‘Crop insurance needs to be examined if tillage farming is to continue in Ireland’ – report
The merits of crop insurance need to be examined if tillage farming is to continue in Ireland, according to a new report.
The Joint Committee on Agriculture, Food and the Marine published the report on the ‘Future of the Tillage Sector in Ireland’ this morning, after carrying out a number of consultation meetings with various stakeholders earlier this year.
One of the key recommendations from the report is the need for the Department of Agriculture, Food and the Marine to analyse potential for agricultural insurance schemes as operated in other countries.
The committee also requested that the analysis results be sent back to the committee along with the department’s views on the potential for agricultural insurance schemes, in the context of a new Common Agricultural Policy (CAP).
The report states: “Farming is generally understood to be a risky business; however, tillage farming is particularly risky given the impact of weather conditions upon their output. In a worst-case scenario a crop may prove beyond salvage, representing a total loss.
“While such risk exists in other types of farming, it tends to be less likely to occur. Disease and pests further complicate matters for tillage farmers having additional negative impacts on profitability in the sector. It is necessary to maximise profitability in order to protect tillage farmers for years where yields are lower or less valuable.
Tillage farmers are significantly restricted by the calendar. While other farmers may have some freedom to wait for prices to improve, tillage farmers must harvest, and sell their produce within narrow windows.
“This exposes them to the unpredictability of both the climate and the market; and therefore a high risk of substantial financial loss,” it added.
The magnitude of risk inherent in the sector proves that it will be necessary that crop insurance, in whatever form, be examined if tillage farming is to continue in Ireland, the report explained. But the report doesn’t single out what form such insurance could take.
The report continued: “Diversification should reduce the risk inherent in tillage farming, although diversification alone cannot resolve this problem.
The risk of tillage farming cannot always be borne by government, the EU, or the taxpayer. Ultimately the risk taker must be responsible.
“This is not currently possible; tillage incomes are too low to expect farmers to undertake additional expenditure.
“It is essential that policies strive to transition the tillage sector to a position of health, at which point, it can reasonably be expected that farmers would be responsible for protecting their own incomes.”
Tillage sector in Ireland
According to the report, the tillage sector in Ireland is viable and has the potential to maintain its current size. However, it also has the potential to expand if supports, policy direction, and innovation are appropriately directed, the report added.
It is not a question of simply investing or providing financial support to the sector, rather, the sector as a whole must be structured and given direction to drive its own expansion.
Research shows that as of 2016, the average tillage farm income has reached approximately €30,840. Last year, tillage was the second most profitable farm type with the exception of dairy.
At present there is a total of 7,387 tillage farms in the country. The tillage sector in Ireland is reasonably small, falling beneath 300,000ha in recent years, representing some 9% of the area farmed in Ireland, the report explained.
Figures indicate that the tillage area has decreased by 14.3% in the last five years and has contracted at a rate of 3% per annum for the past four years.
It is thought that 23.4% of Irish agricultural soils are deemed very suitable for tillage; 11.7% are deemed moderately suitable. Most land deemed highly suitable for tillage is found in the south and south-east of the country, with the vast majority of land deemed suitable for tillage found in the midlands.
The prospects for the tillage sector in Ireland may be reasonably positive if the sector is managed appropriately in the coming years, according to the report.
Demand for tillage produce will increase in the coming decades; provided that extremes of weather do not become the norm, Irish tillage farmers may well find the coming decades particularly profitable.
Scientific advances, alongside swift and appropriate uptake, will also have possibly significant impacts on the future of the Irish tillage sector, the report added.