Kevin Humphreys (Dublin South East, Labour)
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To ask the Minister for Agriculture, Food and the Marine his views regarding the impact that the end of the milk quota system in 2014 may have on Ireland's climate policy should the dairy industry expand significantly and the follow on effect of an increase in emissions; the studies being undertaken in his Department to examine same; if he will be making an input into the forthcoming Climate Change Bill; and if he will make a statement on the matter. [47408/12]

Simon Coveney (Cork South Central, Fine Gael)
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Both the Irish dairy sector and market analysts have regarded the milk quota regime as a brake on the potential of the Irish dairy sector to respond positively to opportunities in the market.

With the abolition of milk quotas on the 1st of April 2015, I expect the Irish dairy sector to expand significantly in the years ahead, with output driven by global demand and with significant potential for associated job creation. The Food Harvest 2020 (FH2020) report set out an ambitious target for a 50% increase in milk production by 2020, compared to a 2007-2009 reference period.

The roots of this potential for increased production lie in the unrivalled natural advantage Ireland possesses in the form of a grass-based production system. This allows us to produce dairy products of the highest quality in an environmentally friendly manner and on a highly cost efficient basis, to meet global demand which is growing as a result of increasing population and purchasing power in developing economies.

The low carbon intensity of the Irish dairy sector is recognised by a number of important international reports which show Ireland to be among the most carbon efficient food producers in the world.

In 2011, an EU Commission Joint Research Centre study found Irish milk, pork and poultry products to have the lowest carbon footprint in the EU on a per unit of production basis. By factoring in future cost beneficial mitigation measures relative to increased production, the projected rise in agricultural output will represent a further improvement in the already efficient carbon intensity of agricultural production on a per unit basis.

In addition, a 2010 FAO report indicates that the grass based livestock production systems that form the cornerstone of Irish agriculture are already highly carbon-efficient and are associated with a low carbon footprint for livestock produce.

In April 2012, as part of the National Climate Policy Development Consultation, Teagasc published its Marginal Abatement Cost Curve for Irish Agriculture analysis. The report was prepared by Teagasc’s working group on greenhouse gas emissions which integrates the extensive and diverse range of organisational expertise in research and practice associated with greenhouse gases. The analysis was conducted within the context of FH2020, which assumes that the 50% growth in the dairy sector will be achieved by a combination of 25% growth in cow numbers and 25% increase in yield.

Without mitigation, under a FH2020 scenario, the historical downward trend in agricultural greehhouse gas emissions is projected to reverse due to the growth in economic activity in this sector. In the absence of abatement measures, this report estimates that, by 2020, emissions are projected to increase by approximately 7% compared to the 2010 level. This increase is not substantial in comparison to the projected rise in agricultural output, due to ongoing gains in production efficiency and reductions in the carbon-footprint (greenhouse gas emissions per unit produced) of agricultural produce. Therefore, these figures would still represent a further improvement in the already efficient carbon intensity of Irish agricultural production.

However, it is estimated that mitigation measures have the potential to achieve reductions in reported agricultural emissions of 5.5% relative to the FH2020 reference scenario in 2020. Notwithstanding the planned increase in production, this would represent a 4.5% reduction compared to the reported agricultural emissions in 2005, which is the EU Effort Sharing reference year. These measures would include activities such as extended grazing, improved breeding index and efficient use of nitrogen.

It is important to note that a Marginal Abatement Cost Curve cannot remain static, nor should it be interpreted as definitive. This is because the potential for greenhouse gas abatement, as well as the associated costs and benefits, are likely to change over time as ongoing research programmes deliver new mitigation measures, or as socio-economic or agronomic conditions evolve. Therefore, the Teagasc report should be interpreted as the first outcome of an iterative process. Developments in the science of greenhouse gas abatement and in the market conditions faced by Irish agriculture will continue to shape analysis into the future.

In this context the Department will continue to support research and innovation to underpin the sustainable growth of the agri-food sector. The Greenhouse Gas Initiative for Ireland, a research network funded recently under my Department’s Stimulus Programme, is particularly relevant in this regard.

In November 2011 my Department also invited proposals from independent external consultants to undertake an analysis and report on the likely environmental impacts of the achievement of the Food Harvest 2020 targets. Consultants were appointed in April 2012 and a final report is expected in early 2013. The possible impact on greenhouse gas levels is one of the areas under examination as part of the analysis.

As regards the forthcoming Climate Change Bill I will, of course, be working closely with my colleague Minister Hogan and others in formulating this important legislation, taking into account all of the available data.