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In 2008, after 24 years of a rigid quota applying to EU dairy output, the Council of Agriculture Ministers took a major policy decision to abolish milk quotas. Dairying, with all the work done by Teagasc and others, was recognised as Ireland’s most competitive sector; but expansion for able, ambitious farmers had been extremely difficult due to the high price of buying or leasing quota – if it was available within the individual co-op area. When full notice was given that quotas would finally disappear in 2015, it was expected that there would be a surge in milk supply.
The Irish Farmers Journal, in line with its trust mandate to enhance the wellbeing of Irish agriculture, approached Glanbia. CEO John Moloney was on our board at the time, and it was decided to try and source a sizeable, suitable farm in either tillage or cattle production, to see if a new dairy unit could be established from scratch and pay back the development and associated costs using largely borrowed money.
Crucially, the Department of Agriculture bought into the concept and granted us a quota under a specific heading, five years before the formal abolition. A lease was entered into with a Kilkenny farming family for 15 years. As is too often the case in my view, the lease involved paying rent as well as the landowners retaining the full Single Farm Payment – but that’s by the way.
It has turned out to be a major learning exercise, with absolute transparency around all costs and returns with no sponsorship of inputs, facilities or credit terms.
Teagasc, the Department and farmers, both individually and organisationally, have been supportive of the concept. Although, not surprisingly, some would rather have greater investment in buildings and facilities from the beginning, but production has been good and cow health and mortality have been excellent when compared with national industry standards.
Of course, there have been ups and downs. The frost and snow last March tested the system, but a full external enquiry fully exonerated all involved, though financially, the summer drought on the fully stocked farm was much more serious. Reserves built up over the eight preceding years had been depleted and it was a valuable learning lesson. We looked forward to working out the remaining five years of the lease, rebuilding reserves and handing the farm back thriving.
End of a partnership
It was with a sense of real disappointment that as chair of The Agricultural Trust, the owner of the Irish Farmers Journal, I was asked to meet the chair and secretary of Glanbia on Holy Thursday morning to be told that the family wanted their farm back and Glanbia was going to exercise its right to wind up the lease.
Legally we are looking at all the options, but personally I find it worrying that a partner with whom one has worked alongside for 10 years would, without any room for discussion or negotiation, terminate a full lease arrangement that had five years left. I don’t know whether the Department, Teagasc or other participants in the project feel as let down as we in the Irish Farmers Journal do.
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