Varadkar’s solo run appears to green-light dairy expansion – at expense of beef

Since the publication of the Government’s Climate Action Plan last November and the announcement of strict and binding cuts to agricultural emissions, which account for 37 per cent of total emissions, the highest of any EU state, the dairy industry has been braced for impact.

The expectation was that milk quotas would once again be imposed on the sector in a bid to bring it into line with the State’s wider climate objectives.

Dairy, the richest and most lucrative agri enterprise in the State, has been on a rocket-fuelled expansion path since the lifting of EU milk quotas in 2015. Milk output – on an all-island basis – has effectively doubled to 10.4 billion litres while the Republic’s dairy herd has swelled by a third to 1.6 million.

Targets

The need to rein this in, not only in the face of the State’s newly-adopted climate targets but also because of its obvious damage to water quality from a bigger herd with an bigger effluent run-off, has been acknowledged even by pro-farming elements.

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The Environmental Protection Agency (EPA) estimates that more than a third of Irish rivers and a quarter of lakes are failing to meet environmental quality standards due to high levels of polluting nitrates and phosphates, a large share of which comes from agriculture.

There was an expectation that maybe dairy co-ops and other big processors would be told to limit their milk intake at current or close to current levels, not necessarily a bad outcome for the industry given the stellar expansion of recent years.

Tánaiste Leo Varadkar has, however, ruled that out, providing assurances to industry that there will be "no volume control" when it comes to milk production in Ireland.

After a meeting last Wednesday between Varadkar, Minister of State at the Department of Agriculture Martin Heydon and various farming groups, the Irish Creamery Milk Suppliers Association (ICMSA), which represents dairy farmers, said it had received strong assurances from the Tánaiste that there would be no cutbacks.

“Certainly from ICMSA’s point of view, any insight into official policy around milk production is always of the highest importance,” ICMSA president Pat McCormack said.

“The main takeaway for us from yesterday’s meeting was the view expressed by Tánaiste Varadkar that he is against any volume control on the amount of Irish milk produced,” McCormack said.

“We are interpreting that – in conjunction with Professor [Gerry] Boyle’s stated position on the Food Vision group – as an assurance that emissions lowering measures that are already working will be given a chance and that we are not going to see any crude and unscientific measures on an across-the-board basis aimed at lowering the production of our most valuable agri-export,” he said.

Former Teagasc director Gerry Boyle, who now heads up the Government's new Food Vision Dairy Group, gave similar assurances in a recent RTÉ interview.

Varadkar, who has a reputation for solo runs, appears to be providing guarantees to the dairy sector in advance of official Government policy and a firm decision on how each agri division will deliver the sector’s overall carbon budget.

It’s not obvious if his “no volume cuts” guarantee fits with Green Party policy either.

The exact concessions demanded will be decided in June following consultations between Minister for the Environment and Green Party leader Eamon Ryan and his ministerial colleagues, a Green Party source said, while describing Varadkar's move as "pre-emptive".

Either way, we have the incoming taoiseach and the State’s most senior agri expert telling the dairy sector there won’t be cuts in output.This could be a continuation of Fine Gael’s climate fudge, the party has a history of announcing targets while secretly watering them down behind the scenes.

However, the fear for beef farmers is that these assurances reflect a Government preference for supporting the country's high-value dairy industry over the beef sector. Much of the latter is inefficient, conducted on a part-time basis, and heavily reliant on subsidies from Brussels.

There’s a view forming that a decision to gradually run down the suckler beef herd has already been made, albeit on the quiet for fear of the backlash.

Currently about 50 per cent of Irish beef comes from the 900,000-strong suckler herd kept specially for beef production, with the remainder coming from the dairy herd.

Some favour integrating the two systems – with the gradual phasing out of a separate beef herd – to allow the more profitable dairy sector to expand while reducing emissions overall.

Beef farmers could point to the fact that only 17,500 of the State’s 110,000 farmers are dairy and yet dairy produces over a third of the emissions from the sector.

The Climate Action Plan seeks a 22-30 per cent reduction in agri emissions by 2030. According to a report by KPMG, however, anything above 21 per cent will require a reduction in the national herd.

Talk of reducing the herd tends to elicit strong reactions and so far the Government has remained vague on the issue, talking about “stabilising” herd numbers, whatever that means.

Varadkar's assurances to farmers were most likely politically motivated. The Munster and south Leinster dairy base is traditionally Fine Gael and the party is struggling to sell the Government's new green agenda.

Former minister for rural and community development Michael Ring is reported to have told a recent Fine Gael parliamentary party meeting that the "Dublin-oriented green agenda" on the environment is "going to finish the Fine Gael party".