Hard-won derogation extension

Costly, tedious, and necessary. That sums up the conditionality around Ireland’s three-year extension to our nitrates derogation. 

Three years, while welcome, is problematic from a few perspectives. As it happens, it neatly coincides with the gestation/maturity of a calf. If inseminated in spring 2026, the cow will deliver a calf in spring 2027. That calf will mature to a two-year old heifer, calving down in spring 2029. That neatly mirrors the dateline for the next review of our nitrates derogation. 

Will that newly calved heifer be required in the herd? That could very much depend on whether there is a further renewal of the derogation from the end of 2028. Of course, in the normal breeding-planning process, up to 20 per cent of the herd may be replaced in any one year. That assumes a stable herd, without any increase or decrease in numbers. If the derogation is reduced or lost entirely in another EU Commission decision after the current extension concludes in late 2028, then a reduction in livestock numbers would be required, assuming no additional land is bought or leased. That heifer, three years in planning, would be surplus to what a producer could carry on his/her farm. The considerable cost of carrying a heifer from birth to calving would be wasted, with only some hope of retrieving a portion of the rearing costs from sale or slaughter. 

Stranded assets risk

In addition, many farmers are borrowing to fund additional slurry storage space as required under legislation. Normally, those loans are long-term, of five- or seven-year duration. If no further derogation, or a reduced one, is decided on at the end of 2028, the farmer must continue to carry the loan cost for a further two to four years, with fewer cows to fund repayments. The additional slurry storage and other infrastructure investments would be ‘stranded assets’, surplus to requirements, though still costing the farm dearly. From these examples, it is clear that while the latest derogation extension provides limited certainty for the next three years, it does not provide the kind of long-term assurance required for long term planning, most notably in relation to a breeding programme or financial and infrastructure planning. 

A welcome reprieve

We can’t look a gift horse in the mouth and must welcome the limited extension on offer. Meanwhile the long-term future of the derogation is not in our own hands only. While some of the challenges with water quality improvements are within farmer competence, there is an additional water quality burden, which we cannot influence. Other contributors to water quality status include deficient waste-water treatment facilities around the country as well as the thousands of sub-optimal septic tanks in our towns and countryside.

Doubling down

The challenge for farmers is to double down on their efforts to ensure that agriculture-related water quality challenges are addressed, using the current momentum as a starting point. We know that the sub-catchment areas will be monitored over the next three years to ensure compliance from farmers. That undertaking will be costly and lengthy. It is unlikely to be concluded in three years, given the scale of the undertaking and the deficit in qualified personnel to carry out these studies. Lower fertiliser limitations, extended buffer zones and compliance under the Habitats Directive will all add complexity and cost to an already burdensome regime. This is the price we must pay to farm competitively and profitably under our grass-fed production model.