Icsa submission on 2020 Strategy March 2010 Further Details

Table 10.2 FFI/ Hectare- All Farms (Teagasc National Farm Survey)

	2004	2006	2008
FFI/Ha	€	€	€
Dairy	837	814	961
Suckler	271	300	260
Beef fattening	292	379	361
Sheep	286	353	281
Tillage	409	506	335

Since 1983, the possibility of development has been completely hamstrung by milk quotas but the likely abolition of quotas in 2015, preceded by the increasing trend of Europe being under quota provides new opportunities.

ICSA believes that it is critical that we prepare for quota abolition and that we see it as an opportunity rather than a threat. We need to encourage the optimum number of new entrants and milk quota policy in the coming years must reflect this priority. ICSA has strongly favoured the recent policy of setting aside some quota for new entrants, where the strategy has been to make realistic allocations, which gives qualifying applicants a good start in terms of quota. The old policies of giving a little to everyone are not appropriate. Instead, all allocations of quota and milk restructuring must serve the greater goal of optimising the number of farmers who will be able to take advantage of milk quota abolition in 2015. Spin-off opportunities for other farmers in contract rearing replacement heifers could be developed.
Ireland has the competitive advantage to be the most efficient dairy farming country in Europe. For many years now, the most successful farming nations have been the countries where dairy farming has been central- New Zealand, Holland, Denmark, California. In Ireland, we are ahead of the rest in Europe in terms of developing long grazing season, low input dairying systems.
Moreover, it is the only enterprise that can provide a realistic career path for young trained farmers. In recent years, the lack of opportunity in Irish dairying has seen some young farmers emigrate to countries such as New Zealand where they have gained invaluable experience.
Of equal importance is the fact that Irish based food companies such as Kerry, Glanbia, Lakelands, Dairygold, Glenisk are strong, consumer focused businesses that have the infrastructure to utilise increased dairy production. Unlike beef, brands such as Kerrygold, Glenisk, Baileys, and many artisan and niche products in the cheese, yogurt, ice cream and confectionary sectors give us a marketing advantage. The support infrastructure is the Dairy Board.

Recommendations:

• 
  The 2020 strategy should envisage a significant expansion in dairying, which, despite the disastrous collapse in 2009, offers the long-term possibility of profit over and above the level of direct payments.
  
• 
  Ireland should further target policies to establish new entrants in the run-up to 2015. Young farmers need the opportunity to develop a strong quota base now in order to be geared up for 2015.
  
• 
  At the same time, market management measures have to be part of the post quota environment but these should not take the form of a rigid quota system. The current system based on a reference year of 1983 is no longer appropriate.
  

11. Can We Do Better in Livestock?

Cattle & Sheep Trade

We have already discussed low product prices in the context of the need for better marketing strategy. While this submission argues for a radical overhaul of marketing strategy for exports of key products like beef and lamb, there are other issues that need to be resolved.

For suckler farmers, the only incentive to stay in production is the availability of live exports. Live exports are also taking large numbers of dairy bred calves and a significant level of heavy and forward cattle are now being exported to the North and the UK. The first quarter of 2010 has seen a 50% increase in numbers and if trends continue, we could see upwards of 450,000 cattle exported live in 2010.
However, for suckler farmers, the disappointment is that the live export trade needs Irish beef finishers to be able to compete more aggressively for top quality stock. The introduction of a quality price grid will not change much given that U grade cattle are currently making nowhere near a realistic price to cover the costs of production and, moreover, the fact that the purchase of top quality weanlings is only realistic in the context of a bull beef system. Bull beef is not included in the new QPS, which is a major weakness. Beef finishing is in serious difficulty, particularly winter finishing. Without a radical re-think on beef price by processors, the QPS will be seen as a badly missed opportunity.
Sheep farmers have started 2010 with a sense of hope arising from much higher prices. It is interesting to see spring lamb making over €6/kg in the middle of the deepest recession in memory. Only a few years ago, during the boom years, sheep farmers were constantly told that sheep meat was too dear and its price was impacting heavily on consumption.
For both cattle and sheep farmers, there are gains to be made from increased efficiency, primarily through increased output and reduced costs. Teagasc eProfit monitor is a very useful tool for benchmarking and it shows the variation in profit from farm to farm on a per ha basis. Unfortunately, all but the very top farmers are actually losing money from their enterprises when premia are excluded. The Teagasc Better Farm programme is also a very useful strategy to establish the key management actions in real live farm situations that define the level of profitability or otherwise. This work must continue to be supported.
Recommendations:

• 
  Live exports are vital for the cattle trade. The 2020 strategy must acknowledge that live exports are absolutely essential and no government policy or action should set any artificial limits on live exports.
  
• 
  The QPS system will not work without a viable base price and there is an urgent need for a quality-pricing framework for bulls.
  
• 
  Fatstock sales should be encouraged more to provide an alternative option for finished cattle, and to encourage more competition.
  
• 
  Farmers should have access to an independent appeals system on factory grades, which will necessitate the re-deployment of Department staff.
  
• 
  Increased technical efficiencies on farms can be achieved and the use of eProfit monitor and the Teagasc Better farm initiative are key tools which must be expanded to reach more farmers. Teagasc is facing a tighter budgetary environment but these initiatives must be prioritised.
  
• 
  We need to ensure that there is no collusion or price fixing at processor level and that competition for livestock is upheld.
  

Animal Health

Animal Health is a critical part of the strategy for agriculture for the next decade. It is important because it impacts on the profitability of farm production but it is also vital in terms of being able to market food products.

Whereas the animal health strategy has been characterised by fire-brigade responses to animal health crises, we now need to build on work to move on to a more proactive and preventative strategy. ICSA supports the establishment of AHI and believes that its work will be a critical element in the long-term strategy.
The overall theme of this submission is that we must secure as many varied outlets as possible for our livestock sector, both for live exports and meat exports. It is therefore critical that we have the highest possible herd health status. Individual farms need to be recognised and certified for their achievements in terms of herd health so as to facilitate the export of cattle, not just for further feeding but also those farms who wish to take advantage of opportunities to sell high value pedigree breeding stock outside of the island.
We also need to remain cognisant of food safety risks linked to livestock production systems. Mastitis remains a problem which can have knock on consequences to dairy products in multiple ways. A variety of bugs that affect livestock, ranging from e-coli to staph aureus have significant implications for human health. It is vital that the Irish livestock sector is facilitated and supported in tackling all such diseases.
Therefore, the work of AHI will be pivotal for the coming decade in order that we have the highest possible herd health status and that where problems occur, we are already ahead of the curve in terms of solutions.
Bovine TB remains a blight on the Irish farming sector. We need to actively pursue new techniques in identifying and combating this disease. Brucellosis eradication has been a success story, but we need to co-operate closely with the Northern Ireland authorities to ensure that the gains are copper-fastened.

Recommendations:

• 
  AHI should be amalgamated with a similar body in Northern Ireland in order to achieve synergies of effort and cost efficiencies.
  
• 
  TB eradication should be prioritised in tandem with DARNI’s efforts. Alternatives to the skin TB test should be readily considered and the badger issue must form part of the overall solution. While blood testing is emerging as a possible alternative to the TB test, ideally we might move towards multi-process blood testing which gives farmers a read on not just TB but also other diseases.
  
• 
  On BVD, consideration should be given to financially supporting a full national test for PI animals in breeding herds. This would be on once-off basis to ensure that all farmers were made fully conscious of the impact of this disease and to engender the habit of rooting out PI animals, in order to ensure that vaccination programmes were correctly targeted.
  

13. Mol an óige
There is need for a fundamental change in outlook regarding young farmers- particularly in the context of the sudden loss of employment in the Irish economy, increased numbers in agricultural education and the need to improve age structure in farming.
Recommendations:

• 
  The decision to close Installation Aid is a retrograde step and should be reversed.
  
• 
  Milk quota policy must be designed with a view to quota abolition in 2015. New entrants into dairying are essential. (see section on dairying)
  
• 
  CAP reform will have to make provision for qualified new entrants.
  

Section E: And the Overall Objective is…

14. 
    Viable Farm Incomes
    

All of the specific components of the agri-food strategy must be designed with the over-riding objective of delivering viable farm incomes to the optimum number of farmers.

It is also critical that the 2020 strategy sees the agri-food sector re-located as an integral and vital part of the national plan for economic recovery. It must emphasise ways in which it can complement strategies and actions in other sectors, such as tourism and energy, especially in the context of the green collar economy and against the urgent need to generate foreign earnings.
By 2020, the agri-food sector should be held up as an example of how a country can re-vitalise itself following a severe economic depression. The Celtic Tiger years saw the sector perceived as a sunset industry but the reputational damage done to our country by an over-dependence on a construction boom and a laxly regulated financial sector simply serves to highlight the folly of not putting more emphasis on the potential of agri-food.
Food security, environment and global population growth as well as a renewed emphasis on competitiveness in the economy are all strong reasons why the future can be good for this sector. Ultimately, however, none of these will be the final arbiter of success in terms of this strategy- that will be measured by the level of improvement by 2020 on the average farm income for full time farms compared with the figure of €16,993 from the last National Farm Survey (2008).

1 (Agra Europe, Representative prices 14/3/10. Ireland: €2.85 c/kg, EU-27 €3.18 c/kg).