The Irish Farmers Association Submission

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1 The Irish Farmers Association Submission to the Public Consultation issued by the Department of Environment, Community and Local Government on a Framework for Sustainable Development for Ireland Prepared by: Harold Kingston IFA Environment & Rural Affairs Chairman Thomas Ryan IFA Environment Executive The Irish Farmers Association The Irish Farm Centre Bluebell Dublin th February 2012

2 Contents Introduction... 3 Part 1: Agriculture s Contribution to Sustainable Development Agriculture and the Food Industry Importance to the Irish Economy Agriculture A Sustainable Business Drivers of Improved Water Quality... 5 Part 2: Framework for Sustainable Development for Ireland IFA s Response Environmental Tax Reform Proposed User Charges Waste Management Policy Biodiversity National Climate Change Policy Irish Energy Policy Developing Sustainable Communities Regulation

3 Introduction The Irish Farmers Association (IFA) is a national organisation representing the interests and views of farmers and rural communities in Ireland. Over 90,000 farm families in Ireland are members of the IFA. The Association welcomes the opportunity to outline the sustainable nature of agriculture in Ireland and the unique emission efficient nature of food production. IFA considers this consultation as a useful opportunity to make proposals regarding important sustainable development policy measures including environmental taxation, waste management policy, energy policy, climate change and biodiversity. The Association looks forward to working with Government to deliver many of the policy measures proposed. 3

4 Part 1: Agriculture s Contribution to Sustainable Development 1.1 Agriculture and the Food Industry Importance to the Irish Economy Agriculture and the Irish food sector provide 14-15% of total employment, representing between 287,000 and 308,000 jobs. This has an extremely positive contribution for the Irish economy because every 100 of agricultural output produces an additional 73 of output, creating a total of 2.95 billion in output in the Irish economy. 1 The agri-food sector has a sustainable model, sourcing 71% of its raw material from the domestic market 2 and producing to the highest environmental and animal welfare standards. 1.2 Agriculture A Sustainable Business Ireland generally enjoys good biological quality in its rivers, lakes and in-shore and marine waters. 3 Farming has played its part in contributing to this good environmental standard, while seeking to achieve the ambitions of the Water Framework Directive through on-farm investment, recycling and improved nutrient management. Since 2005 over 2.5billion has been spent upgrading farmyards, increasing slurry storage facilities and improving run-off management. In addition to this, farmers recycled over 20,000 tonnes of silage plastic in This investment by farmers in Ireland s environment is paying dividend, with the most recent EPA Water Quality in Ireland report showing that 85% of groundwater bodies are described as good status, only10% of rivers considered to be of a poor status and just three lakes described as being in a most enriched state. This high standard of water quality is part of a continuous trend of improvement with decreases in groundwater nitrate and phosphates generally seen Nitrogen and Phosphorous Agriculture policy measures aimed at improving water quality mainly concentrate on nitrogen and phosphorous use. The nitrates regulation (which also governs the use of phosphorous) is the implementation regulation of the Nitrates Directive. This Directive is the daughter Directive of the Water Framework Directive (WFD) and represents agriculture s contribution to the delivery of the requirements of the WFD. The nitrates regulations establish baseline water quality for nitrate (NO3) and phosphorous. In the case of NO3, the defined parametric value is 50mg/l. Data produced by the EPA shows that 97% of water monitoring sites have mean concentrations of less than 25mg/l NO3, with 100% of monitoring sites reporting a mean concentration of less than 37.5 mg/l NO3. With regard to phosphorous, 72% and 81.3% of rivers and lake monitoring sites respectively were of good or better quality, and there 1 O Connell J et al (2011) The Importance of Agriculture and the Food Industry to the Irish Economy, School of Agriculture, Food Science and Veterinary Medicine, University College Dublin, Belfield, Dublin 4. 2 Department of Agriculture, Fisheries and Food (2010), Food Harvest A vision for Irish agri-food and fisheries. 3 OECD (2010) Environmental Performance Reviews IRELAND 4 EPA (2010), Water Quality in Ireland , Environmental Protection Agency, Johnstown Castle, Wexford. 4

5 was a decrease in the percentage [of] groundwater monitoring locations with average phosphorous concentrations greater than 0.035mg/l Drivers of Improved Water Quality Farm Investment Since 2005 the largest ever farm investment programme has taken place, involving the construction of farm buildings and upgrading of farmyards. Over 2.5 billion has been spent as part of this farm investment programme to comply with the WFD implementing directive for agriculture, the Nitrates Directive. Farmers have financed this farm building programme through a 45% increase in borrowing, escalating from 3.7 billion in 2005 to 5.4 billion in Many farmers are struggling today to meet their bank repayments, with average farm incomes in 2010 at 17,771, a 46% increase in income when compared with This problem is exacerbated both by an increase in interest rates and changes in terms and conditions imposed by financial institutions Reduction in Chemical Fertiliser Use Between 2000 and 2009, the use of chemical fertiliser reduced by 25%, 59% and 57% for nitrogen (N), phosphorous (P) and potassium (K) respectively, with P and K usage now at 1950 s levels. This reduction in fertiliser use can be associated with more efficient use of fertilisers and therefore may be considered as environmentally desirable. However, this dramatic reduction in fertiliser use is raising soil fertility concerns 6, which are impacting on crop yields and animal husbandry, and has resulted in a slight recovery in fertiliser use in recent years. Fertiliser use continues to remain within the requirements of the regulations and best agronomic advice Compliance with the Stringent Requirements of the Nitrates Vulnerable Zone When the nitrates regulation was introduced it was agreed that a national implementation approach would be adopted in Ireland, with the entire country designated as a Nitrates Vulnerable Zone (NVZ). This is unique when compared to England and other western European countries. This whole territory NVZ designation requires 100% of farmers in Ireland to achieve the highest water quality standards, while within the EU approximately 55% of the total farmed area is required to achieve the same standards. Therefore, each one of the approximate 140,000 farm families in Ireland are subject to the costly and onerous measures contained in the nitrates regulation. These measures include: Building additional slurry storage facilities. Developing farmyards. Increased costs due to compliance obligations. 5 EPA, Office of Environmental Enforcement (2010) Progress Report on the Implementation of European Communities (Good Agricultural Practices for Protection of Waters) Regulations 2009 (S.I. No. 101 of 2009) 6 Lalor S. (2010) Fertilizer P and K usage back to 1950s levels. Irish Farmers Journal. 27 th March 2010, 6-7 5

6 Improving run-off management. Completion of fertiliser import and export records. Estimating annual fertiliser requirements. Notification of temporary movement of cattle and sheep. Calculating slurry storage capacity. Compliance with reduced fertiliser application rates. Reduced income, yield and output because of reduced stocking rate obligations. Increased cross-compliance obligations. Restrictions on the dates when nutrients can be applied to land. The devaluation of land and income, and yield loss due to excessive land sterilisation. As previously outlined, Ireland s water quality is of a high standard. However, a time-lag of up to 20 years exists between the implementation of the measures set out above and further improvement in water quality. 7 Therefore it is essential that these measures are afforded their full opportuity to reduce nutrient loss from agricultural sources. Part 2: Framework for Sustainable Development for Ireland IFA s Response 2.1 Environmental Tax Reform The consultation document refers to carbon tax as an example of the effective use of an environmental tax towards taxing what society wants less off. However, the crude way within which this tax was introduced has adversely affected the competitiveness and future growth prospects of the agri-food sector. Each year the carbon tax takes 24million out of the agriculture sector. This carbon tax was introduced under the guise of a dissuasive tax to encourage the greater use of alternatives, such a public transport or diesel instead of petrol. However, the tax is instead used for general revenue raising purposes. In essence, the carbon tax today is not an environmental reform tax but is instead similar to general taxes such as VAT. Furthermore, given that this tax was not introduced in other EU member states, it represents a trade barrier for indigenous exporting sectors such as the agrifood sector. IFA is opposed to the carbon tax as it represents an increased cost on production and reduces the competiveness of the sector. IFA propose that the carbon tax collected from the agriculture sector is ring-fenced and used to support investment in carbon reduction and off-setting projects such as an anaerobic digestion, micro-wind energy production and bio-mass production. In addition, the recent increase in the Carbon Tax on farm diesel must be passed back in full to farmers, either through point of sale deduction or through a direct reclaim for VAT registered farmers, rather than unworkable income tax reliefs. 7 Teagasc (2009), Teagasc Submission on the draft River Basin District Management Plans and the draft Fresh Water Pearl Mussel Sub-Basin Management Plans, Teagasc, Agricultural and Food Development Authority, Oak Park, Carlow. 6

7 2.2 Proposed User Charges The consultation document proposes the more widespread use of user charging. In advance of the introduction of further user charges, including the expansion of water charging to the non-domestic sector, a number of issues need to be addressed including: Cost allocation between users and suppliers where historical under-investment in infrastructure has taken place. Service suppliers must be required to cover the cost of inefficiency in service delivery. For example, it is inequitable to seek that water users would pay for uncontrolled water leakage outside the farm-gate. 2.3 Waste Management Policy Farmers have a good recycling track record recycling almost 20,000 tonnes of silage plastic in 2010 and supporting the recent establishment of the first voluntary recycling initiative, Farm Plastics Recycling Ltd (FPR). However, the FPR was established due to market failure in waste management policy in agriculture, particularly as it relates to the collection and recycling of fertiliser bags, chemical drums and other waste streams outside of film plastic. Furthermore, the substantial annual levy which is being paid by the companies who put these materials (fertiliser bags, chemical containers etc.) on to the market is being paid to another compliance scheme. However, prior to FPR no service was being provided to the farming community at all IFA Proposal 1. All levies paid by the companies who place fertiliser bags, feed bags, chemical containers, netting and twine on to the market should be received by FPR. As FPR is a not-for-profit company this will immediately reduce the cost of recycling and will make the service more attractive to famers and by extension, increase the recycling activity. 2. Triple rinsing of containers should be accepted by all local authorities, without exception. This is recognised as international best practice and the ambiguity in one local authority is causing unnecessary concern. 3. Further taxes or levies, over and above the Environmental Protection Contribution levy already in place, should not be introduced. Any further taxes or levies may, if passed on to the farmer, add further to increasing input costs and erode the competitiveness of the sector and reduce the incentive to recycle Scrap Metal Compliance Scheme IFA members are currently experiencing an escalating problem of metal theft in rural Ireland. In recent months, householders in Limerick were left without a phone service after thieves removed over 150 metres of copper phone cable, while Eircom manhole covers are also being widely stolen. Car batteries, farm machinery and scrap metal are being taken out of farmyards. In Cork, thieves are stealing road-signs, while in the midlands an increase in the theft of copper pipes, cylinders and radiators from houses and sports clubs are being reported IFA Proposal 1. A metal compliance scheme, similar to IFFPG, should be introduced to track scrap metal and identify the thieves who enter private property and steal machinery and other materials 7

8 from farmers. This compliance scheme should oblige all scrap metal dealers to register and to provide a weight receipt of tonnage delivered. 2. Legislation should be introduced which increases fines and penalties for any person caught stealing materials on private property. 2.4 Biodiversity The consultation document refers to the implementation of Ireland s National Biodiversity Plan, the development of a National Habitat Map and the development of a National Landscape Strategy to assist in the further development of ecosystems and biodiversity. Farmers have a strong commitment to biodiversity, planting over 10,000km of hedgerows, building over 3,000km of stonewalls and planting over 1 million broadleaf trees. In addition, over 46,000 farmers participate in specific environmental schemes such as the Rural Environment Protection Scheme (REPS). However, future ecosystem and biodiversity development is dependent on the continuation of important environmental schemes such as REPS and AEOS. It is both unhelpful and unwise that the Department of Agriculture has decided to reduce funding for REPS and AEOS. IFA propose that the Government should demonstrate their on-going commitment to ecosystem and biodiversity development by adequately funding environmental development schemes such as REPS and AEOS. A better balance must be achieved between the desire to protect biodiversity and the need for the continuous improvement and reinstatement of neglected productive farmland, if the growth targets, as set out in Food Harvest 2020 are to be achieved. 2.5 National Climate Change Policy IFA welcomes the pragmatic approach now taken by the Department of Environment to address the climate change challenge. The rushed attempt to introduce climate change legislation in 2010, which ignored the views and concerns of stakeholders must not be repeated. Addressing climate change can present an opportunity for the Irish agri-food sector to reduce international greenhouse gas (GHG) emissions by displacing less emission efficient food production systems in other regions. Agriculture is the sector that has made the most significant reduction in GHG emissions. This reduction in emissions is driven by earlier beef slaughter age, reduced fertiliser use, improved grass utilisation and breeding more feed efficient animals. In the dairy sector this strategy has resulted in a 12.4% reduction in methane emissions per litre of milk. However, the agriculture sector can deliver a reduction of no more than 4% in emission reductions based on cost effective emissions reduction options and technologies available. 8 Therefore, with world population set to increase by 70% over the next 40 years, 46% of the EU is considered to be water-stressed and Ireland is 95% dependent on imported fuels, therefore there is an obligation on the Government to support and develop the food production system in Ireland which is both emission efficient and sustainable. 8 Department of Agriculture, Food and the Marine & McKinsey Consultants 8

9 Policy measures that require consideration include: A re-negotiation of emission reduction targets at EU level. A rejection of a step-up in emission reductions to 30%, in the absence of strong international commitment to match this position. Continued investment in research and training in emission efficient farming and food processing. The inclusion of carbon sinks from grassland and forestry in the agriculture sector. The development of a vibrant agri-renewable sector. 2.6 Irish Energy Policy Ireland s renewable energy strategy is an essential response tool to the climate challenge. However, to-date, the policy environment remains uncertain with lack of clarity regarding the commencement of renewable energy feed-in tariffs (REFIT) and excessive planning, grid connection and start up costs. In order to maximise the agriculture sector s contribution to Ireland s renewable energy targets, the Government must introduce a strong policy framework, underpinned by incentives that are sufficient to attract the participation of farmers and rural communities. IFA has developed a detailed renewable policy Ireland s Land-Based Renewables Strategy. An energy policy for jobs, growth and economic recovery. The following summarises IFA s key policy recommendations: Green Energy Unit: The Government must commit to the formation of a dedicated Green Energy Unit to co-ordinate the activities of the four Government Departments, the five state agencies and all stakeholders that have overall responsibility for the delivery of Ireland s Renewable Energy Directive targets. This must be established from existing resources and expertise. National Bioenergy Roadmap: The publication of a coherent bioenergy roadmap, including longterm Government commitments, is necessary to provide a clear pathway for the development of the indigenous bioenergy industry. Farmers need certainty in Government policy to undertake costly investments and diversify into bioenergy production at the scale required to achieve the 2020 targets. Renewable Energy Feed in Tariffs (REFIT): Realistic REFIT tariffs, guaranteed for 20 years, are required to stimulate investment in the sector as follows: cents per kwh for biomass combined heat & power, anaerobic digestion and microenergy cents per kwh for co-firing in peat power plants with wood, miscanthus and other biomass products. The tariff must be structured as an energy-only payment to allow for an acceptable return on investment for farmers. Three Point Plan for Micro-Energy Generation from Wind and Solar Sources: 1. The definition of micro-energy needs to be increased to 50kW for single phase and three-phase distribution to achieve viable scale at individual enterprise level. 2. The REFIT tariff must be brought into line with other European countries. 3. A stimulus package must be introduced, which includes capital allowance tax reliefs. 9

10 Biomass Public Procurement Policy: To rapidly upscale the biomass market, state agencies and public bodies, such as Government offices and hospitals, must set an obligatory rate of renewable usage in all publicly-owned buildings. Renewable Heat Incentive Scheme: The introduction of a new support scheme, similar to the Renewable Heat Incentive scheme operating in the UK. This will provide long-term support to the domestic, commercial and industrial sector to encourage growth in the renewable heat sector. Integrate Biomass Mobilisation Programme: To create confidence in the bioenergy supply chain and develop essential farm-based infrastructure, such as specialised machinery, storage and drying units, grant aid is essential to support the investment required. Minimum Price for Indigenous Biofuel Certificates: To restore confidence in the indigenous biofuels sector, the Government must provide a guaranteed minimum price of 41 cents per litre for existing indigenous biofuel certificates in the short term until the biofuels market stabilises. 2.7 Developing Sustainable Communities Agriculture and the food industry is the leading indigenous sector of the Irish economy. More than any other industry, the benefits of agricultural growth, both economic and social, are widely dispersed throughout the country and are of particular importance to the rural economy. Farmers and farm families spend almost 8 billion per year in the Irish economy, both on farm inputs and services, and on household expenditure. The majority of this money is spent locally, supporting jobs and enterprise in every town and parish across Ireland. As part of a programme for economic recovery, the Government must support primary production, improve competitiveness and undertake meaningful regional development that has a necessary and positive impact in the wider rural economy. IFA in its rural affairs policy document, The Irish Countryside A Place for living, working and enjoyment identifies the many issues of concern to farmers and others living in the countryside, including access to infrastructure, access to and cost of services such as health and education, rural security, rural littering and the cost of doing business. The Association makes a number of recommendations, including: The establishment of a rural forum to engage stakeholders and develop a holistic approach to sustainable rural communities. Develop a national strategy for repair and maintenance of rural roads. Supporting rural enterprises that employ less than 10 people, by developing a sustaining job scheme whereby a payment of 5,000 is made if a new job remains in place two years after commencing. The launch of a National Rural Spring Clean Week. The extension of the Walks Scheme. 10

11 2.8 Regulation The natural environment is highly valued by farmers as a place to live and work. It is vital that this fact is recognised when implementing legislation. The end result must be enhanced environmental standards and more efficient agriculture. Excessive red tape and form filling can increase the burden on farmers to a point where farming becomes uncompetitive and unsustainable. Rural Ireland needs a vibrant farming community to survive and prosper into the future. Current high Irish environmental standards must be used as a way of promoting Irish food abroad as sustainably produced and carbon efficient. 11

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