The decision to reduce the upper limit in the nitrates derogation from 250kg N/ha to 220kg N/ha will directly affect 2,096 farmers according to the Department of Agriculture. This is the number of farmers stocked greater than 220kg N/ha in 2022 and who are farming lands affected by the new derogation limits set in 2023.

This number really only represents the tip of the iceberg when it comes to who is affected by derogation changes. Firstly, the areas of the country affected by the reduction to 220kg N/ha is set to increase next year when additional water quality and risk assessment data is processed by the relevant authorities.

This means that more parts of the country will be operating at 220kg N/ha by 2025 and this has been acknowledged by the Minister and his officials.

The Minister has repeatedly said that there is no guarantee that Ireland will be granted a derogation at the next review.

This conditioning of farmers to expect that not only will the 250kg N/ha limit not be restored, but that the 220kg N/ha could be reduced further – or that the derogation could be lost outright – is a new low in terms of political inaction and not accepting the responsibility of representing Irish farming in the face of ill-conceived policy decisions from Brussels.

This policy is ill-conceived because recent Teagasc science tells us that reducing stocking rate will have a very small impact on reducing nitrogen losses but a large and detrimental impact on economic performance. The Teagasc research has also shown that other measures – many of which have recently been introduced or could yet be introduced – will have a far greater impact on reducing nitrogen losses and a far smaller economic impact on farmers.

Nitrate levels in water

At farm level, evidence from the Teagasc Agricultural Catchments Programme tells us that where overall stocking rate is 250kg N/ha or below – and where slurry and other nutrients are used appropriately, – then reducing the stocking rate won’t reduce nitrate levels in water. This is based on 15 years of data collection on nitrate levels across six catchments of varying soil types and farming pressures.

It is unfathomable that an Irish government could accept a ruling from the European Commission that is so damaging to Ireland’s economy and one which so clearly won’t deliver on its stated objectives in terms of improving water quality. Not adequately defending Irish agriculture in the face of overwhelming evidence is akin an act of self-harm.

If the evidence went the other way, i.e. that reducing the derogation would have a significant improvement in water quality, then I think the government and farmers would be correct in accepting the reduction.

Supporting lands

Certain practices have been identified as being detrimental to water quality, such as spreading slurry in the closed period and carrying very high stocking rates on the milking platform.

The latter is an issue particularly when slurry is not being spread on the supporting lands. According to the Teagasc research referenced above, that practice has a similar effect in terms of nitrogen losses as spreading slurry in the closed period.

There are actions that can be taken to prevent nutrient loss from the practices identified above, none of which require a reduction in the derogation. Reducing the derogation, or losing the derogation is going to cripple farmers and not solve the root cause of why water quality isn’t improving quickly enough.

In simple terms, a dairy farm stocked at 2.5 cows/ha (one cow to the acre) and producing 470kg MS/cow at say €5/kg MS has a gross output of €5,875/ha. If costs make up say 60% of output, then total costs will be €3,525/ha. If 50% of costs are fixed and 50% are variable then fixed and variable costs amount to €1,763/ha each. The net margin in this instance is €2,350/ha.

In a scenario where the derogation is lost, then the maximum stocking rate for a farmer in the middle band will be 1.85 cows/ha, a 26% reduction. At the same level of performance, gross output drops to €4,348/ha. Variable costs are likely to reduce in line with cow numbers by 26% so will be €1,565/ha.

Total costs

Fixed costs won’t change and will remain at €1,763 so total costs will be €3,328/ha. Net margin under a no derogation scenario will therefore be €1,020/ha which is a 57% reduction.

Dairy farm businesses relying on high levels of leased land, bank debt or non-family labour will struggle to survive under such terms. The model of profitability which is based on running an appropriate stocking rate relative to grass growth goes out the window under such scenarios.

Precedent

If the precedent which has now been set to reduce the derogation continues, and if a strategy like the one adopted in Netherlands where the derogation is being reduced to 170kg N/ha over a number of years is adopted in Ireland, then the impact will be catastrophic.

The 2,096 farmers impacted by the current change will pale into insignificance as the 7,302 farmers who applied for a derogation in 2023 will all be affected to varying degrees. As will the 5,909 farmers who exported cattle slurry in 2022, mostly to stay under the 170kg N/ha limit. These farmers will be affected because competition to secure land to accept slurry is going to increase sharply.

So now we have over 13,000 farmers directly affected who will have to either reduce cow numbers, take on additional land or export slurry in order to continue farming. There is only one of these options within their control and that is to reduce stock numbers.

In early November, it emerged that a six-month extension may be introduced on the reduction from 250kg to 220kg N/ha. This will have the effect of reducing the number of farmers affected by the change in 2024 and while welcome, it doesn’t have any impact on 2025 or beyond.

Risks

When the EU Commissioner for the Environment Virginijus Sinkevicius visits Ireland on 23 November, he needs to be informed of the facts around the science of water quality in grass-based systems.

He also needs to be made aware of the risk of unintended consequences, such as the shift towards higher input, higher output systems that is happening across Europe. This will not help water quality or reduce greenhouse gas emissions.

Finally, an extension is welcome but it’s only temporary. What farmers need now is certainty that if investments are needed in slurry storage, they will have the cows on the farm to pay it back.

Farmers and financial institutions need certainty that the repayment capacity for investments in slurry storage and calf housing will be present, at least up to 2030.

If that certainty isn’t there, farmers won’t invest and banks won’t lend money to farmers to invest in sustainability measures like extra slurry storage. That could lead to a self-fulfilling prophesy in terms of water quality not improving due to inadequate storage.

Above all else, Irish farmers need leadership from the Minister for Agriculture.