Policy Markets Processing

Quotas Off Needs Better Before Bigger

IRELAND - Quota removal takes the “shackles” off Irish dairy farmers but a leading economist insists that the best way to grow is to improve first.

10 April 2015

2 minute read

Europe

Irish dairying has “huge opportunities” which need maximising but there are major financial risks and environmental challenges to overcome, said the director of the Agriculture Food Development Authority (Teagasc).

Addressing a conference on quota removal in Dublin last week, Professor Gerry Boyle stressed the importance of good advice reaching producers to make informed decisions.

Ireland’s farm minister has welcomed quota abolition and farmers target a 50 per cent milk production increase by 2020.

But Professor Boyle’s message was that a rise in profitability should come after a rise in productivity.

He said an average farm can save €71,000 by maximising grass yield and increasing the six week calving rate from a national average of 58 per cent to 90 per cent.

“Only 7 tonnes per hectare of grass is utilised, on average, on our dairy farms and a target of 15 t/ha is eminently achievable,” said Professor Boyle. “This would be worth about €1,300/ha or nearly €50,000 for a 60 hectare farm.” read more

Alongside grassland use, he emphasised animal health, fertility and “continued genetic gain with a focus on the enhancement of milk solids” as key to “substantially increasing productivity.”

He called for a considerable productivity improvement in the next five years.

“This consideration trumps all others following abolition, including the understandable desire of many farmers to drive on expansion. As my colleagues now continually emphasise farmers need to stress: “better before bigger”, “efficiency before expansion” and “skill before scale”."

In its recent report, Teagasc noted how Ireland is one of the lowest cost milk producers but that scale and efficiency is required to grow income.

Under quotas, which Ireland opposed strongly back in the 1980s, milk yield increased 48 per cent to 5,200 litres and overall average farm output has rocketed 470 per cent from 70,000 litres from 330,000 litres.

Teagasc economist Trevor Donnellan, said that, over this time, Ireland’s economy has transformed.

Milk production is now “by some distance” the most profitable mainstream farming activity, although quotas met strong opposition in 1984.

Initially, Ireland wanted exemption from the quota system before lobbying for a bigger quota in the 1990s.

“From the outset, the Irish government opposed the milk super levy and quota proposals with all its diplomatic resources,” said Mr Donnellan. “Austin Deasy, the then Minister for Agriculture, recalled that ‘we refused to go along with this agreement and continued to maintain our demand for special treatment’”.