More loss-making drystock enterprises should be switching to forestry, according to Professor Alan Matthews, Professor Emeritus of European Agricultural Policy at Trinity College.
Speaking at a recent conference, organised by the Institute of International and European Affairs, Matthews said subsidies are underpinning production in the beef sector.
Citing Teagasc figures, he said the only reason these farmers can continue in the sector is the direct payment.
“Subsidies are maintaining a sector which if you added in the additional costs of the greenhouse gas emissions would have net margins even more negative.”
According to Matthews, there would be a positive return if farmers switched land out of drystock and other agricultural enterprises and into forestry.
Yet, despite this, he says forestry plantings are falling.
“The fact of the matter is we are not seeing the afforestation rates which are necessary to help us meet our emissions targets.
“That’s not because forestry doesn’t receive significant subsidies, he said
According to Matthews, it is because forestry has to compete against the competition for that land use namely the drystock sector which is not being fully charged the full cost of its production including the cost of greenhouse gas emissions.
“Any sector if it has an external cost, those costs should be taken into account in the decisions whether to stay in or increase output in that sector.
“The livestock sector is not facing those charges,” he said.
Matthews said that this is going to make meeting our target more difficult and costly.
He said this is because it will either put a greater pressure on other sectors such as transport and home heating or we will have to go out and buy carbon credits at a cost to the state.
Alan Matthews is Professor Emeritus of European Agricultural Policy, a former Director of the Institute for International Integration Studies and former Head of the Department of Economics at Trinity College Dublin.