The report this week from the Environmental Protection Agency (EPA) into urban wastewater treatment has "made for very grim reading", the Irish Creamery Milk Suppliers Association (ICMSA) has said.

Denis Drennan, the association's president said that farmers and the wider dairy sector who are "waiting on tenterhooks" for a decision on Ireland retaining the nitrates derogation will have read the report in "stunned astonishment".

The report from the EPA found that 59% of Ireland's urban wastewater treatment plants failed to consistently meet standards set out in their licences for water discharge.

The report said that while investment at priority areas is delivering some improvements on raw sewage discharge, these discharges continue to harm water quality in rivers, estuaries, lakes and coastal waters.

Drennan said that farmers are "entitled to ask why [Uisce Éireann] seems to be exempt from the very onerous requirements that other state agencies are happy to apply to private individuals, companies or farmers deemed to have infringed the relevant regulations".

"We have the various agencies of the Irish State fining farmers and others while a different agency of the Irish State is directly responsible for massive amounts of inadequately treated discharges - including instances of raw sewage - flowing into rivers and onto beaches," he said.

The ICMSA president said that the decision on the extension of the nitrates derogation is the most important issue for Irish farming, and that "every reputable impartial observer acknowledged" that progress was being made on the levels of nitrogen ending up in water.

"There's no point in the state holding a whip over the heads of the farmers while the state itself is busily discharging sub-standard water into rivers and then testing those rivers and announcing declining water quality and the need for restrictions on farmers," Drennan said.

"And we can’t have two timelines for upgrades and modernisation with the farmers obliged to do it immediately while the State decides that the State can take their sweet time about carrying through the upgrades and observing the regulations that the same State is insisting that we farmers must observe.

"There’s an obvious and disqualifying contradiction here that we’ve pointed out before and it’s one that regardless of the decision on a Nitrates extension is going to have to be addressed by the State agencies involved and brought to some kind of coherence and consistency," Drennan added.