Tuesday, 2 November 2021
Nithe i dtosach suíonna - Commencement Matters
I welcome the Minister of State to the Chamber and thank him for taking this Commencement matter. Agriculture has been in the news for the past number of days, or even weeks at this stage. I welcome the climate change COP26 meeting that is taking place in Glasgow, Scotland. I know the Minister of State at the Department of Agriculture, Food and the Marine, Deputy Martin Heydon, is there today.
There has also been talk in recent weeks about the ongoing CAP negotiations. In fairness, I acknowledge that the Minister, Deputy McConalogue, was in Tipperary last week and spent four hours talking to farmers at Thurles mart. They do not agree with everything he says, but they cannot say he does not give them time. He has been doing that throughout the country and I acknowledge that engagement. The CAP negotiations are hugely important. For a county like mine, Tipperary, it is about how we can support productive farmers. I have said to the Minister that one thing we can do on that is to have more variety in the eco-schemes for productive farmers. In respect of tillage, for example, the only eco-scheme it is possible to go into is one on fertiliser spreaders.
The matter I raise today concerns costs for farmers, which are rising in a range of areas, including wood, steel, oil and diesel. The cost of diesel has gone up dramatically. Everyone speaks about it in terms of their daily lives but, for farmers, there is no alternative to diesel. We do not have an electric combine harvester as an alternative. While we acknowledge carbon budgets and the need to shift our usage in areas of life, in farming there are certain areas where that is just not possible.
One of the biggest costs coming down the line for farmers, and in fairness Pat O'Toole in the Irish Farmers' Journal did a whole article on this last week, is that of fertiliser. In the space of 12 months, the cost of fertiliser has gone up threefold.We are tillage farmers at home. Buying calcium ammonium nitrate fertiliser in January cost €220 per tonne. We got a price this week of €650, and the expectation is that the price will go up before we need it in December and January. This is a massive issue for tillage and dairy farmers. The price of urea is €850 per tonne. These prices are not viable and will have a major impact on farmers. I know people who say that they will be forced into suckler farming because they cannot afford the price of fertiliser.
I ask that we as a Government recognise that farmers cannot put this cost on anyone else. They have to take the hit. They will be given a price for their material, be it grain, milk or whatever, so they cannot put the cost on anyone else. If any other business had its costs increase by threefold in less than a year, it would not be sustainable. I ask that the Government, in particular the Department of Agriculture, Food and the Marine, introduce a scheme to support the farming sector during this time. It will be a tough six months. Something like this has been done before. The Minister of State will remember the Beef Plan Movement in 2019 when the price of beef was very low. There were protests and long negotiations between the Government and all farming bodies before there was an agreement that the Government would support farmers through bonus payments if they worked with meat factories. As such, what I am asking for is not something that has not been done before. We need to support farmers during the coming months. I call on the Minister of State and his colleagues to do so.
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.
I thank the Minister of State for his response. He is right that there are a number of initiatives under way. The multispecies grass will make a difference and there will definitely be buy-in from farmers on this. Farmers recognise that they need to change many of their ways and they are totally in favour of that but what I am talking about needs to be done immediately. It will take time for some of these initiatives to come in and to get farmers on board. There will be an immediate crisis in the next four or five months, although farmers will not realise it fully until they go to buy fertiliser. We have given supports to businesses right across this country for the past 18 months, whether in the hospitality industry, sport, the entertainment sector or airlines. Every sector except farming has been given supports. Fertiliser costs have been indirectly affected by Covid. All I am asking is that we support farmers with this cost this year. No other sector would accept a threefold increase in costs. The Minister of State understands that from his county. Let us support farmers through this very difficult period.
I appreciate the Senator raising this issue. We hope that for fertiliser prices, as we hope for a range of commodity prices, there will be a levelling off of some of the contributing price factors next year. Huge challenges still remain. The initiatives the Minister for Agriculture, Food and the Marine has outlined will support farmers in reducing their overall dependence on fertiliser use.
The Senator mentioned multispecies grass swards. I fully agree with what he said about farmers being very interested in this. There is a research facility in my constituency, run by Devenish, and over 1,000 farmers have visited it to see the research that is ongoing on this matter. Not only will it make the soil more fertile but there is potential to trap carbon as well, which is something farmers would like to see because that is a challenge facing us all. The Minister and the Department, as well as the Ministers of State, Deputy Heydon and Senator Hackett, will continue to keep a very close eye on this situation and will listen carefully to the proposals the Senator has made.