Thomas Byrne (Meath East, Fianna Fail) | Oireachtas source

I thank the Senator for raising this important issue. Notwithstanding what he said about farmers taking the hit, which they often do, there is no doubt that this would have a knock-on effect on food prices and is of general concern around the country. I come from a fertile county and this is no less an issue in Meath than it is in Tipperary, and I am concerned about it as well.

There are no fertilisers manufactured in Ireland. Rather, fertiliser companies blend a number of imported fertiliser products into different compositions suitable for agricultural use in Ireland. Therefore, indigenous fertiliser companies are dependent on global supply and demand and subject to exchange rate fluctuations.

It is clear that there has been a sharp increase in fertiliser prices over the past year, particularly in recent months. The Senator may be aware of the global supply and demand issues. There are several factors, but the driving forces are the increased demand for fertilisers, rising production costs and certain supply chain issues. An exacerbating factor is the increased demand for fertiliser from large grain-producing countries, which is being fuelled by strong global grain markets. This increased global demand has impacted on supplies and added to upward pressure on prices. Gas is a key input in nitrogen fertiliser production and the increase in its price is contributing further to the upward trend. With the current high cost of natural gas, some nitrogen producers are scaling back production or halting operations. Therefore, it is clear that there has been a confluence of issues over the past 12 months or so, all of which have had an upward effect on global fertiliser prices. I assume that this is the case across a range of industries. Demand decreased a little during the pandemic but has now bounced back everywhere, causing a large number of supply issues and, therefore, price issues. This is having an effect on a wide range of sectors, including farming, as the Senator rightly described.

The Minister for Agriculture, Food and the Marine, Deputy McConalogue, tells me that there are a number of initiatives under way to support farmers in reducing their dependence on fertiliser use. I understand that he is at COP26 today. His attendance there is important in terms of representing the country and, in particular, agriculture. The Minister has asked Teagasc to put forward a roadmap for farmers to reduce the use of chemical fertilisers. This will assist farmers in responding to the climate challenge of reducing the environmental footprint of the agriculture sector. It also makes sense.

The recent budget announced a new €1 million initiative to support the planting of multispecies swards in order to reduce dependence on fertilisers. There is considerable science around this area. For example, some research is being done in my constituency. This scheme will support farmers in using multispecies grass when reseeding. It will mean a mixture of complementary species being sown, including clover, which will enable farmers to reduce their use of nitrogen.

The Minister has also announced a pilot soil sampling programme. This substantial programme is aimed at putting soil carbon, soil health and fertility at the centre of our moves to increase sustainability. Our soils will play an important role in meeting our water, air, climate and biodiversity targets under CAP and the green deal.The sampling programme will provide the farmer with the critical information to make farm management decisions, such as improving nutrient use efficiency and soil carbon levels in our soils. Advisers will be upskilled to help farmers in translating the results of the programme into meaningful guidance. In this way, the pilot programme will realise the potential of managing soils on Irish farms. The Senator will also be aware that the European Commission has been working on a toolbox of measures to deal with rising energy prices. If that is successful, it will have a beneficial knock-on effect on fertiliser prices.