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Matt O'Keeffe

Choices widen for farmers

While most Irish farmers are, traditionally, food producers, there have always been individuals and groups who engaged in alternative land uses. Forestry is one of the more obvious. Very few who planted trees at scale on their farms have regretted the decision. Forestry has delivered returns over extended periods far in excess of what much of this marginal land could provide from more traditional enterprises. Currently, there are several novel land-use options that would seem to offer viable long-term returns. For those in the right locations, wind turbines on their farms are financially rewarding. Likewise, land-based solar panels can be a viable option. Collaboration between several neighbouring farmers, as we have seen examples of recently, can deliver the necessary scale where individual farms cannot. For those farmers who wish to continue in food-related enterprises but want to take a path that differentiates their produce, organic production offers that choice.
As a niche food-production system, organics should deliver premium pricing. That is not always the case, though given the funding available to support organic farming, the presence or absence of premium returns is almost incidental. Some specialised enterprises, including organic-milk production, would seem to offer premium pricing security. As organic production becomes more mainstream across the EU, it is probable that there will be an increasing erosion of premium pricing with more reliance on external financial supports.
Others ploughing their personal furrows include free-range egg and pork producers, venison producers – though the pioneering breeders were the big winners there – as well as those who add value to their produce through processing their raw food materials. 

"The mass construction of solar panels on farm buildings will transform the farmyard landscape in the coming years"

What does the future hold? Carbon credits are in their infancy in terms of land being used as a storage facility, with landowners paid for the storage capacity of soils, trees and hedgerows. Farming exclusively for biodiversity may well become a financially positive activity. Combinations of traditional food production integrated with more novel activities also offers potential income streams. Sheep or goat farming in tandem with solar energy production is already a viable option. The mass construction of solar panels on farm buildings will transform the farmyard landscape in the coming years as the main barriers to such developments are being dismantled. Biofuel production, in its broadest sense, is set to transform large tracts of Irish land from food to fuel and energy production. With the construction of hundreds of bio-digester units across the country, the demand for feedstocks, grass, maize, fodder beet and farmyard manures, for these gas production plants will inevitably result in less land being used for food production. There is an acknowledged requirement for thousands of hectares of grass to be dedicated to supplying the raw material required to fuel bio-digesters. If the figures add up, then farmers will transfer their land use to enterprises that offer guaranteed returns in excess of what are available from current activities. Even with significant financial supports, much of our drystock production is marginally profitable, at best. The current higher prices for cattle disguise the long-term low average returns from cattle production. That fact is not set to change in the foreseeable future. 

Whatever options farmers take, there are lessons to be learned from the past. Inflation has returned. All new payments for environmental and other services or goods supplied need an inflation-linked pricing mechanism. The Common Agricultural Policy (CAP) model shows how the absence of an inflation index has eroded its value to farmers over time.