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This should have been the perfect year in which to take on the deputy presidency of a farm organisation – particularly of the dairy variety.
Incomes in dairying had hit an all-time high, milk prices reached record levels and even the cattle trade was on fire.
However, you rarely get all the balls to hop your way, as Kilkenny milk supplier Denis Drennan knows well.
The second-in-command at ICMSA has been faced with as many challenges as opportunities since he took on the role in April this year.
Dairying might be flying at the moment, but climate change and the Nitrates Directive present an existential challenge to the continued growth of the industry.
Add spiralling input costs and the continuing shortage of labour to the mix, and it all adds up to a very busy introduction to top-level farmer representation.
The immediate issue facing Irish farming is obviously the 25% reduction in the carbon emissions target announced last week for agriculture.
Drennan is of the view that there is an absence of fairness in the manner in which agricultural emissions are calculated.
“The Paris Agreement is an unfair accounting system for emissions from farming,” he maintains.
“The trees, hedges and grass growing on my farm every day is sequestering carbon but I am not allowed to use this to offset the carbon that is being emitted on my farm. It’s a case of heads I lose, tails you win,” Drennan says.
“The way in which the inventory for agriculture is calculated is flawed. If I plant a quarter of my farm with trees I get no credit; if I cover a quarter of my farm with solar panels I get no credit; if I build an anaerobic digester and produce biomethane, I get no credit; or if I put up a wind turbine I get no credit, if I rewet part of my farm I get no credit.
“So what options have I to offset carbon or methane produced on my farm?” he asks.
“Minister Ryan gave some of these as examples of how farmers can do their bit for the environment, but the reality is that we’ll get no credit for any of them,” Drennan points out.
Policies
“Food Harvest and all the other Government policies plus the CAP since the second World War have driven family farms and incentivised them to drive on and produce more.
“Now, we’re to do a handbrake turn and go in the opposite direction.
“The Government has said it accepts there is a need to support farmers to do this. Where is this support?” he again asks.
The pressure of climate change is matched by that of water quality.
However, Drennan says farmers are frustrated that the efforts being made at ground level to address water quality have not been given the time to deliver.
“We have tighter regulations coming in every year for [nitrates] derogation farmers, but these actions are not being given the time to work,” the Clara farmer argues.
“The modelling done last year by Teagasc stated that a cut in chemical N, plus increased enforcement, were the two most effective measures for water quality.
“But Teagasc also stated, as did the agricultural catchments programme results, that it would take 18 to 24 months for these measures to show results,” Drennan explains.
“These measures were brought in this year but we are now going to be judged on this year’s results to determine if more regulation is needed before we give these measures a chance to deliver,” he says.
Fixed-milk-price (FMP) contracts will have to evolve to effectively become fixed-margin schemes if they are to retain the confidence of farmers, Drennan believes.
Asked if the continuing controversy around FMP schemes has damaged the standing of these contracts among farmers, the ICMSA deputy president is very definite in his reply – “absolutely” he says.
He blames the current difficulties with FMP schemes on three primary factors: the decision to remove the mechanism which dampened input price fluctuations; the failure to restrict the proportion of milk supply which farmers could commit to fixed-price contracts; and the influence of the financial institutions.
There is no point milking a big number of cows and earning good money if you don’t have the time to enjoy it with your family and friends
“Input cost inflation was built into the fixed-milk-price schemes in the past, but that was removed which was a huge mistake,” Drennan explains.
“A lot of financial institutions were using it [FMP schemes] in an inappropriate manner, in that they insisted that farmers who wanted to get loans had to fix a large percentage of their milk because these financial institutions wanted guaranteed returns,” he adds.
The ICMSA representative says the failure of processors to restrict the volume of milk farmers contracted under FMP schemes was also a serious issue.
Looking to the future, Drennan is adamant that FMP schemes will have to return to effectively being margin-based contracts, which take account of input costs.
“A fixed milk price is no good to anybody. It is the margin that you need to fix. Your margin is more important,” he maintains.
“If I get 50c/l for my milk, or 20c/l for my milk, or 70c/l, it’s irrelevant. It’s the margin that I live on, not the price,” Drennan says.
“I was better off when milk prices were at 30c/l to 32c/l and fertiliser at €180/t than I am now with milk at 55c/l and fertiliser at €1,000/t.”
Labour and the associated issue of work-life balance are two of the most pressing challenges facing dairy farmers, Drennan believes.
The ICMSA deputy leader feels that dairy expansion has been largely completed at this stage but many farmers are struggling to get their work-life balance right.
“Work-life balance is becoming increasingly important,” Drennan says.
“There is no point milking a big number of cows and earning good money if you don’t have the time to enjoy it with your family and friends,” he adds.
The level of commitment in terms of time required in modern dairying is increasingly putting pressure on family life, Drennan argues.
“A lot of farmers who are married with families are not getting to go to the hurling matches or the feis, or whatever the children are at, because of the labour situation. And this can create a bit of tension in the home.
“The balance has to be tilted back, and addressing the labour problem on farms is part of the solution,” he maintains.
“What we need to look at is foreign workers coming in,” Drennan says.
He believes the shortage of labour in the economy at the moment means that securing sufficient numbers of Irish staff to work on dairy farms is not feasible.
Appetite
“There is no real appetite among Irish people to work on farms. The reality is that someone can leave a job on Friday and be in a different one on Monday,” he points out.
However, Drennan stresses that he is not advocating a cheap labour policy for dairy farms.
“The minimum wage is not an option.
Really good operators are on serious money, comparable with any other sector.
“A lot of operators on dairy farms are earning the equivalent of €20/hr, and the jobs come with excellent terms and condition,” he says.
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