How will Irish farmers be supported to deliver necessary climate action?

IPCC Report a major wake-up call

The UN International Panel on Climate Change (IPCC) has this week published the first part of their sixth assessment report, the first since 2013, and it does not make for pleasant reading. While it contains little that is new, it confirms that climate change is widespread and happening increasingly fast. The IPCC are now “unequivocal that human influence has warmed the atmosphere, ocean and land“. Their report also suggests that recent weather extremes which have led to widespread wildfires, droughts and floods, are also linked to climate change. In five scenarios, the IPCC suggests that massive mitigation action to reduce emission to net zero globally by 2050 and rapid significant action in the next decade will be required to ensure global warming is kept to under 1.5 degrees by 2050, as agreed in the Paris Agreement of 2015. Anything less will fall short. It also states that some of the changes, such as the melting of ice caps and rising levels of oceans may be slowed or stopped with significant mitigation action but are irreversible. In this context, the urgency and sheer magnitude of the action required by all sectors all over the world to mitigate the warming of the atmosphere by reducing GHG emissions cannot be overstated.

Top global source of GHG emissions is energy as consumed by the various sectors (73.2%), as shown in the graph – essentially the burning of fossil fuel. Agriculture, forestry, and land use account for 18.4%, and livestock and manure specifically 5.8%. However, in Ireland, which has little or no heavy industry, the agriculture sector accounts for over 1/3 of national emissions. I fully expect the publication of the IPCC report, coinciding with the publication of Food Vision 2030 earlier this month, the finalisation of the Climate Action Bill and the consultation on the CAP National Strategic Plan, to be the occasion in the media and in the public debate of increased pressure for climate mitigation action on the Irish agricultural sector. I simply hope the debate is a constructive one: the problem is too urgent for an all too predictable row.

Farmers are already working to do their bit, and unlike some of the other sectors, agriculture, thanks to Teagasc and others, actually has well developed strategies and action plans. However, farmers’ ability to deliver optimally and rapidly the necessary climate mitigation and environmental improvement measures will critically depend on being adequately supported not just technically, but also financially, through CAP and other means. So, what do our national policies plan for in this area?

Farmers cannot carry the full cost of necessary climate action in agriculture

Food Vision 2030, and the first indications on the CAP National Strategic Plan, both recognise the need to support farmers in reducing their impact on the environment, including reducing GHG emissions.

Food Vision 2030 warns: “In addition, detailed impact assessments will need to take place. Consideration will be needed as to where the burden of these costs will lie, with the primary producer, food distributors or processors, retail, food service, consumers or public funds. It is clear that primary producers alone cannot be expected to bear this cost.”

However, the CAP National Strategic Plan is constrained by the EU’s failure to increase the CAP budget to fund additional costly or productivity reducing climate action – so that the new Pillar 1 eco-schemes will be funded by recycling and repurposing a portion of existing payments, which already form part of farmers’ incomes. The DAFM have recently published a modelling exercise which through a few case studies indicates to farmers how eco-schemes, young farmer provisions, front loaded redistribution of payments, capping and convergence will impact their CAP payments from 2023. While the details which will really determine individual impacts will be decided after the current consultation process, the modelling exercise shows that farmers will likely see their entitlements and overall payments rise or fall, in some cases dramatically.

Pillar 2 agro-environmental schemes – the successors to GLAS or REPS – will depend on co-financing by the Irish Exchequer to deliver optimally for farmers and for the environment. The focus in devising the detailed Pillar 1 and Pillar 2 schemes should be on ensuring that the cost of engaging with new farming practices and/or technology to improve climate and environmental performances is properly offset by a combination of improved efficiencies and scheme payments, including through national co-financing. Farmers whose payments are reduced to fund the schemes and who participate in them should not end up getting back less than they lost to carry out costly changes.

The cost of farming will also increase further for many commercial farmers, and the productivity possibly decrease, with greater requirements on slurry storage and tighter chemical nitrogen allowances under the reviewed nitrates directive. The new Pillar 2 proposed environmental scheme for suckler farmers is also proposed to put a limit on the number of suckler cows, capping productivity.

Farmers will need a great deal of aids and supports if they are to deliver more for climate and the environment with lower CAP payments and potentially reduced incomes from commercial farming.

Remuneration for carbon farming – yes, but how, how soon, and how much?

Carbon farming as a means of remunerating carbon sequestration by farmers is clearly identified in the EU Green Deal’s Farm to Fork Strategy. Food Vision 2030 mentions it, referring to the Ag-Climatise roadmap and stating that “carbon-farming offers a potentially new source of income for farmers, but it is still in the early stages of development“. It also refers to the setting up of a carbon trading schemes, for which it says: “In addition to public funding, multiple sources of finance will be required, including from the private sector“. This is all pretty vague: carbon farming or trading between farms will require not only a trading system to be set up and funded, but measurement and benchmarking methods to be developed and agreed to underpin it. Research on those has started through the excellent Teagasc SignPost programme and the Devenish project in Grange among others, but we are a long way from an agreed, scalable measuring system actually available to farmers. Also, farmers may have expectations that their existing or past actions in increasing the carbon sequestration ability of their farms – e.g., by planting hedgerows and establishing other carbon capturing features – will also be credited, and this is far from certain as far as I can see. The agriculture sector needs greater clarity on this front rapidly.

Remuneration for on-farm renewable energy generation?

Food Vision 2030 “proposes the scale-up of renewable energy (RE) sources, especially anaerobic digestion, solar PV, supply of biomass materials and energy efficiency” and adds that “The roll-out in 2021 of an enabling framework for micro-generation which tackles existing barriers and establishes suitable supports, as foreseen in the Climate Action Plan 2019, will be crucial to the delivery of this action.”

It is vital that national policies complement each-other. Enabling farmers to diversify their sources of income through energy generation is rightly seen as a vital element of improving the sustainability of food systems, including farmers’ livelihoods, in Food Vision 2030. The Climate Action Plan 2021 must set up the required framework, including the ability to sell surplus energy back to the grid, to deliver on farm income diversification while improving Ireland’s self-sufficiency in renewable energy.

Retailers and food processors get a substantial marketing benefit from being able to source demonstrably sustainably produced food. This allows them to up their position in the value chain, and to market to a more discriminating and climate conscious consumer, at a higher premium. The primary producer, who takes the largest part of the risk and cost of sustainable production, must receive a fair share. This is duly recognised in Food Vision 2030 which calls for the improvement of creation and equitable distribution of value through the food chain. Enhancing price transparency and the protection of primary producers’ interests through the implementation of the Unfair Trading Practices Directive, the appointment of a Food Ombudsman, and the facilitation of Producer Organisations are all welcome developments.

However, Food Vision 2030 does not appear to create any mandate on the food chain and the retail trade to contribute in concrete, demonstrable ways to the economic sustainability of primary food producers. This is in stark contrast with, for example, the French EGalim food chain legislation, which among other things outlaws certain types and levels of price-based retail promotions, strengthens the price negotiation powers of farmers through producer organisations and creates obligations on retailers and food processors to take account of production costs when remunerating farmers

A full economic impact assessment is essential

Irish agriculture has a lot to do to address environmental and climate challenges: farmers understand this and are ready to play their part. However, supports are now so entirely focused on the environment that we run the risk of damaging the economic viability of our agricultural sector, and in doing so actually reducing its capacity to deliver in that space.

Food Vision 2030 expects higher value food production to deliver an increase in Irish food exports by one third to €21bn. This can only happen with a base of productive, economically sustainable primary producers. This will require that all supports, from CAP or other sources, adequately offset the cost of environmental action required of them. This calls for a full economic impact assessment of the new measures required of farmers and their effect on their productivity and incomes, but also on the sizeable spin off Irish agriculture delivers in the rural economy. Food Vision 2030 calls for this assessment: it needs to be prioritised.

Meanwhile, the DAFM are running a detailed consultation on the CAP Strategic Plan interventions which all farmers should take a close interest in, maybe even respond to. The deadline is 27th August, and you can find details of the consultation here.

Newsletter Archives