Farmers fighting back – more than just an election slogan

Tim Cullinan took over as IFA president at the organisation’s 65th AGM this week. Despite the mushrooming of farm groups in recent years, the IFA, with over 72,000 members, continues to wield major political influence. A measure of this influence can be seen in the fact that the leaders of Fine Gael, Fianna Fáil and the Green Party addressed the AGM on Tuesday.

The value of this in ensuring farming issues remain centre stage should not be underestimated. All three leaders delivered strong performances but it was Micheál Martin who clearly had the deepest connection with the issues facing farmers. However, his party’s commitment to continue with convergence of farm payments will be of major concern to many.

Meanwhile, the move to limit any additional support payments for suckler farmers to the first 20 cows leaves Fianna Fáil accused of being more interested in a vote-grabbing policy rather than strategic vision for the sector.

While immediately on the back foot having to defend a €25m underspend in the Brexit Emergency Aid Measure (BEAM), An Taoiseach Leo Varadkar’s commitment to offset any cut in the CAP budget with national funding did win him support. It was also significant that he acknowledged the legitimacy of the IFA’s demand that the CAP budget needs to account for inflation.

In the case of the Green Party, leader Eamon Ryan put forward what can only be described as a utopian view of Irish agriculture – one where farmers would become more profitable by getting higher prices for producing less. Ryan accepted that in this utopian world, consumers would have to pay more for food. It raises the question if a vote for the Green Party is a vote for higher food prices? Trying to sell farmers a strategy for the future based simply on hope discredits the party’s policies, some of which are valid, such as the need to develop a national land-use policy.

On Brexit, Martin described Ireland as being “brutally exposed” while Varadkar referred to the impact of not negotiating a good deal with the UK as “catastrophic for rural Ireland”.

Protecting live exports, securing the nitrates derogation and preventing cuts to the national herd were all red-line issues

The Taoiseach went beyond the need for any EU-UK trading arrangement to simply secure tariff- and quota-free access. He highlighted the need for a deal that would prevent low-standard food flooding into the UK from non-EU countries. Achieving this would require the UK to insist on equivalent EU standards when negotiating deals with non-EU countries such as the US and Mercosur – a move that would help protect the value of the UK market for Irish exports.

Martin and Varadkar committed to providing the necessary support to protect farm incomes in the wake of a no-deal Brexit. But again the commitments were void of any financial detail or insight as to how such support mechanisms might be constructed. The positive soundings from both in relation to the provision of a BEAM 2 scheme must be taken with the usual election health warning. However, their commitments will provide a solid platform for the IFA to mount a second campaign for a Brexit fund to ensure farmers who slaughtered cattle since mid-May 2019 are supported. The IFA president made clear to all that the IFA had calculated the Brexit impact for this period to be €160m and warned that any future scheme must not have the same conditions as attached to the BEAM one.

There is no doubt that Varadkar, Martin and Ryan will be well aware that “putting the fight back into farming” was more than just an election slogan by the newly appointed IFA president. The Tipperary man is clearly not afraid of a fight, identifying an increase in the CAP budget to €2bn as one of his key focuses – in doing so going directly head on with the European Commission where a 5% budget cut is currently on the table.

Meanwhile, just days into the job and he has already established red lines. Leo Varadkar and Micheál Martin were warned that protecting live exports, securing the nitrates derogation and preventing cuts to the national herd were all red-line issues for the IFA – clearly aimed at ensuring both men are not tempted to capitulate to Green Party policy in a rush to form the next Government.

We wish Till Cullinan and incoming deputy president Brian Rushe every success in their new roles.

At 11pm on Friday, the UK will leave the EU, 37 years after it joined alongside Ireland in 1973. The departure marks the first withdrawal of a member state, more than 60 years after the Treaty of Rome – the treaty that established the European Economic Community (EEC) in 1957.

Given the turmoil since the Brexit referendum almost four years ago, many will look at the UK’s departure as finally bringing an end to a fraught and disruptive period in EU history. But its significance should not be ignored, exposing the challenges and indeed threat that a changing political, social and media landscape present to the future of the EU. Nor should we ignore the impact of the UK’s departure on Europe’s political influence, particularly with the US.

Ireland not only benefited from this political influence at a global level but also within the EU. While there may have been some divergence on agricultural policy, Ireland and the UK have traditionally been aligned on key EU policy issues, particularly in relation to mounting a strong defence of corporation tax.

While the implementation of an 11-month transition period means no immediate change in terms of the regulatory and trade environment, the departure of the UK on Friday night changes everything. From then, the UK simply becomes a third country with which the EU is trying to negotiate a trade deal. While it will continue to be in focus, the EU-UK trade talks will not dominate the political agenda in Brussels. It is a negotiation process where all member states do not have the same exposure. In fact, many member states would see minimal impact in the event of a no-deal scenario where the UK defaults to World Trade Organisation (WTO) rules. Ireland is different. Given our dependence on the UK market for agri-food exports and the tariff regime applying to these under WTO, Ireland – with less than 1% of the EU population – would carry almost 20% of the financial cost to the EU of a no-deal Brexit.

The consequences of a very challenging autumn are beginning to show. This week saw recognition of these challenges at national and European levels with the granting of exemptions on greening requirements for 2020, specifically the three-crop rule.

These will be granted on a case-by-case basis as opposed to the blanket derogation of 2018. Tillage farmers can then apply as part of their 2020 BPS application. The application will be assessed to ensure growers meet stated requirements. While the move is welcome, growers are currently planning their spring cropping regimes and need certainty that they will be granted an exemption.

Spring seed supply is set to be tight and growers are urged to place orders as soon as possible. This will help seed merchants forecast demand and determine if imported seed is required. Growers need clarification on an exemption from three-crop rule obligations as soon as possible in order to make these management decisions.

With calving now under way, the trade for the small number of calves coming on to the market remains strong.

In this week's edition, Darren Carty reports that Bord Bia is forecasting a strong live export trade in the months ahead. It is an important outlet for calves but one that is coming under more scrutiny.

Farmers cannot allow for this trade to be undermined by the poor practices at any stage in the supply chain. A zero-tolerance approach to poor animal welfare standards must be adopted.

The results from the latest Grange research shows the extent to which it is not viable to keep these calves in the country. Even in a system achieving maximum levels of efficiency and growing 15t of grass DM per annum, the net margin achieved per HA is not sustainable.