Report
on
Crisis in Farming - Summer 1985
A. INTRODUCTION
1.The Joint Committee at its meeting on 3rd September, 1985 debated and passed the following motion proposed by Deputy Oliver J. Flanagan:
“That the Oireachtas Joint Committee on the Secondary Legislation of the European Communities recognises the special position of all landowners in the Shannon Valley and calls on the European Community to provide financial assistance from the Community Disaster Fund as a matter of extreme urgency; urges that the Shannon Valley in its entirety be regarded as completely disadvantaged; requests the Government to take steps to ensure that no farmer will have to dispose of his livestock under value; requests that the grave emergency in the area be fully recognised; requests that farmers throughout the country who are in difficulties with regard to Winter fodder be given an immediate subsidy to help them overcome their difficulties;
and requests that the price being paid for the barley crop be subsidised to bring it up to a realistic level and to offset the increased costs associated with reducing its moisture content”.
The Joint Committee also decided that its Sub-Committee on Agriculture and Fisheries Matters would prepare a draft Report on the Community measures that could be invoked to alleviate the serious position of Irish farmers brought about by the bad weather and storms over the Summer months. To this end it was decided that a delegation of the Sub-Committee would visit the European Commission for discussions in connection with the preparation of the draft Report. Deputy Joe Walsh, Chairman of the Sub-Committee and Deputy Oliver J. Flanagan were nominated to undertake the visit which took place on 9 September, 1985.
The delegation was accompanied by the Clerk to the Joint Committee, Mr. Seamus Phelan.
Orders of Reference of the Joint Committee
2.The Joint Committee when it came to consider this subject was conscious of the circumscribing limitations of its Orders of Reference. While some of the areas covered can justifiably be held to be on the periphery of the Joint Committee’s mandate, nevertheless the reliance being placed on Community measures, particularly the Joint Committee hopes, Directive 75/268/EEC (as amended) - on mountain and hill farming and farming in less favoured areas - to relieve the distress among the farming community, must exercise a centripetal effect and place the subject well within the ambit of the Orders of Reference.
This contention is fortified by the fact that the European Parliament considered motions on the Irish farming crisis from four political groups, and adopted a compromise Resolution which is reproduced in Appendix 2. A salutary feature of this Resolution is that it was subscribed to by all Irish MEPs, both North and South.
Acknowledgements
3.This Report was prepared for the Joint Committee by its sub-Committee on Agriculture and Fisheries Matters under the Chairmanship of Deputy Joe Walsh. The Joint Committee is indebted to Deputy Walsh and his colleagues for their work.
The Joint Committee also wishes to express its thanks to the farming organisations who assisted it in the preparation of this Report, namely:
Irish Farmers’ Association (IFA)
Irish Cooperative Organisation Society (ICOS)
Irish Creamery Milk Suppliers’ Association (ICMSA)
An Chomhairle Oiliuna Talmhaiochta (ACOT)
These bodies also made written submissions to the Joint Committee which were very helpful.
In addition the Joint Committee had the benefit of oral and written submissions from the Department of Agriculture and wishes to record its appreciation of the Department’s cooperation.
B. Farming Losses
Introduction
4.A very serious situation has arisen in the farming community as a result of the prolonged bad weather which has led to severe and widespread losses and damage being sustained.
According to the Meteorological Service both Summer rainfall and the number of wet days (from 1 June to end of August) have been well above average in all areas of the country. Summer sunshine has generally been about 85% of average but only 70-75% in western and southern areas. A weather summary for the Summer months prepared by the Meteorological Service is set out in Appendix 1 to this Report.
5.In addition to fodder and grain losses due to the heavy rainfall and the lower than average amount of sunshine over the Summer period losses were also caused by lightning, hail and high humidity. There have been instances of severe losses of livestock due to lightning while unusually heavy hail on 27 July caused damage to grain and horticultural crops in a narrow corridor extending from County Kilkenny to County Louth. The high humidity caused some serious blight losses in potato crops mainly in North Leinster, North County Dublin in particular.
6.However, the loss of greatest concern is that of fodder for livestock for the coming Winter months due to the prolonged heavy rainfall. While hay constitutes a decreasing proportion of our Winter fodder supplies derived from grass (currently about 40% as against 60%
for silage) this year’s widespread loss of hay, and to a much lesser extent of silage quality, which is not so dependent on good weather for successful harvesting, poses a very real threat of a severe loss of Winter fodder.
Almost all of the larger and more progressive farmers have changed over in recent times to silage making but large numbers of farmers, particularly the smaller ones in the western counties, still adhere to hay-making.
In the 12 western counties only about 20% of the hay crop is secured and much of this is of poor quality. The north western counties are most seriously affected. In counties Mayo, Leitrim and Donegal about 70% of the forage is hay and weather conditions here have been particularly bad. In the absence of an improvement in weather conditions there will be need to substitute barley straw and grain for hay or silage.
For many of the farmers affected the loss of hay this year is liable to be of crisis proportions. The lack of adequate fodder will result in their having to sell off stock at considerably depressed prices with consequent loss to the farmers concerned.
7.In an effort to relieve this serious situation the Minister for Agriculture announced on 8 August, 1985 a nitrogen fertiliser subsidy scheme and a subsidy for first time silage making at a total estimated cost this year not exceeding £2.5 million which would be met from savings in the Agriculture Vote. Given better weather it was envisaged that the fertiliser would induce growth of grass sufficient to enable the farmers concerned to take a late cut of silage. The weather has militated against the successful operation of the schemes.
8.In the case of cereal harvest, problems have arisen due to difficult ground conditions which are hindering the progress of the harvest and damage to grain from sprouting due to humid conditions in wheat is widespread. However, an improvement in weather conditions over the next few weeks would at least enable crops to be harvested.
Yields, however, will be below normal and grain quality will generally be poor especially in the case of wheat.
Fodder Position and Harvest 1985
9.Because of the greater dependence in the western counties on hay for Winter feeding of cattle, the poor weather conditions throughout the Summer affected supplies of Winter fodder more seriously there than elsewhere.
The north western counties are the most seriously affected because of their higher dependence on hay and the poorer weather conditions in these counties. As already stated this is particularly the case in counties Mayo, Leitrim and Donegal where about 70% of the fodder consists of hay.
The western counties have the highest average rainfall in the Community.
10.In addition to the western counties small farmers dependent on hay in the remainder of the country are experiencing an acute shortage of fodder. Supplies of silage have been procured on the larger farms in parts of the west and more particularly in other parts of the country but these will not be adequate for normal Winter feeding if farmers do not succeed in making late silage also. On the whole farmers outside of the western counties are in a less serious position and are located closer to supplies of straw when it becomes available. The position in regard to the spring barley crop is still generally satisfactory and this provides some hope in regard to supplies of straw.
Because of the large area of hay still uncut particularly in north-western counties a special effort will be necessary to secure this source of fodder should weather conditions improve.
The serious fodder situation has resulted in increased sales of cattle particularly in the disadvantaged areas.
11.Because of the fluctuating nature of the problem it is not easy to estimate the actual loss suffered or likely to be suffered by the farming community. However, the Irish Farmers’ Association in their submission to the Joint Committee provided an estimate based on official sources and this is reproduced in Appendix 3.
Consultations with Farming Organisations
12.Farming representatives were unanimous in identifying the major problem facing farmers this Winter as a shortage of fodder. This problem is particularly aggravated in the West of Ireland through over-reliance on hay for Winter fodder. Farming representatives drew specific attention to the increase in the numbers of young cattle being offered for sale in livestock marts and the consequences for the economy in general of running down breeding herds. ACOT felt that this was a direct challenge to its efforts to build up national herds in the five year plan. ICOS gave details of the organisation’s efforts to move fodder from the less badly affected areas on the east coast to the west and advocated a transport subsidy. The organisation also advocated the provision of suitable Winter housing accommodation for cattle in the west where cattle were frequently left outdoors with consequential damage to grazing areas.
The organisation stressed that cost-effective cheap housing is now available and attempts should be made to encourage farmers to invest in it. The ICMSA stressed the long term/adverse effects of de-stocking of farms in anticipation of a shortage of fodder this Winter.
The ACOT representative, supported by the other farming representatives, stressed the need for a switch to silage where possible and urged the re-introduction of the successful group fodder scheme.
13.Among the specific Community measures advocated by the farming organisations are:
1.the bringing forward of intervention arrangements for carcase beef
2.the payment of the maximum rates of headage grants to farmers in Disadvantaged Areas and the bringing forward of payments for the newly designated areas
3.Euro-loans at low interest rates for cereal farmers’ particular to help them to re-seed (with the Government underwriting exchange rate fluctuations and the banks waiving handling charges)
4.in the long term, effective arterial drainage schemes
5.Community intervention grain at low cost
6.aid for the drying of grain.
14.The representative of the Department of Agriculture gave details of the schemes introduced by the Government to deal with the farming crisis. These included the fertiliser
subsidy and grants for first time silage already referred to. He estimated that up to 15-20,000 farmers may avail of the fertiliser subsidy and about 10,000 might benefit from the silage grants.
The Department’s representative also gave details of the rescue measures for farmers in the Shannon Valley.
These are cash payments based on livestock units with a maximum payment of £500 in any one case. The offer of Community grain being considered by the Government would not be confined to the Disadvantaged Areas.
C. VIEWS OF THE JOINT COMMITTEE
15.It has been well established that the situation in Irish farming as a result of the bad weather has reached disaster proportions. The delegation from the Joint Committee which visited Brussels came away with the impression that this view was also shared at Community level. The case was copperfastened by the visit of the Commission’s Director-General for Agriculture, Mr. Guy Legras, when he visited Ireland on the 11th September to make an on-the-spot assessment for Commissioner Andriessen. Delegates who visited Brussels came quickly to the conclusion that the Community Disaster Fund was not the appropriate vehicle to rescue Irish farmers, being limited in resources to approximately IR£2M.
Delegates learned from Commission officials that the idea behind the Disaster Fund was mainly compensation for personal injuries arising from natural disasters. While it could be argued cogently that the Irish farming situation, particularly in the Shannon Valley, could justifiably be classified under this heading the size of the Fund rules it out as an effective rescue measure. In any event the Joint Committee does not hold out much hope for aid from this source in the light of replies given by the Commission to questions from members of the European Parliament in regard to farming losses in other Member States.
Two such questions and replies are reproduced in Appendix 4. However the Joint Committee feels that the limitations of the Disaster Fund should not prevent the creation of an ad hoc disaster fund for Irish farming.
16.The Joint Committee sees the main problem of farmers as a need for an immediate injection of cash. This could be effected in the west, where farmers appear to have taken the brunt of the problem, by increasing the headage payments to the maximum level allowable under the EEC Directive governing the Disadvantaged Areas
(75/268/EEC - as amended). At present headage grants up to £75 per livestock unit are allowable whereas the cut-off point in Ireland ranges from £32 down to £28.
This arrangement would, it is estimated, cost about £34 million, half of which would be borne by FEOGA. This solution might not commend itself to the hard pressed Exchequer, but it would have the advantage of a generous capital injection into the agri-economy which would have down stream benefits. While farming is seen as the front line victim of the bad weather there have been consequential crises in manufacturing and services associated with agriculture. This area has suffered from job lay-offs and short-time working and could benefit through the effect of sound underpinning of
primary agricultural activity. Accordingly, the Joint Committee urges that an increase in headage payments, as advocated by farming representatives, be given the consideration it deserves.
17.Intervention is another area that could be invoked to aid the beef sector. The Joint Committee understands that in the past intervention rules have been adopted on a regional basis in the Community to deal with specific problems and urges that a similar derogation be sought for this country. This could halt the slide in beef prices and help to stabilise farm incomes.
18.The Joint Committee acknowledges the advantage of intervention grain from the Community, both as a relief measure to Irish farming and as a solution to mounting surpluses in the Community. This scheme could be very effective if low interest Euro-loans were made available to purchase it. Underwriting of exchange risks and the waiving of handling charges by the banks would sharpen the impact of the scheme. The Joint Committee welcomes the intention of the Government not to limit the application of Community grain to any one area but hopes that this scheme will not be its only response to the farmers problem.
The release of feeding grain on to the Irish market will have to be carefully controlled in order not to depress the price of domestic supplies.
19.At Community level the gamut of FEOGA schemes should be examined with a view to seeking a balanced solution to the problem in Irish farming, which has fallen victim to unprecedented adverse weather conditions.
The Joint Committee is convinced that no single measure will provide an adequate remedy but that the problem must be attacked on several fronts. The Irish economy as an integral part of the Community economy is still heavily dependent on agriculture, accounting for up to 40% of our exports. Confidence in Irish agriculture has been badly shaken and the Community should do all it can to restore it.
D. CONCLUSION
20.One of the greatest problems with aid in a disaster situation such as has befallen Irish agriculture is to ensure that aid and rescue measures are accurately targetted. Despite the magnitude of problems facing farmers this Summer a good number have managed to save their crops and provide fodder for their cattle over the Winter. These farmers, the Joint Committee believes, could not justify a claim on the very limited resources available and likely to become available from domestic and Community measures. Many farmers outside the Disadvantaged Areas have also suffered, perhaps not to the same extent, and they will need assistance.
Farmers in Disadvantaged Areas could be provided for by increased headage payments but other categories would need to be taken care of by a specially designated disaster fund.
21.The Joint Committee feels that there are lessons to be learned from the experience of this Summer. Over-reliance on hay, instead of a switch to silage, and out-wintering of cattle have caused serious problems particularly in the West. While Irish farmers could not anticipate the unusual severity of the bad weather, nevertheless it must be acknowledged that many farmers were ill equipped to deal with it. Group and cooperative fodder schemes must now be a high priority, especially in the West.
22.Drainage schemes, with the aid of Community funds must also be considered in the long term. Flooding will leave many Irish farms in a very debilitated condition for a long time. Drainage schemes must be extended and pursued with renewed vigour in order to prevent or lessen the impact of disasters such as that which befell the Shannon Valley, and to increase the productivity of the adjacent lands.
23.The Joint Committee has noted the galvanising effect that the farming crisis has had on farming organisations and is reassured by their unity of approach to the problem.
It agrees that measures to deal with the problem should be co-ordinated through ACOT.
24.The Joint Committee, while not wishing to stray outside its Orders of Reference, thinks it would not be injudicious to refer summarily to non-Community measures which were advocated by farming bodies in their submissions.
These include social welfare payments, use of un-occupied IDA factory space for fodder storage and forbearance by money lending institutions in redeeming outstanding loans.
25.The Joint Committee does not underestimate the logistical problems associated with the disbursement of aid to farmers. It urges co-operation, which it is confident will be forthcoming from farming bodies, to ensure the effective application of Community and domestic aid measures.
26.Finally in view of the urgency of the farming crisis the Joint Committee specifically requests that a debate on this Report take place in the Dail and Seanad as soon as possible.
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Michael Smith TD |
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Acting Chairman of the Joint Committee |
25 September, 1985.
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