Is the agenda to stand aside or shut down Greenfield?

The future of the Greenfield Farm dairy project is very much in doubt with two of the three shareholders moving to terminate it. In such a scenario, the legal framework exists for the project to be wound down in the coming months – five years earlier than had been anticipated.

As Matt Dempsey details, the Irish Farmers Journal approached Glanbia in 2008 to explore the option of establishing a dairy demonstration farm. With EU agricultural ministers having taken the decision in 2007 to abolish milk quotas, the motivation was to explore the opportunities and challenges that a quota-free environment would present Irish farmers.

Key to the project was exploring the economic viability of a dairy enterprise where there were full land and labour charges in the absence of a Single Farm Payment. Seventy per cent of the money was borrowed for the development and establishment of the enterprise, to be repaid over the 15-year project lifespan.

With such an economic burden, any fears that the driving force behind the project was for Glanbia to show farmers how cheaply milk could be produced quickly evaporated. Even on a good year, total costs of production never fell below 30c/l. And of course not every year was a good year.

Putting forward these challenges as a reason for terminating the Greenfield project is simply not credible

Mistakes were made but, ironically, this was probably when the project was at its most valuable to farmers.

Some viewed criticism of the farm as a negative but in fact it was evidence of a project that had engaged farmers like no other. This engagement was driven by the complete transparency around the physical performance of the farm, the outcome of management decisions and the extent to which the financial performance was outlined in detail. However uncomfortable this may have been, the structure of the project meant there could be no grey areas.

Whether from its successes or failures, there is no doubt that the Greenfield project has played a major part in not only helping existing dairy farmers harness the opportunity of expansion but also in guiding many new-entrant dairy farmers through the pitfalls of conversion. There have been over 500 new entrants in the Glanbia catchment area since 2010.

The argument being put forward by Glanbia for the early termination of the project is that there are new challenges facing the sector that require attention. This is true, with issues around calf management, environmental controls, water quality and improved animal welfare all coming centre stage. However, putting forward these challenges as a reason for terminating the Greenfield project is simply not credible. The Irish Farmers Journal believes the Greenfield project is ideally positioned to continue to help educate farmers on how best to respond to the range of challenges that lie ahead. It is for this reason that earlier this week, The Agricultural Trust (owners of the Irish Farmers Journal) informed the chair of the Greenfield board, Martin Keane, that it wished to explore a mechanism that would allow the Irish Farmers Journal continue to operate the project to completion while respecting the decision of Glanbia and the landowners to step back.

If an agreement can be reached, the Irish Farmers Journal will continue to operate the farm for the next five years in the same transparent and farmer-focused way as it has operated over the past 10 years, along with the support of Teagasc.

We feel that such an outcome would not only safeguard the project as a valuable learning resource for Irish farmers but also protect the integrity of the land leasing and partnership model. Using a legal framework that was included in a contract to cater for exceptional circumstances to simply terminate a partnership early in the absence of any credible reason is setting a dangerous precedent – especially when spearheaded by a farmer-controlled board.

Ultimately, the response to the offer by the Irish Farmers Journal to continue the project will make clear whether or not the agenda of the other shareholders is to step back from the project or actually see its door shut.

There has been much commentary around the future of the project in recent days, in some cases by individuals who have never actually walked the farm.

In this light, we have decided to hold an information day on the farm on 28 May to allow both farmers and stakeholders see first-hand the physical and financial performance of the farm and how the direction of the farm is responding to the challenges that lie ahead for Irish dairy farmers. An open forum will take place to discuss these challenges and how farmers feel the Greenfield project can help the industry respond.

Ornua this week revealed that total sales under the Kerrygold brand have surpassed €1bn.

The success of Kerrygold shows how from a foundation stone of collaboration, a focused strategy executed by strong management can build real brand value for farmers.

Success did not come overnight, however. It has taken decades during which Irish farmers have invested heavily in ensuring that the credentials of our grass-based dairy model are understood by consumers across the world.

This investment has seen the Kerrygold brand achieving the difficult task of growing volumes while maintaining a price premium in the market.

Perhaps the only flaw in the success of the Kerrygold model is the lack of transparency around how this premium flows to farmers in the milk price.

For the first time, Ornua has detailed that in 2018 it returned a milk price to their members equivalent to 99% of the EU average, along with a €19m member bonus. Therefore, there is no doubt that the organisation is creating value.

What is less clear is how this value is flowing from some member co-ops back to farmers through the milk price.

We report on a number of positive developments in the beef sector this week. In the short term, tighter supplies have seen factories life prices. A similar trend is evident across the UK.

The live export market has received a boost with clearance for beef bull exports to Algeria. The Department deserves credit for removing blocks in relation to health certificates.

The spread of African swine fever in China has the potential to see demand for meat protein soar. With reports of mass under-reporting of the spread of the viral disease, the impact on Irish beef, pigment and poultry prices could be significant.

However, this should not distract from the need to ensure farmers who slaughtered cattle in the past six months are adequately compensated. The IFA protest has kept the issue centre stage. The response by the Taoiseach that the Government is pursuing an aid package in Brussels must stay top of the political agenda.

Politics has cranked up again at Westminster following the Easter break. However, there appears to be even further fragmentation of political thinking with no sign of a plan on how to leave the EU without economic chaos.

UK prime minister Theresa May desperately wants to avoid European Parliament elections on 23 May. The Labour party has neither the desire to help her get her withdrawal deal approved nor a clear policy of its own.

For farmers on the island of Ireland and in Britain, the nightmare of a no-deal Brexit remains a realistic possibility, even if it has had a lower media profile in recent days.

As part of Agri Aware’s open farm project, farms in Dublin, Cork and Kildare will open their doors to the public next Monday. All three farm families deserve great credit for helping to educate the public on the food safety, animal welfare and environmental standards Irish farms meet. Details at www.agriaware.ie.

Over 1,200 farmers have registered to attend our Beef Summit, which takes place next Thursday (9 May) at 7pm in the Shearwater hotel in Ballinasloe, Co Galway. The focus is very clear: for industry leaders and decision makers to outline to farmers where they see the future of sucklers. Adam Woods goes into detail here.