Economic report on potential impact of derogation loss 'frightening'
The findings of a report on the potential economic impact of the loss of the nitrates derogation on Ireland's dairy sector are "frightening".
That is the view of Irish Farmers' Association (IFA) Dairy Committee chair Martin McElearney who was reacting to research carried out by Teagasc.
A set of research papers on the Nitrates Action Programme (NAP) were presented this week to Minister for Agriculture, Food and the Marine Martin Heydon.
Around 49% of dairy farms in Ireland and 65% of national milk production is produced on farms with an organic nitrogen (N) stocking rate of greater than 170kgN/ha.
If these 7,609 farms were required to reduced N stocking rates down to 170kg/ha, Teagasc said this would require an average reduction of 27 cows/herd.
It would also result in a reduction (on average) of €43,555 in family farm income on those farms, if this was achieved by reducing cow numbers only.
This would result nationally in a reduction of 203,719 cows (14%) and a reduction in national milk production of 1.2 billion litres (15%).
IFA Dairy chair Martin McElearney said the report outlines the "reality of how important the derogation is to dairy farmers and the wider rural economy".
"The findings make for stark reading and are similar to the results of an economic impact analysis carried out by IFA.
"Farmers would be facing a potential 39% cut in family farm income should we lose the derogation, which would devastate the 7,600 farm families depending on it.
"No business can sustain a cut of that size in income. In reality, it would force many of these farmers out of business,” he said.
McElearney added that the numbers in this Teagasc report "only relate to the dairy sector, but the loss of the derogation would have huge knock-on implications for the wider economy".
"A 1.2 billion litre cut in milk supply would result in a reduction in dairy exports of about €1 billion per annum.
"The obvious consequences would be job losses at processing level and also in other businesses which depend on dairy farmers for their living such as agri contractors, vets, merchants and others,” he said.
The report also stated that if all those dairy farmers in derogation sought to rent additional land to retain their current cow numbers, they would require an extra 113,000ha, approximately the size of Co Kildare.
The IFA Dairy chair said this would have "massive repercussions for the land market which would impact all sectors indirectly".
“The latest EPA results show that farmers have delivered on their side of the bargain by improving water quality.
"It’s now time for the minister and the department to deliver on their side by securing another derogation that is workable for farmers.
"Otherwise, as the report shows, we are facing an economic catastrophe for the sector,” McElearney warned.
