Challenging grain prices and some adverse weather conditions have resulted in a number of difficult years for the tillage sector, as this update from the Department of Agriculture, Food and the Marine explains.
Because Ireland accounts for only around 1 per cent of EU production, grain prices here are very much affected by European and world market price shifts and tend to experience volatility. The current situation globally for the cereal sector is that it has experienced another consecutive year of high grain supplies which have again outstripped demand. These years of oversupply continue to exert a downward pressure on the market and this, of course, has had a negative effect on price to the grower here. Partly as a consequence, the annual cereal area has reduced in recent years. For example, in 2017 the national cereals area reduced by about 10,000ha to 270,000ha.
Tillage is a key source of seed production, grain for the milling, malting and food industries and primary feeding stuffs for the livestock sector. As a consequence, the tillage sector is a significant stakeholder in our agri-food industry from a supply/food safety and sustainability viewpoint. The Department of Agriculture, Food and the Marine (DAFM) is very much committed to this very important sector, which plays a key role in the development of the wider agrifood industry. The DAFM directly supports improving productivity in the tillage sector through the crop variety evaluation programme and the operation of the official seed certification scheme. The official evaluation of varieties for value for cultivation and use is a key part of the EU seed-marketing legislation, and the production of recommended lists gives growers the information tools necessary to make informed variety-selection decisions. The DAFM also contributes substantial funding to Teagasc annually to carry out research to produce blueprints to aid growers in the efficient and sustainable production of crops, and remains committed to assisting all involved in the sector to optimise efficiency and sustainability.
The need to maintain a viable and profitable tillage sector is acknowledged in both Food Wise 2025 and, indeed, in the report, Future of the Tillage Sector in Ireland, published in November 2017 by the Joint Committee on Agriculture, Food and the Marine. Many of the recommendations it makes reflect the priority actions already highlighted in Food Wise 2025. In 2017, the €150m Agriculture Cashflow Support Loan Scheme was introduced and it was extended to cover the tillage and horticulture sectors. There was a very positive reaction by farmers, including tillage farmers, to the scheme, which has proved that significant demand exists for low-cost flexible finance. The Agriculture Cashflow Support Loan Scheme has provided a template for access to finance schemes, including the recently announced Brexit Loan Scheme for SMEs. Consideration is also being given to the development of a potential Brexit response loan scheme for farmers, fishermen and for longer-term capital financing for food businesses; for which the DAFM has secured €25m of funding in 2018. As a further support to tillage farmers, the Tillage Capital Investment Scheme under the Targeted Agricultural Modernisation Scheme (TAMS) II opened for online applications on March 8, 2017. The specific areas of investment include minimum disturbance tillage equipment, sprayers, rain water harvesting, grain storage and grain dryers. There has been a significant level of interest in investments by the tillage sector, with a total number of 775 applications received so far and 637 approvals. Over €1.38m has now issued in respect of 120 payment claims. Payments will continue on an ongoing basis. This is the latest of the TAMS schemes to be launched under the Rural Development Programme 2014-2020. The scheme is co-funded by the European Agricultural Fund for Rural Development (EAFRD). These statistics do not include young tillage farmers who can apply for a higher rate of funding under the Young Farmer schemes.
Food Wise 2025
Food Wise 2025 is an industry blueprint for the sustainable development of the whole agri-food industry. It is the fourth rolling 10-year report of its kind and gives a clear direction for the future of the whole of the agri-food sector. Significant progress has been made in recent years and it is imperative that this progress is built upon further. The DAFM is actively monitoring actions in relation to all sectors, including the tillage sector.
While not the answer to all of the challenges facing the sector, the development of niche and specialist markets to improve our competitiveness and sustainability credentials are areas that have something to offer. Examples of initiatives to improve niche markets include the recent Malting Barley Seminar in early February to promote the use of heritage Irish-bred barley varieties as a unique selling point for individual companies in the ever-expanding craft brewery and distillery industries.
The demand for Irish malting barley is growing in line with the sustained growth in demand for Irish whiskey. Recent estimates suggest 180,000 tonnes (t), or 12 per cent, of Irish barley production goes for malting, with an additional 60,000t, or 4 per cent, of the barley crop going as unmalted barley for use in the brewing and distilling sector. The challenge for the industry as a whole is to make the growing and processing of these premium crops sustainable for both the farmer and the processor. This is always difficult when the final product is competing with other products on competitive international markets. However, the marketing opportunity offered by maximising the amount of Irish grain in what are quintessentially Irish brands must be developed to the benefit of all involved. The Maize Guide, which was launched in 2017, is an example of an industry-led initiative and is to be commended. This shows that many answers to the challenges facing the tillage sector can be overcome by those working within the sector. The inclusion of a template contract between a maize grower and a livestock farmer is something that is long overdue and brings a more integrated and formal approach that will benefit both the tillage and livestock sectors.
Protein aid scheme
The Department can confirm that the Protein Aid Scheme will continue to operate in 2018 but the details of the level of aid had not been finalised at the time of going to press. Details will be made available shortly.