The reduction to a maximum stocking rate of 220kg of organic nitrogen (N) per hectare will cost the agriculture sector up to €60 million per annum, an Oireachtas committee has heard.
This is according to an analysis by the Irish Farmers’ Association, whose president Francie Gorman is addressing a meeting of the Joint Committee on Agriculture, Food and the Marine this evening (Wednesday, February 14).
If Ireland’s derogation was to be entirely removed, the IFA estimates that the income of impacted dairy farmers would be reduced by an average of up to €23,000 annually.
This would be a “huge drop” from the average dairy family farm income of the last five years at about €87,000 annually, he said outlining the anticipated economic effects of the cut to 220kg N/ha.
Today’s meeting is the first in a series of committee meetings on Ireland’s nitrates derogation, after which the committee will compile a report and send it to the European Commission.
Economic effects of derogation cut
The IFA also estimates that a loss of the derogation could result in over 1,100 job losses and a potential economic impact of over €1 billion annually, considering all direct and indirect factors.
Gorman said that any changes to the derogation affect all land-based sectors due to its impact on the land market. He added that approximately 850,000ha of land is rented or leased in Ireland.
An average increase of €100/ha, or €40/acre, in land rental is an added cost of about €100 million annually to the Irish farming sector, the IFA president told the committee.
While an estimated 3,000 farmers are directly affected by the cut to 220kg N/ha, further 7,000 farmers are estimated to be directly impacted if stocking rates were capped at 170kg N/ha, he said.
The IFA estimates that about 55% of milk supplied comes from farms stocked above 170kg N/ha, and said that if these farms had to reduce output, this would result in higher costs and job losses at processing level.
Gorman said the removal of the derogation would result in dairy farmers requiring about 86,000ha just to maintain their current dairy cow numbers, which is about “1.2 times the size” of Co. Carlow.
This additional land requirement is “not factored into” Ireland’s Climate Action Plan targets, which include targets to increase the area under organic farming and tillage, Gorman added.
He said it is critical that Ireland makes a submission to the European Commission’s public consultation on the Nitrates Directive, stressing the “critical importance” of the derogation to Ireland.
“Removing the derogation will not automatically result in improvements in water quality, but the economic damage it will do is guaranteed,” the IFA president told the committee.