environment. Possibly fertiliser is being spread and we do not quite need all of it, but if we had the up-to-date equipment, we could nail it to exactly what is needed, which would be much better. With regard to the grants, has there been a conversation that is favourable with respect to the grants? I understand what is being said about how a farmer can get the grants, if they choose to. However, we are not spreading our own fertiliser at home because the contractors are doing it for us, but they cannot get the up-to-date equipment because it is so expensive. I am not going to spread fertiliser at home.
I will not fork out for that heavy equipment to use it for a short period in a year, so it makes sense that contractors get those grants and not the smaller farmers.
Ms Ann Gleeson Hanrahan:
One of the suggestions we have made to the Government - and in Europe as we are members of CEETTAR in Europe - is that farmers be paid for the use of the technology rather than its purchase. For example, if a farmer hires one of our contractors to spread fertiliser, the technology will be on our equipment, we provide that equipment and invoice for that, so the farmers should be paid for getting it spread with the proper equipment.
Natasha Newsome Drennan (Carlow-Kilkenny, Sinn Fein)
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The only issue with that is that the contractors would have to fork out for it at the start. They have to put their necks on the line first.
Natasha Newsome Drennan (Carlow-Kilkenny, Sinn Fein)
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If farmers' costs go up, food costs will go up.
Natasha Newsome Drennan (Carlow-Kilkenny, Sinn Fein)
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Will each of the witnesses make a statement about what they think the impact will be on the cost of food? The cost of fertiliser has gone up and the spreading cost has gone up because of fuel and so on.
Ms Ann Gleeson Hanrahan:
It is difficult to quantify, as I said earlier, with the increase in energy costs. Fuel is linked to many different sectors, from the manufacture of fertiliser to energy or electricity to the haulage of parts and equipment. At the moment, the price of fuel is so volatile that we cannot put a figure on it at the moment.
Natasha Newsome Drennan (Carlow-Kilkenny, Sinn Fein)
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Yes, and the cost of food will not necessarily go up immediately. It is in the latter part of the year that it will hit.
Natasha Newsome Drennan (Carlow-Kilkenny, Sinn Fein)
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Yes, consumers will take the hit.
Aindrias Moynihan (Cork North-West, Fianna Fail)
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Before I move on to Deputy Cooney, I remind members that, although they may feel strongly about different issues, they should be careful about the language they use.
Before I go on, I have one quick question for the contractors. They talked about supply and spread being one of the ways they do it. What percentage of fertiliser do they put out under supply and spread and what percentage do they spread when the manure is already in the yard? Is it half and half or 60:40? Will they give an indication?
Joe Cooney (Clare, Fine Gael)
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I thank the witnesses for coming and for their detailed opening statements. From those statements, it seems there is a lot of concern. There is no point in saying there is not. One line in the statements was "in Ireland, we have seen significant pressure on fertiliser cost in recent weeks, with average urea costs increasing by 43% and other fertilisers ... by [up to] 24%", which is a massive increase. We are wondering at this stage whether farmers will be able to sustain these increases going forward. In another part of his opening statement, it says, "There is an enormous financial challenge associated with ensuring that enough fertiliser ... [is] secured for the 2027 season", which again is a concern. The third thing I picked out of the opening statement was that there seems to be a concern about whether we will have fertiliser in the future.
That is where my question comes from. It is about the dependence on fossil-fuel based fertilisers and that this represents a big structural risk to the long-term sustainability of the current Irish farming model. Prices are one aspect, but the supply chain is a bigger and more profound issue. This has been brought into sharp focus in recent times, as we are all well aware. How do the witnesses' organisations plan to deal with this risk and remove it from the future as a serious concern for the farming community?
Mr. T.J. Flanagan:
On how we plan to deal with this risk, to be fair, a lot of it is out of our hands. It is like the previous question about whether the costs will come to consumers. Unfortunately, the majority of what we produce is exported to world markets, where CBAM does not apply and the consumers in the markets will set the price. We will be price takers. That is in answer to the question from another Deputy.
On how to deal with this risk, a huge exercise in water quality is taking place. We have obtained our derogation for the short term but we absolutely have to obtain it for the long term and a lot of that is about reducing the amount of fertiliser being used and using it a lot more judiciously and carefully. One of the risks relates to the fact that a slight majority of the total of nitrogen fertiliser that is imported is used by dairy farmers. Rightly or wrongly, dairy farming is probably the enterprise that has the greatest capacity to absorb some increase in fertiliser. By no means can it afford it, but it will continue to use a reasonable amount. There is significant concern that the other less profitable enterprises will use dramatically less fertiliser and introduce a lot of risk to their businesses. Will they be able to grow the fodder for next winter, and so on? There is a big strategic risk for those enterprises if their use of fertiliser drops below a particular level. That is key.
Going back to the issue of nitrates, a big effort is going on at the moment to improve water quality and reduce the level of nitrates in our rivers. I hope that will, to some extent, reduce the amount of nitrogen fertiliser being used. There is a national commitment and strategy to reduce the amount of chemical nitrogen. That will, to some extent, reduce our dependence, but ultimately we do not have a domestic supply of chemical nitrogen. We are going to be importers and, unfortunately, we import from third country markets.
Joe Cooney (Clare, Fine Gael)
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Will it be a serious concern going forward? Does Mr. Flanagan have a serious concern about it?
Mr. T.J. Flanagan:
We represent our co-operatives so we only know what they are finding. Their concern is that to persuade manufacturers to manufacture fertiliser for next year, and the biggest ingredient in chemical nitrogen is natural gas - it is energy, people in the Irish supply chain will probably have to commit to prices that will be even higher than they are now. That is the big concern. Is is economical to do that?
Joe Cooney (Clare, Fine Gael)
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Is it possible to reduce fossil fuel-based fertilisers without reducing farm output and incomes?
Joe Cooney (Clare, Fine Gael)
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Why does Ms Gleeson Hanrahan say that?
Joe Cooney (Clare, Fine Gael)
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We are all well aware that output and incomes are important to farming communities.
Mr. Edward Carr:
Also, from an economy point of view, we export 90% of what we produce. That adds to the coffers of the State. Surely to God we are not happy to reduce our production levels.
We all pride ourselves on the food we produce and export. If we do not have a steady flow of fertiliser - we will use it as beneficially as we can - we are not going to be able to produce food, beef and milk. Exports will be down as a result.
Joe Cooney (Clare, Fine Gael)
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The witnesses raised those concerns in their opening statements. That is why I asked the question.
Paul Daly (Fianna Fail)
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I welcome the witnesses from ICOS and the FCI. I am looking for clarity on the supply and the spreading of fertiliser. The previous version of this committee dealt with the tedious Veterinary Medicinal Products, Medicated Feed and Fertilisers Regulation Act. I seem to remember - my memory is not great - it being mentioned that GAA clubs would struggle to get fertiliser for their pitches and golf clubs for their courses if they did not have herd numbers. Will Mr. Fleming explain what he said to the effect that he can buy fertiliser and spread it, and nobody knows where it went in the context of the database or the register. Can co-ops sell fertiliser to people without them specifying a herd number or indicated where it is going to be spread?
Paul Daly (Fianna Fail)
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So the database is not worth paper it is written on. We do not know what fertiliser is out there. There is talk of stuff coming in from the North. Ignoring that, Mr Fleming said that he can buy fertiliser and I can hire him to come and spread it on my land and it will not be recorded.
Paul Daly (Fianna Fail)
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The representatives from ICOS might want to comment. Can co-operatives sell fertiliser to contractors in the absence of a herd number or without knowing where that fertiliser goes? We sat here for weeks going through the legislation to which I refer, including in the context of pre-legislative scrutiny. The purpose of the legislation was to have a register and to know where all the fertiliser was going.
Paul Daly (Fianna Fail)
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That is what I thought, but Mr. Fleming said he could buy it, sell it and there is no record of where-----
Paul Daly (Fianna Fail)
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Is Mr. Fleming not subject to inspection if he is putting 100 tonnes of fertiliser per acre on his herd number? Basically, the thing is not working.
Paul Daly (Fianna Fail)
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I know. I had to ask that question because it was stated. That is not on my list of questions relating to today's topic. We need to look into this. We wasted a term dealing with the veterinary medications and fertiliser regulation legislation to which I refer. If that is what is going on, it is not right. I specifically remember the issue of golf courses being raised and how they could not get a bag of fertiliser because they did not have herd numbers.
Paul Daly (Fianna Fail)
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That was one of the questions I was going to ask before that was said. Who did ICOS ask to include it? Why was it excluded and by whom?
Ms Ann Gleeson Hanrahan:
I would need to get all that information for the Senator, because I was not in this position at the time. However, we had written asking to be included in the conversations on the legislation because the contractors were spreading 80% of the fertiliser at the time. We received a letter back. I do not have it with me, but we do have-----
Paul Daly (Fianna Fail)
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I ask Ms Gleeson Hanrahan to forward a copy to me. At the time we were discussing that legislation, the big issue raised was that we would not be able to keep a correct record on the database because of the North and because of our political and geographical situation. I know that nobody is going to give me a straight answer. The witnesses do not know. Nobody knows. There is all sorts of speculation out there. Is there a price difference between here and the North? Do the witnesses believe fertiliser is coming in from the North? Are sales down? If they are down, would it be because stuff is coming in from the North or are farmers cutting down? If they are cutting back because of price, could that lead to a potential fodder crisis?
Mr. Edward Carr:
Probably the biggest issue is that there is no CBAM on fertiliser in Northern Ireland. I am not saying whether it is coming in or not, but there is an opportunity for it to come in because CBAM does not apply up there. That is why we were so strong on that. There will eventually be CBAM on that fertiliser, but it is not there this year. That is why we fought so hard last year for the CBAM tax to be suspended until everybody was under the same umbrella.
Paul Daly (Fianna Fail)
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By virtue of that answer, I can take it that fertiliser is coming in from the North. As a result, our database is a waste of time and is achieving nothing.
William Aird (Laois, Fine Gael)
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No one can buy hundreds of thousands of tonnes of fertiliser. They can buy the amount that they are allowed to buy.
Aindrias Moynihan (Cork North-West, Fianna Fail)
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One second-----
Paul Daly (Fianna Fail)
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This is Westmeath time. The Laois man will be in there on-----
William Aird (Laois, Fine Gael)
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I could give the Senator a couple of minutes of mine.
Aindrias Moynihan (Cork North-West, Fianna Fail)
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Deputy Aird is next.
Paul Daly (Fianna Fail)
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I have another question that relates to what was in the opening statement. Copa-Cogeca has reported that fertiliser prices have risen to match the CBAM levy and could amount to €12 billion over the next seven years. As European prices have risen to match the CBAM levy, the true cost could be €39 billion which is three times €12 billion. Why is that the case? Are people deciding that because it is going to be more expensive coming in, they will put it up as well in order to get a piece of the action? Is that an unnecessary increase.
Paul Daly (Fianna Fail)
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That is another part of my question. Is that €39 billion CBAM on just fertiliser or is that the entire CBAM take on steel, fertiliser, etc.?
Paul Daly (Fianna Fail)
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It is increasing three times. If it is going from €12 billion to €39 billion, the domestic increase is three times what CBAM is actually costing. The figure of €39 billion indicates somebody going for a jolly because they see an opportunity to put up the prices.
Paul Daly (Fianna Fail)
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They are increasing it just because there is tax on the stuff they are not producing. It is easy to blame governments. Although I am a member of a Government party, I do not agree with CBAM. I am in the steel game. I do not agree with CBAM. I put that on the record. However, it is easy to blame CBAM. Based on those figures, jumping on the bandwagon because of CBAM is the biggest part of the increase. Maybe we need to start weeding out who these people are.
Paul Daly (Fianna Fail)
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This is 2026. It states it will be €12 billion in seven years.
Paul Daly (Fianna Fail)
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That brings us up to 2033. The report refers to a figure of €39 billion. It is going to go from €12 billion to €39 billion, which is a threefold increase. I cannot see where that figure comes from.
Paul Daly (Fianna Fail)
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It is because they can. That is the bottom line. I am not taking the Government's part; it is not all to do with the Government. There are people increasing prices here just because they are saying a rising tide lifts all boats and that if others are at it, they might as well be at it too. There is an element of that involved.
Paul Daly (Fianna Fail)
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While we need to put pressure on the Government on foot of CBAM and in order to try to get Article 27a introduced, do we need to instigate an inquiry into the industry?
William Aird (Laois, Fine Gael)
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The bottom line is that we have heard about all the increases. I do not need to go over them again. The price of milk is 37 c per litre, give or take. The forward selling price of barley is €185 a tonne. It costs tillage farmers over €500 an acre to plough, till, sow, cut and spread.
How in the name of God? Over 40 years ago, my father would tell us that we did not need to go to six buckets ago to do the maths on that. What have they left, those cereal growers? They are left the area aired and the straw. It is the very same as telling anybody who comes through the gates on Kildare Street to work in here that they will not be paid any salary but will get travelling expenses. How low do they want the poor farmers of this country to stoop? We, the people in here, consistently talk about young farmers and increasing their number because we are only at 3.5%. Let any of them listen to this programme here today and see how many of them will want to farm. It is all very fine to talk about the forward buying that was done last year because of prices of well north of 50 cent. How many will be forward buying this year? If we look at the percentage of people who forward bought manure last year, I guarantee the percentage would be small in the overall context, because an awful lot of farmers can only buy from one year to the other. They do not have the capabilities. They are not milking hundreds of cows. They may be indebted for doing a whole lot of farm buildings. Do not tell me that there was a whole lot of young people this year that could forward-buy the manure last year for 2026. They are a very small percentage, if you look at the figures. These are the people today that are really feeling the pinch and these are the people today that we have to stand up to account for. I can tell what is going to happen because I saw what happened to farmers with the sugar beet. I was not a TD at the time. It was an awful pity that I was not a TD and in the Dáil Chamber when the sowing of beet in this country was done away with. It was the single biggest mistake after the closing the railway lines to do what they did and they destabilised the whole cereal growing sector in Ireland. A beautiful industry that we had, producing the finest quality sugar. We are now importing sugar. The same is going to be done with grain if they do not stand up and be counted. I milk cows but I could not yoke a plough. We are going to see the finest of agricultural land in this country all going to renewables. Does anyone who loves tilling the soil and lifting soil with their bare hands want that? They do not. They want to be proud producers, like we were in this country, of the finest quality produce. We are the envy of Europe. Mr. Haughton knows that, having travelled a good bit on behalf of the agriculture committee. He knows how proud the other Europeans see we are. We have a grass production system that needs the nutrients to grow and if we are cutting off the very line of those nutrients, we are in a very serious situation. I understand all about derogation, but remember one thing: there are only 6,000 farmers in this country in the derogation, out of 110,000 to 120,000 farmers altogether.
That brings me to the cost of agricultural contracting. We all know how much it is costing. I have sympathised with agricultural contractors all my life since I was a little fella. They are the only people who work around the clock, seven days a week. We can see that most of them are haggard at a very young age. Why? It is because of all the hours that they put in. They put in those hours to be able to make their repayments. It is a very tight margin on it.
What is the main priority of the EU CAP programme? It is to make sure that we increase the number of young farmers from 3.5% to 7% and 8%. They do not have a hope. It was the same when they said that this country would get so many thousand hectares extra into tillage. It is less they will have. They are going to force them off the land.
Let the witnesses talk to me about fertilisers and where farming is going. Ms Gleeson Hanrahan is a contractor. I ask her to tell me what is wrong.
William Aird (Laois, Fine Gael)
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Does Mr. Flanagan see more contractors going into agricultural contracting or fewer?
William Aird (Laois, Fine Gael)
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There is the answer. ICOS does not spend a lot of money. Does its representatives see more or fewer young people going into farming?
William Aird (Laois, Fine Gael)
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There are the answers to the questions that I posed here today coming from all of the professional people involved, so it is not just me. I am just looking with my own two eyes to see what is happening on the ground. That is all I can say. No other industry is taking a reduction in the price of what they are producing. That is what I am talking about, namely, the price of what is being produced. That is my point and that is where I rest my case. There are a lot of things to be looked at and if we do not look at them and be serious about what is happening, the show is going to be over. There is an old saying that the time to catch the train is when it is at the station. Now is the time to engage with people like the witnesses and to tell the officials in the Department of agriculture exactly what is happening on the ground.
Aindrias Moynihan (Cork North-West, Fianna Fail)
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Thank you. Before I go to Deputy Cahill, I have a quick question, because the matter came up earlier when discussing alternatives. Have any co-ops or any organisations been looking at the possibility of alternatives like recovered nitrogen from manure, RENURE?
Mr. T.J. Flanagan:
RENURE is technically provided for in European law. My understanding is that it would be the State's intention to legislate for it within Ireland. RENURE is when manure is treated to make the nitrogen portion of it more inorganic than organic, thereby increasing the bioavailability of it, etc. Effectively, a farmer could export slurry off the farm and if it was to be treated to the RENURE standard, it could be imported back in. It has potential and possibilities in the context of derogation, etc. A farmer could grow more grass per kilo of nitrogen if it was converted to RENURE, but it is expensive and is a number of years away. In Ireland, it could be half a dozen years before it is in place. It probably needs to sit with an anaerobic digestion, AD, industry as well because it would be treating digestate to the RENURE standard. It certainly has potential, but it is a number of years down the road
Michael Cahill (Kerry, Fianna Fail)
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I welcome our guests to this very important meeting. I have just a few questions. Can we get more clarity on the state aid rules that are supposed to alleviate the costs? What do the witnesses want to see in the fertiliser action plan that is due to be introduced in May? How do we reduce our dependency on importing fertiliser? Surely that should be the ultimate goal. Is it in organic alternatives? Obviously, we should be exploring all options and avenues there. Are the witnesses working with Copa-Cogeca and other co-op groups lobbying for the implementation of Article 27a in invoking CBAM?
Mr. T.J. Flanagan:
On the state aid rules, the Deputy would need to speak to the experts. None of us at this side of the table is adequately expert in state aid rules.
We know that some flexibility has been introduced and we encourage the Department and the wider State to maximise the input they can have in the sector. From our point of view, it is about helping to derisk all the players to take a position on fertiliser next year. Manufacturers that use huge amounts of energy to make fertiliser will need someone to guarantee a price for them, although that is probably unrealistic.
On the fertiliser action plan, the first thing we would like to see is CBAM disapplied to fertiliser. That is the most important thing. My understanding – I am certainly no expert – is that it is a pretty simple sum in relation to nitrogen and fertiliser. It all relates to the price of energy. We are scoring an own goal by applying a tax on our food producers when that is the one thing we can control.
As I mentioned earlier, we have worked closely with the umbrella organisation, Copa-Cogeca. Cogeca is our part of it, that is, the co-operative part, while Copa is the farmers’ part, but there is a single secretariat. We work very closely with it. It works across all the member states to try to get support from MEPs in every country so that we can apply Article 27a and get it disapplied to fertiliser. That is a tough ask. Our sense of it is that perhaps the Commission realised it made a mistake on applying the CBAM to fertiliser. When the Copa-Cogeca-generated figures were put to it detailing a direct €12 billion cost and an indirect €39 billion cost, it must have realised what it had set in motion. We sense that it is quite difficult for the Commission to figure a way out of it because CBAM is so built into the architecture of future funding for the EU. CBAM is an integral part of its plan to fund the EU budget going forward. If it could find an easy way in the morning to unpick it, perhaps it would but it has found itself in a position where it is resisting strongly.
Michael Cahill (Kerry, Fianna Fail)
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What about the alternatives?
Mr. T.J. Flanagan:
The alternatives for reducing dependence on chemical nitrogen are marginal. They are about efficiency and relate to what the contractors are talking about in terms of getting the maximum per tonne or kilo. They are all marginal and about a percentage here or there. For example, our water quality efforts to try to reduce the amount of nitrogen that gets into our waterways will not dramatically reduce the levels of nitrogen. They will be marginal.
Peter Cleere (Carlow-Kilkenny, Fianna Fail)
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I thank the witnesses for coming in. I apologise for only coming into the meeting now; I was attending another meeting.
It is obvious that there is real concern among the farming community about fertiliser cost and availability coming into this season and onto next season. Everyone is looking at what is happening internationally. They are hearing talk of supply disruption and are worried that the bill will land at the farm gate again. That is a big worry. In my constituency of Carlow-Kilkenny, the margins of many family farms are already tight. The global uncertainty in which we find ourselves is a huge challenge. Farmers and agricultural contractors cannot continue to take hit after hit on their input costs and simply be expected to carry on as normal. I know a suite of measures were announced today on the rebate scheme for diesel, which is welcome, but we have a ticking time bomb with fertiliser costs. This is going to be very challenging.
We all know Ireland depends on agriculture, and agriculture depends on access to reliable and affordable fertiliser. This, therefore, needs to be treated as a strategic issue rather than a seasonal one. What do rising fertiliser input costs specifically look like? For example, let us rewind to 2025. What are the basic costs of fertiliser looking like this year in comparison? How much of a percentage increase are we looking at? I am asking for a rough figure. I know the witnesses will not have the exact figure to hand.
Mr. Edward Carr:
At farm level, there is an approximate 30% or 40% increase in fertiliser costs. As I said earlier, that equates to almost 3 cent per litre in production costs, which is massive. The base price of milk is back to 37 cent per litre. It is just not there. To reiterate, it is also about the uncertainty of the coming year. Those figures are for this year. The uncertainty of the coming year is causing major concern for farmers and co-operatives.
Peter Cleere (Carlow-Kilkenny, Fianna Fail)
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To get specific, there is an acknowledgement from the witnesses that there is a policy gap at the moment, which they want to see actioned and addressed. They are looking for formal recognition of contracts that are in the national fertiliser database. What exactly would that look like?
Ms Ann Gleeson Hanrahan:
We have had no recognition at all up to now. It is to include the extra cost that we have facing us in spreading as well as the purchasing of equipment to comply with regulations around the environment and sustainability. That is where we should be fitting in the discussions, especially as the end users. We support the farmer in spreading the fertiliser as an end user. Really and truly, we should be included in these discussions, as far as I am concerned, to achieve environmental and sustainability standards.
Peter Cleere (Carlow-Kilkenny, Fianna Fail)
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Does the Association of Farm and Forestry Contractors have any access to targeted grant aid?
Ms Ann Gleeson Hanrahan:
We have no access to targeted grant aid whatsoever. The price of any machine that receives grant aid seems to escalate. That is a major problem. It also undervalues our second-hand machinery. In our sector, we try to keep machinery as up to date as possible. We do not want to be going from farm to farm in downtime. Any downtime is very costly for our sector. We try to keep our equipment as up to date as possible but we are finding that our second-hand machinery has no market.
Peter Cleere (Carlow-Kilkenny, Fianna Fail)
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For the people who might be watching at home, will Ms Gleeson Hanrahan outline any additional costs associated with GPS technology add-ons and so forth? What kinds of additional cost are there?
Ms Ann Gleeson Hanrahan:
When it comes to add-ons on fertiliser spreaders, it is approximately €5,000 per section control and then maybe €5,000 for GPS. If there is autosteer, it costs another €5,000 to €6,000. Those are the approximate costs associated with add-ons. For each technology added, there is a cost factor. On the other hand, the farmer receives serious data back off the machines when operating them. The data can be looked into. They are like computers today. They are fantastic but they come at a high cost.
Predominately, for the purchase of any tractor, it is approximately €1,000 plus VAT per unit of horsepower. It is very easy to make it up. The equipment we use ranges from 200 or 210 horsepower up to 300 horsepower. It is easy to add up the cost at that rate.
Danny Healy-Rae (Kerry, Independent)
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I am glad to get the opportunity to speak. I welcome our ICOS and the Association of Farmers and Forestry Contractors in Ireland. On a day like this, the witnesses would perhaps like to be anywhere other than here but we appreciate their presence.
I am around long enough to know that farmers had a good year last year. If farmers have one good year out of five, they seem to get penalised the next year. That has been happening over and over again. The thing keeps evolving all the time. Cattle, beef and dairy prices were good last year and we kind of were always expecting that something would happen, and now we have it with the cost of fertiliser going up. We can understand it in a way because of the war and the carry on there, but this CBAM charge is the same as carbon tax. It is to deter people from buying fertiliser. That is what was intended. The EU might be regretting it now because it did not realise the war was going to happen and now everything is coming together.
We are a very small country, and we should appreciate what farmers are doing. Whatever the product is, be it beef, dairy or whatever, we should really appreciate them. If costs are going to go up, it is the consumers inside our towns and cities and all through the country who will pay the piper at the end of the day because someone will have to pay. Farmers or anyone involved in the production of food are not Mother Teresa. Mother Teresa is gone. They have to keep going and stay working. We had the grain growers in before the committee, and they were promised this and that. We can now see that they are going to be worse off this year than they were last year. Like Deputy Aird said about the sugar factory, we will not really miss or realise the loss they will be until they are gone. It is grand to see the golden grain fields in July and August, and we need desperately need the feed and the straw down our way. These are the things we will miss.
The North of Ireland and the UK are certainly not paying a CBAM tax, and I can understand and would not blame fellas for going over the Border to bring grain down. I worked it out in my head that for the CBAM alone, they would be saving €2,000 or maybe more as well on 40 tonnes. There are arctics well able to bring down loads like that and legal loads. We must inquire into it more. We had to do it during Covid-19, and we saw things change then. I regret that the Department of agriculture and the Minister for agriculture are not here to listen to this debate this evening because we are in a desperate state now with the costs of things. I hope the Minister gets time to look at it at some point.
Teagasc is saying that for every kilogram reduction of chemical fertiliser, profitability reduced on average by €4.14 per hectare due to the requirement in place for it. We are losing €4.14 per hectare for not spreading the amount of fertiliser we need or should be spreading. It is all about production and getting value out of the grass. If farmers do not have grass, they will not be able to feed cattle and will not milk cows. It is as simple as that. There is nothing to replace fertiliser. It is like when Kerry took John Egan off the day they played Dublin, and he was just after scoring a point. They really did not have anyone better to bring on that day. They took him off after he scored. We have nothing to replace fertiliser at this time.
Von der Leyen or whoever is trying to make us cut our production one way or another, and at the same time, and I cannot understand it, they want to bring in beef from Brazil and Argentina. We are a small country in the middle of the wild ocean that is trying to survive. If we put out every light in the country, it would only make a difference of 0.13% in the worldwide context. We are all under the one sky, and that is the difference we will make trying to change the weather. If we were at it in saecula saeculorum we will not be able to change the weather and we should realise that. Even a climatologist said that we should not be doing what we are doing because we should not be hurting people financially in their pockets. He said that we should cut down emissions by all means and do the best we can but do not hurt people financially because that is not right. That climatologist died last year.
Do what you can for farmers in helping on the co-op side, but we must really see if we can fertiliser down from the North of Ireland at this point in time. From next year, we must make more efforts to ensure that the Minister for agriculture, who talks about generational renewal and getting young farmers at it, deals with this issue.
I have only seconds left for the witnesses to say something, and I welcome the witnesses here again.
Mr. T.J. Flanagan:
I would not comment on the issue of bringing fertiliser in from Northern Ireland. We would engage with the Department to encourage it to work with their northern colleagues to ensure that they have a register in the North as well. It would be wrong that people could bring fertiliser in from the North to avoid having their fertiliser purchases on the register. That would be wrong and would be against the national interest.
Danny Healy-Rae (Kerry, Independent)
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It is because of their pockets that I am talking about bring it down. I do not give a devil about the register. The way one of the witnesses talked about it, I would get him to bring me the fertilisers all day and every day. I am not worried about the register at all at this time because nobody seems to be worrying about the farmer. Continue anyway; sorry for interrupting you.
Danny Healy-Rae (Kerry, Independent)
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This is one of the most serious issues that this committee will discuss this year. The man that is there with a tractor or the CI contractor, if he has a new tractor that uses AdBlue, he should not be charged carbon tax at all on his diesel because he is doing everything possible not to create emissions. As well as that, for the farmers who are spreading fertiliser and growing grass, grass sequesters carbon. It is totally alien. They are hunting farmers on the double and the treble with the CBAM, the carbon tax and all of the different things that contractors and farmers have to undergo to produce and at the stay time stay afloat. They are making impossible for us and making it harder. In a way, I am glad that the youngsters are getting afraid to take on what their fathers and mothers have been doing because they have been blackguarded for years, and maybe now, when they see that young fellas are not inclined to take over and to follow on, they might cop on then because it is time they did.
William Aird (Laois, Fine Gael)
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I have a very sincere question for both parties here today. The witnesses are on the ground working and can see what is going to happen. They can see a projection for five years. When the witnesses are on the ground doing their work, be it hire work or in their role with ICOS, what is the age profile of farmers and those who will take over the traditional family farm? How do the witnesses see that going? I would like them to give me an honest answer because they are on the ground. What I see around me is there will be less and less, and it is happening at a quicker pace than I even thought it would happen at.
Ms Ann Gleeson Hanrahan:
I will give the Deputy a perfect example. Years ago, and I am in contracting quite a while, when we came out with the harvester a field to work - I follow a forage harvester - there would be a line of young lads going mad to get up with you on the tractor. They were young farmers. Your biggest job in the yard as a loader driver was safety and to keep them away from it. You would give them all turns to get up with you. They would have the interest in the machine, and you would show and tell them things. When we go out today, there is no one. Last year, one young fella got up with me.
Ms Ann Gleeson Hanrahan:
They are not there. The age profile of the majority of farmers is high. We see that a lot of farms are starting to be set because there is nobody to take them over, and that is across the country. I hear it from our members and it is portrayed across the country. There is going to be a reduction in farms unless something happens. They have to be profitable. That is in my opinion.
William Aird (Laois, Fine Gael)
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Is the family farm going to go? Is it under serious threat? The family farm is under serious threat.
Mr. Edward Carr:
We can all see it. The whole dynamic has changed. I grew up on a family farm. My parents milked 30 cows and we all got an education and the lads went off and did what they wanted to do. I stayed at home farming. Unfortunately, 30 cows would not take you far today. The family farm needs at least 70 or 80 cows now. Every business changes, I suppose. We cannot be too negative about it either. I am chairman of our Tipperary co-operative. We have 1,400 meat suppliers at the moment. We did a survey back in January. While we will lose farmers into the future, we still have a cohort of people. Our production at the co-operative will increase over the next five years if legislation and other things do not get in the farmers' way. There is a great generation of young people out there who are willing to continue to farm the land. If a plot of land goes up in our part of the country or in any part of our catchment area in the co-operative, there are a lot of people mad for it. The Deputy knows the price of grassland at the moment.
William Aird (Laois, Fine Gael)
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How many young farmers can buy land in Mr. Carr's area at the moment? How many young farmers could go out and buy land and be competitive?
William Aird (Laois, Fine Gael)
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Absolutely, I agree with Mr. Carr.
Mr. Edward Carr:
There is no point in wiping them off the face of the earth and saying there is no future for them. Unfortunately, the dynamic has changed. I would love if it was like when I was growing up that you would make a good living from 40 cows, but unfortunately it has gone away from that now. The scale is bigger but at the same time we have to try to slow down that pace as much as we possibly can so that another generation or two will get a chance to make a living off the land. That is what we try to do through this generation and all the rest at co-operative level in particular, to try to encourage our members and to work with them. That generation needs help. When we go out there to farm organisations and everywhere else, there are many young people who are willing to take on the mantle. While there will fewer farmers producing, there will still be as much produced. If we stopped putting regulations in their faces, it would be very helpful.
William Aird (Laois, Fine Gael)
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That is why we are here today talking about the extra costs on manure that is being brought in. They have not accounted for that when they were trying to do up the farm programme or whatever is over five years, which you could do years ago. I explain to people that Mr. Carr's generation would have bought their way into farming, because they would have bought milk quotas to try to increase the farm. Then the milk quota was abolished and that asset was gone so then there was a free-for-all. That is what was happening, so there are swings and roundabouts.
At the moment, however, there seems to be consistently rules and regulations that are coming down on top of people and there is a huge financial burden to them which they had not factored into their accounts. Who would have thought last year that silage making would be north of €200 an acre to put to bed? Who would have said or who would have thought that, even with what the Government has introduced for fuel charges and even after those rebates, which are very welcome, that they would be paying the price they are paying for fuel? All of that is very difficult going forward. That is why I mentioned the derogation today and that there are 6,000 farmers in it. There is a whole cohort of other farmers in very tight and maybe even non-profit-making businesses in the country and we need to try to ensure we protect them.
All this talk was done before, and where have all of the vegetable growers gone? They have gone. Everybody is talking about supporting them and everything else and supermarkets were buying off them. This could be another day's work, but the bottom line is they are gone and they are not coming back. That is all I am saying. We need to work for the future to ensure we give the best possible chance to any young person, he or she, out there who is doing this. There are fantastic people out there, better than ever I was, I can tell you that, any of the younger ones coming along. They are absolutely fantastic. I am always fearful, however, and we have to look after them and try to encourage them and to make it so they can make a profit.
Mr. Eamonn Farrell:
Very briefly, 7,000 farmers are dependent on the derogation, but there is another cohort who are maybe just outside the derogation and who might export slurry to keep in compliance. We have seen the price of land in terms of rental costs when the derogation reduced from 250 kg N/ha to 220 kg N/ha. That impacts on all farmers. What was communicated to the European Commission, in particular, when Commissioner Roswall visited Ireland in November before the derogation decision before Christmas and she visited an intergenerational dairy farm with a farmer and daughter, was impactful in making the case to the Commission. We need to highlight the issues of generational renewal at all times.
Aindrias Moynihan (Cork North-West, Fianna Fail)
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There has been a huge wealth of information there and a fairly strong back-and-forth discussion on it. There are a number of questions that were not answered, the details on which the witnesses might forward to the committee. Before we finish, I ask the witnesses to give us the headlines if there are any points on fertiliser they felt did not get adequately covered or if there are any points they want to make on this that would be on the record for the members when we come back to look at this further. There are a few moments left if the witnesses want to raise any further points on the fertiliser issue.
Ms Ann Gleeson Hanrahan:
The only thing I see in our sector is that the reduction of the use of fertiliser would be a major reduction in income for our sector. That is one of the main points I would have on that, for any of our members who would be spreading. That is something that would have to be looked at.
Mr. Martin Fleming:
That there are decisions being made on our behalf without us being consulted, which has an awful effect on our business going forward. If there were somebody here making decisions in the Chair's place, the room would not function. It is very hard to function properly without-----
Aindrias Moynihan (Cork North-West, Fianna Fail)
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I am facilitating the meeting.
Mr. T.J. Flanagan:
While understandably the impacts of this current crisis have been compared to the Ukraine war situation, this is infinitely worse because, in the early days of the invasion of Ukraine, grain and milk prices were 50% or 60% higher than they are now. That is the thing. This is much, much worse than the crisis we were facing then because the system just cannot absorb those costs now.
Aindrias Moynihan (Cork North-West, Fianna Fail)
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Tá feirmeoirí an-bhuartha mar gheall ar an gcostas don leasúchán. Tá mé tar éis é sin a fheiscint leis an tslí go raibh an-chuid de tugtha isteach sa tír anuraidh agus go raibh fós praghas ard air ag tús na bliana in ainneoin an supply a bhí ann. Tuigim go raibh ceisteanna mar gheall ar CBAM, agus, níos déanaí, an cogadh, ach tá sé an-tábhachtach go mbeadh an cheist sin fiosraithe agus go mbeadh feirmeoirí sásta nach bhfuil aon duine ag déanamh bligeard orthu.
Bogfaimid ar aghaidh. Gabhaim buíochas leis na finnéithe as páirt a ghlacadh. I thank everyone for their participation and for their questions and answers. As there is no further discussion, today's meeting stands adjourned.