Timmy Dooley (Fianna Fail)
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I welcome the Minister, Deputy McConalogue, to the House. It is an indication of his commitment to this issue, that he has taken time out to be with us.

As the Minister is well aware, there is considerable concern in the dairy farming sector at the looming crisis that will be caused if the nitrates derogation cannot be maintained at its current level. On Monday, I had the opportunity, at the invitation of the Irish Farmers Association to visit Adrian Brooks. He is a young farmer who is known to me for many years and I can see the work that he has done. Mr. Brooks was joined by a number of other dairy farmers, namely, Kieran Woods, Micheál O'Dwyer, Kieran O'Connell, Tommy Lane, Andrew Dundas and Caroline Enright. They all share the same worries and concerns, in that any changes to the derogation will have a significant impact on their livelihoods. The notion that any reduction in the 250 kg of organic nitrates towards 220 kg, or below, would have a detrimental impact on their livelihoods.

Mr. Brooks and his colleagues are typical in that they are young, prosperous, well-intentioned farmers who have built a sustainable livelihood for themselves and their families on the farm. They have invested heavily and made these farms viable. They are not in the super league, or anywhere like it. Average farm sizes in County Clare are significantly smaller than in other parts of the country, but a number of these farms are intensive and every perch of ground is utilised to the benefit and profitability of the enterprise. This intensive approach has made these farms viable, let us be honest about it. The approach has allowed the farmers to have full-time jobs on the farm and create employment for others.

The banding approach, of which the Minister is aware, has already had a serious impact on stocking rates. Thus, any changes to the derogation towards 220 kg or below will undoubtedly require farmers to reduce cow numbers further, with a knock-on effect on viability. Reducing the number in a herd of cows in County Clare from 100 to 90 or 85, throws the farm into being non-viable. If one takes 100 cows out of a 1,000-cow herd, the operation is still viable.You may have to reduce some activities, but farms taking out nine or ten cows will have a detrimental impact, and it will be the difference between full-time and part-time farming. Having encouraged these young farmers to take over their family farms, to make them more productive than in the past, to invest significant amounts of borrowed money and to develop their enterprise, we cannot have a situation where we now allow the rug to be pulled from under them on the basis that there is not really an alternative. We have to find an alternative. There is a significant knock-on effect on other enterprises, as the Minister knows.

The interim review will be based on comparing water quality between 2021 and 2022. This is flawed, because some of the measures coming into place in 2022 and 2023 will have had no chance to improve water quality. The reduction in the nitrate derogation to 220 will have significant economic impact and could potentially remove between €225 million and €230 million from the rural community. The prospect of reducing the maximum stocking density to 2022 is already having a knock-on effect and consequences on all farming sectors. It is increasing the demand for land and leading to significant increases in land prices. That is having a disproportionate impact, particularly in County Clare, where it is forcing up the price of land and making it less available to other enterprises, whether to sheep, to the suckler herd, which is an important area in County Clare, or to the beef sector. Even though the proposals have not yet been put in place, or have not yet been agreed, they are really destabilising the future of farming in the county I know best, and I am sure in many other counties.

Charlie McConalogue (Donegal, Fianna Fail)
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I thank Senator Dooley for raising this matter. It reflects his commitment to representing the agriculture sector across County Clare. I begin by saying that I fully recognise the importance to the rural economy of maintaining Ireland’s nitrates derogation. I am committed to seeking to maintain it in the longer term. We want the derogation to be maintained and continued. As the Senator pointed out, it helps to support productive family farms and support the rural economy. To do this and maintain it, we must all act together, in particular on the objective of improving our water quality.

As required by the nitrates directive, a nitrates derogation may only be granted if it will not compromise achievement of the directive’s two objectives, namely, to reduce and to prevent water pollution caused by agriculture. It is, therefore, a derogation from some of the requirements of the nitrates directive but not its objectives and is based on specific criteria.

In March 2022, the Government secured a new nitrates derogation for Ireland covering the period 2022 to 2025. We negotiated the extension to the derogation in 2021 and early 2022. In considering the outcome, we must be conscious of the background to those negotiations. The previous extension was negotiated in 2017. Over the four-year period from 2017 to 2021 in Ireland the dairy herd expanded by more than 300,000 head. An average additional 30,000 tonnes of nitrogen were being used nationally per year. Water quality also declined in certain areas, particularly in the south and south east.

Given this background, the European Commission insisted on attaching increased conditionality to Ireland’s nitrates derogation. This included conditionality around water quality trends. The water quality review required by the Commission will take place in the coming months based on Environmental Protection Agency data. Depending on the outcome of that review, it is possible under the derogation we negotiated, and to which we had to agree, that at least some of the country will have to move to the lower maximum stocking limit of 220 kg of organic nitrogen per hectare.

The quality of water in any catchment reflects the cumulative impacts of all pressures on water quality in that catchment. Agriculture’s impact is determined by the cumulative impact of all farmers' actions. As a result, we must all work together across the entire agrifood sector to improve Irish water quality to secure the possibility of retaining our nitrates derogation in the long term.

There are three ways we are working to achieve this. The first way is by regulation through the current nitrates regulations. Under the recent review we have asked farmers to do significantly more, including reducing nitrogen limits by 10% for most farmers, extending the periods when fertiliser and manure cannot be spread, increased use of low emissions slurry spreading technology and requiring better management of nutrients on the farm among other actions.

The second way is by supporting farmers through measures included under the agri-climate rural environment scheme, ACRES, within the CAP strategic plan. In this regard, I was delighted to accept all 46,000 farmers into ACRES recently. The targeted agricultural modernisation scheme, TAMS, will also support on-farm capital investment in storage and provide accelerated capital allowances for investments in slurry storage facilities to be written off over the coming three years.

Finally, we will achieve this by working in collaboration with industry and initiatives such as the dairy co-ops sustainability schemes. In this regard, I acknowledge the support that the dairy processing industry is providing for the agricultural sustainability support and advisory programme, ASSAP. It is a brilliant and free advisory service to help farmers in selected catchments to improve water quality. From the original base of ten industry-funded advisers at the start of the programme, there are now 23 advisers working on the programme employed by the dairy co-ops, alongside 20 supported by the State.

At the moment only Ireland, Denmark, the Flanders region of Belgium, and the Netherlands have a nitrates derogation. The Netherlands derogation is being phased out. It will not be granted a derogation after 2025. At the end of last year, the derogation for the Flanders region expired. It has not yet sought an extension. Denmark’s current derogation expires in 2024. Based on our unique soils, land use and farming systems within Europe we can, and we will, seek to justify our nitrates derogation. However, we must at the same time deliver on our commitments in terms of water quality improvements. I believe we can achieve this.

I am strongly committed to working with farmers and industry, both in delivery of our water quality objectives and maintaining the derogation in the longer term. I want the derogation to work for farmers and our environment in the short term as well as the long term.

Timmy Dooley (Fianna Fail)
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I assure the Minister the farmers I know best want to work with him. They want to work in a sustainable and environmentally-friendly way. They too want to ensure our water courses are protected. It is in their interest. What they do not want to happen is to see themselves penalised for the activity of sectors outside of the agri-sector. We will have to find a better way to manage and monitor what happens on-farm rather than trying to do it on a regional or a national basis. Other industries have a negative impact on water, whether it be the forestry sector or other areas. There is no guarantee that a reduction in the maximum stocking density to 220 will improve water quality. Farmers will continue to adopt measures that protect water quality. However, this must not be based on the blanket regulatory approach but on the right measures in the right place at the right time principle, which has been shown to deliver improvements in water quality. Farmers are up for it. They have shown their commitment in the past. They need the commitment shown today by the Minister to continue, as I know it will, based on my knowledge of how he does business. We need to take that fight to Brussels and bring home the bacon.

Charlie McConalogue (Donegal, Fianna Fail)
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I thank the Senator for raising this today. I acknowledge the concern among many farmers, particularly those who are more highly stocked. There is a particular concern among medium and small farmers on the impact any change from 250 to 220 would have on them. We had to agree to the mid-term review, and to the fact that 250 could be reduced to 220 in certain catchments if water quality was not improving. I am preparing a case to engage further with the European Commission to see if we can get further flexibility around time to show improvements in water quality. There is no guarantee there will be any change in that. As it stands, the situation is that it could drop to 220 in certain catchments if water trends do not improve.

However, as the Senator said, farmers are taking steps to improve water quality. I am aware of the challenge this could pose to some farmers from the point of view of economic viability. I am engaging with the European Commission to seek further flexibility. There is no doubt of the backdrop here. We have to improve water quality. That is a must. It is also a must, not just from the environmental perspective, but if we are to continue having a nitrates derogation after 2025. I have laid out a situation where by 2025 we may be the only member state that has a derogation. It will become increasingly challenging as a result. It is certainly not something we can by any means take as a given.It is something we will have to prove the case for and we will have to get the consent of other member states to be able to maintain that derogation after 2025.